Good news. Can you install solar panels on your home in Alabama?
Bad news. you can not save on utility bills.
That doesn't mean solar panels are useless. Solar panels can continue to provide you with backup power during power outages and help reduce fossil fuel emissions.
Alabama ranks 33rd nationally in installed solar capacity, according to the Solar Energy Industries Association, but homeowners' prospects for installing solar panels are clouded by net metering policies that limit their savings and prevent them from connecting to the grid to connect.
"Solar is a very viable and mature technology, and the number one thing holding back its growth and use in Alabama is our politics," said Daniel Tate, executive director of Clean Energy Advocacy Group Energy Alabama.
Depending on where you live, a solar system can come in handy. According to SaveOnEnergy, a CNET affiliate website that covers the energy usage industry, Alabama residents face the highest average electricity costs in the nation. The state has the fourth-highest average bill in the nation at $173 a month, the highest among southern states.
Whether a solar system is financially worthwhile depends largely on your intention to connect to the grid and energy provider. Here's what you need to know.
Cost of solar panels in Alabama
The cost of installing a solar system on your home depends on many factors, including the size and type of solar panels and whether you purchased a battery system. Without a more mature solar industry in Alabama, it is difficult to obtain state-level data on the cost of a typical Alabama system. But Tate said prices are in line with the national average, if not slightly cheaper.
Here are the national average prices for Alabama residents to give you an idea.
Average cost of solar panels by country
| Plant Size (kW) | price per watt | posted price |
|---|---|---|
| 8.6: | 3.67: | 31558 |
According to the Lawrence Berkeley National Laboratory Solar Tracking Report, the average cost per watt of a solar system nationwide is $3.67, and the average system cost is $31,558. Keep in mind that your potential savings may be limited by your utility company's net metering policy. Depending on your utility company, you may pay more to connect your system to the grid.
Advertiser disclosure. CNET corporate partner SaveOnEnergy can help you find the right energy for your home. The SaveOnEnergy Marketplace helps you find, compare, save and save on the right energy for your home—all for free. If you're interested in solar power, answer a few questions to get an accurate quote from our solar consultants.
Benefits and discounts for solar panels
Regardless of the size of the system you purchase, solar panels require a significant financial investment. Fortunately, you can save big thanks to a substantial federal tax credit.
A major incentive is the federal residential clean energy credit, which allows you to recoup 30% of the cost of a solar system when purchasing solar panels. Congress passed the Inflation Relief Act in 2022, increasing it by 26% and extending it through 2034 with no limits on the size of loans.
Remember, a federal tax credit is not like a discount code or instant deduction; you won't get a refund until you file your tax return the following year, and the amount you get back is limited to what you actually received. Come back. . the federal income tax you paid. You can apply by completing IRS Form 5695 (PDF) and following the Internal Revenue Service's instructions.
Compared to other solar-friendly states, Alabama has limited solar incentives for homeowners. Check with your installer if the software is available in your area.
Solar incentives in Alabama
| the program | Description: |
|---|---|
| property tax abatement | Your local government may provide property tax credits for renewable energy projects, so you won't have to pay higher property taxes after adding solar panels. A reduction must be made before the end of the project. |
| Rural Energy Program for America | Administered by the United States Department of Agriculture, this initiative provides guaranteed loan financing and grants to rural farmers and small businesses for renewable energy systems or energy efficiency improvements. |
How do I pay for solar panels in Alabama?
As with any major purchase , you should have a plan to cover the cost of the solar panels . Some methods require preparation or take longer to pay. Here are some options.
Money Nothing beats cash, but a $10,000 project takes a lot. If you see solar power in your future, not tomorrow, consider saving money now. Regular deposits in a high-yield savings account can add up quickly.
Solar loan. Many solar companies often offer debt financing. Check with different lenders, as your choice of third-party solar company provider may not offer the best terms or interest rates.
Home equity loan or HELOC. You can also consider a home equity loan or line of credit , which allows you to save on interest even though your home is at risk if you don't make payments.
Mortgage. Another way to get money for solar panels is to refinance your mortgage. You can use the equity in your home and make a one-time payment. Some products, such as Fannie Mae's HomeStyle Energy Mortgage, are specifically designed to finance energy efficiency projects.
Why is it hard to enroll in Alabama?
Through tariffs and net metering, the process by which you sell electricity to the grid, Alabama utility companies play an important role in determining whether installing solar makes sense for your home. "Unfortunately, it really defines what you can and can't do in a lot of situations," Tate said.
Most North Alabama homeowners get their electricity from utilities that buy electricity from the Tennessee Valley Authority. Tate said arranging communications and net metering is fairly easy in this area, where solar development is more common than in the rest of the state. TVA will get excess power, but not at high rates, meaning many systems are built around batteries that store energy for the owner's use, rather than selling excess power back to the grid.
In the rest of the state, people who want to connect a solar array to the grid can pay $5.41 per kilowatt per month through utility Alabama Power, depending on the size of the array. These fees essentially wipe out potential savings from switching to solar, and the policy is the subject of a federal lawsuit. A spokesman for Alabama Power declined to comment, citing the ongoing litigation.
"No one is doing solar in Birmingham who thinks it would be a smart financial move to bring home," Tate said.
In Birmingham, Montgomery and other areas served by Alabama Power, people have options, including custom-built systems that don't tie solar to the grid and avoid grid metering altogether. These include hybrid solar systems or even separate electric systems, one connected to the solar panel and the other connected to the grid. Others can go completely off the grid if they can generate enough electricity.
Other Alabama customers are served by local electric cooperatives that have different solar policies, Tait said. If you are covered for either service, contact your credit union to learn more about your options. Details can vary widely, and some smaller cooperatives may not have a specific policy on solar system integration.
Alabama Solar Panel Company
The Yellowhammer State has eight solar installers and developers, according to the Solar Energy Industries Association. While you have several options, here are a few that stand out, including some of the best solar panel companies in the country.
Eagle sun and light
Based in Birmingham, Eagle Solar & Light was founded in 2016. The company can install solar panels for residential and commercial systems and is a licensed contractor in Alabama, North Carolina, Georgia, Mississippi and South Carolina.
Eagle Solar & Light offers a free visit to review your property and determine the best option for you.
solar energy
Our top pick from national solar company SunPower has a peak efficiency of 22.8% and a warranty that guarantees at least 92% output after 25 years. It also has an A+ rating from the Better Business Bureau.
You can buy or rent panels from SunPower, which operates in all 50 states.
Southern solar systems
In Huntsville, North Alabama, Southern Solar Systems offers residential and commercial solar systems, as well as other energy-efficient products such as ground source heat pumps and solar water heaters.
Founded in 2007, Southern Solar Systems operates throughout the Southeast.
volcanic solar energy
Based in Birmingham, Vulcan Solar Power also offers free site surveys and consultations, as well as free system design and quotes. The company has installed commercial and residential solar systems in the Southeast.
Vulcan Solar Power also installs solar systems for farms or rural businesses, for which consumers can recover up to 25% of the cost through grants from the USDA.
Installation factors to consider
For a successful solar system, it's not enough to just buy modules and bolt them to the roof. Here are some things to think about before deciding:
- Your roof. whether solar power is right for you depends a lot on your roof: its size, shape, slope, and pitch. The Department of Energy says solar panels are most effective on roof pitches between 15 and 40 degrees and are best placed on southern-facing roofs in the northern hemisphere. Your roof may also need to be repaired or replaced before you are ready for panels.
- Your neighborhood. Make sure you don't have HOA restrictions or local ordinances that prevent you from having solar panels.
- Insurance: Add the panels to your home insurance after installation. You should check in advance that your policy will cover them.
- Your location. Solar panels work best in areas that receive a lot of sunlight during the day. If your property has a lot of shade, this may not be the best option for a solar system. Talk to reputable installers to make sure the project is worth it.
- If you rent check with your landlord or rental management company before installing solar on a rental property.
Frequently asked questions about solar energy in Alabama
Are solar panels legal in Alabama?
While Alabama isn't a pioneer in solar power, the state isn't preventing homeowners from making that choice on their own. The lack of incentives and limited availability in Alabama can make things a bit more complicated, but if the decision is right for you, it might still be worth it.
How to choose a solar installer?
As with any contractor, do your research before hiring someone to install solar panels. Find a reputable licensed, contractor and insured contractor and get multiple quotes. Don't be put off by the first offer at your door. "Don't let this stuff slide just because it's renewable," Tate said.
