Find out if solar panels are right for your home in Alabama.
Alabama is quickly catching up in the renewable energy game. With an average solar system cost of $10,290 after the 30% federal tax credit, and a payback period ranging from 5.9 to 7.2 years, going solar has never been more accessible.
Despite the state's lack of robust solar policies, the federal incentives and Alabama's abundant sunshine make solar more accessible and attractive to homeowners. In fact, the state has seen a significant growth in solar installations, now boasting 813 MW of installed solar capacity, powering over 91,000 homes.
So, is solar worth it in Alabama? It’s not an easy decision. We’ll give you everything you need to know to make the decision for yourself. Stick around as we break down the costs, benefits, and everything in between.
The average price for a home solar panel system in Alabama is $14,700 for a 6kW system or about $2.45 per watt. Systems will vary depending on the solar installation company the types of solar panels you choose and the size of your system. When shopping for solar panels you should consider getting multiple quotes from various installers.
| Average Cost 6 kW System | Average Cost 10 kW System | Estimated Tax Credit (10 kW System) | Average Cost/Watt | |
|---|---|---|---|---|
| U.S.Average | $18,771 | $31,285 | $9,385.50 | $3.13 |
| Alabama | $20,820 | $34,700 | $10,410 | $3.47 |
| U.S.Average | $18,771 | $31,285 | $9,385.50 | $3.13 |
| Most Costly State(Michigan) | $22,680 | $37,800 | $11,340 | $3.78 |
| Least Costly State(Arizona) | $14,640 | $24,400 | $7,320 | $2.44 |
For most, the ideal solar system size is the sweet spot between price and capacity. The goal is to generate enough electricity to cover your home's demand while keeping overall costs low as possible.
I.E. Get the best bang for your buck.
| System Size | System Cost | Cost After Federal Tax Credit |
|---|---|---|
| 5 kW | $17,350 | $8,785 |
| 6 kW | $20,820 | $10,542 |
| 7 kW | $24,290 | $12,299 |
| 8 kW | $27,760 | $14,056 |
| 10 kW | $34,700 | $17,570 |
Unfortunately, nothing is perfect - including solar. To avoid buyer's remorse, you should think about all the pros and cons associated with installing solar equipment on your home. Then weigh them against each other to decide if it makes sense for you.
Everyone has their own opinion on how to interpret and weigh the pros and cons against each other. Our goal is to present the most common pros and cons and let you make your own choice.
Solar looks pretty bright for Alabama.
Let’s start with low solar prices. Alabama is right near the cheapest state for solar at $14,700 before incentives on average for a 6kW system. That is a great place to start if considering to purchase a system for your home. In addition to low costs, solar in Alabama offers substantial cost savings.
Alabama is a pretty sunny state that ensures solar panels can generate a significant amount of electricity, contributing to energy independence and reducing carbon footprints. This is the biggest factor when considering solar because, without the sun, there is no power.
While there isn’t net metering, or many other incentives for solar compared to its neighbors, we still can’t say solar is a bad idea for Alabamians. We would recommend also looking into batteries to go along with your panels. This will give you the energy independence that other states get with net metering. Although it’s a higher upfront cost, in the long run, you’ll gain higher benefits because you own the system and aren’t tied to changing rates and policies.
If you are on the fence you can use this tool to get an accurate cost breakdown for your home based on your historical energy usage.
There are several ways you can purchase and/or finance your solar panel installation in Alabama. Your goals and financial situation will dictate which option is best for you.
The most straightforward option. You pay upfront for the entire cost of the rooftop solar system. No interest, and fewer headaches, but many people are hesitant about spending several tens of thousands of dollars out of pocket.
The most common method for buying solar systems. Like many other types of large purchases, you can finance your solar system through a bank or solar loan provider.
This sounds great, and many other solar loan salespeople will leverage the low payment to justify the costs. You will likely hear something like "You pay $250 a month on your electric bill, with a solar loan you will pay $200 and have free electricity."
Do your due diligence before you sign on the dotted line. There are many horror stories of variable loan terms, ballooning interest rates, and harsh missed payment penalties.
Leasing solar panels generally involves less money out of pocket upfront. But, it's important to note - you do not own your solar energy system. You essentially renting the solar system. A solar provider will install the equipment and charge you a fixed monthly fee.
Most solar lease contracts last for a couple of decades, during which time the provider will keep an eye on the system's hardware and performance. At the end of your lease, you can choose to:
Solar leases can be complicated. Not all are bad, but in many cases the lease terms in not in favor of the buyer. Before you decide on a solar lease make sure to read your contract thoroughly. If you don't understand something, ask an expert.
A power purchase agreement (PPA) is a financial agreement where a solar company will design and install a solar system on your home or business with little or no cost upfront. Instead of paying a monthly fee like a lease, the agreement includes a fixed price per kilowatt-hour (kWh) of electricity generated.
For example, you agree to pay $0.12 per kWh of electricity generated for the next 20 years. The solar company will install and maintain your system and sell the power back to you that you use. They may also collect payment for any additional energy they put back into the grid.
Just like a lease, you do not own the panels. When the contract is up, they will either be removed or your contract may have other terms for you to buy or renew your power purchase agreement.
Power purchase agreements can be complicated. Before you sign make sure you review the contract and if possible have an expert in power purchase agreements review the details.
Beyond the 30% Federal Solar Tax Credit, you might qualify for additional incentives that can substantially cut down the cost of your solar panel setup. These perks can vary from state to state and even within local communities. Your local utility or city may offer incentives that can add up to significant savings.
The table below outlines the current incentives available in Alabama. However, this isn't an exhaustive list. Always consult your local utility provider for other potential savings opportunities.
| Name | State | Category | Type |
|---|---|---|---|
| Wood-Burning Heating System Deduction | AL | Financial Incentive | Personal Tax Deduction |
| TVA - Green Power Providers | AL | Financial Incentive | Performance-Based Incentive |
| Agriculture Energy Efficiency Program | AL | Financial Incentive | Grant Program |
| Local Government Energy Loan Program | AL | Financial Incentive | Loan Program |
| Alabama Power - Residential Heat Pump Loan Program | AL | Financial Incentive | Loan Program |
| City of Florence Utilities - Residential Heat Pump Retrofit Loan Program | AL | Financial Incentive | Loan Program |
| City of Florence Utilities - Residential Energy Efficiency Rebate Program | AL | Financial Incentive | Rebate Program |
| Cullman Power Board - Residential Heat Pump Loan Program | AL | Financial Incentive | Loan Program |
| Municipal Utilities Board of Albertville - Water Heater Efficiency Rebate Program | AL | Financial Incentive | Rebate Program |
| Sheffield Utilities - Residential Heat Pump Loan Program | AL | Financial Incentive | Loan Program |
There are hundreds of solar companies in Alabama. From solar installers to solar loan providers, and manufacturers. Each is a piece of the puzzle to help you get outfitted with solar panels.
To make things simple, EnergyBot works directly with 3 of the largest solar companies to give you a comprehensive view of the market.
The solar companies we partner with:
We believe comparing these three names in the solar industry will give you the info you need to decide if solar panels are right for you.
Just because solar is a popular discussion right now, doesn’t mean it makes sense for everyone. It is still a large and expensive decision. Installing solar has great financial and environmental benefits but it won’t feel beneficial if you run into issues. Along with studying a 20-year cost comparison for your home, read some more tips to keep in mind when mulling over your decision on your installer, system design, and financial plan.
AL.com is calling the state out on being at the bottom in terms of solar is calling the state out on being at the bottom in terms of solar. While that may be true in some of today’s projects, this may be a little harsh. The Solar Energy Industries Association ranks Alabama 28th as far as Q1 of 2023. These stats take into account production, investments, projections, impact, and polices.
The article points out that according to a report by the Southern Alliance for Clean Energy, Alabama is at the bottom in terms of solar energy production. It ranks last in distributed solar, which includes small installations like rooftop panels on homes or businesses.
Alabama Power, the state's largest electric provider, was labeled a "SunBlocker" for its below-average projected four-year solar capacity. Despite this, the company states that nearly one-third of the energy they generated last year came from clean sources, including solar.
Despite the haters, there is a lot of solar and renewable growth in Alabama. The Alabama Public Service Commission has approved Alabama Power to add up to 2,400 MW of new solar capacity within six years. While this doesn't mean they'll build it all, it allows them to pursue more large-scale solar projects based on customer demand for renewable resources.
The article also mentions upcoming large-scale solar projects, including a 160 MW solar farm for Mercedes-Benz and a 200 MW project for the Tennessee Valley Authority.
Alabama is rising in the solar rankings, especially if more such projects are announced.
We have helped thousands of customers find electricity plans for their home or business. And we are pretty darn good at it, with over 1,000 5-Star reviews we know how to help you stay powered up.
Now using the same one-of-kind technology and platform we are helping consumers in Alabama decide if solar is right for them. You will notice that sometimes our numbers make solar look less attractive. That's not by accident. We believe you should have full transparency during the solar purchasing process.
We aren't here to sell you something. We are here to help you make the best energy decision for your home or business.
The cost of solar panel installation in Alabama can vary significantly based on a number of factors, including the size and type of the system, the complexity of the installation, your solar installer, and the specific location. However, the average cost of solar panels in the U.S. was about $3.13 per watt, before any incentives or tax credits.
A typical residential solar system is usually around 8 kilowatts (8,000 watts), but varies based on energy use and the size of the house. The US average cost for a 6 kW system is $18,771 and the US average cost for a 10 kW system is $31,285, before incentives. The average price for a home solar panel system in Alabama is $14,700 for a 6kW system or about or about $2.45 per watt.
The number of solar panels you would need depends on a variety of factors such as:
To give you a rough estimate, let's say you live in a location that receives about 5 hours of peak sunlight per day, your solar panels have an efficiency of 20%, and each panel has a power rating of 300 watts. If your home uses about 10,400 kWh per year, you would divide this by 365 to get your daily energy use (about 28.5 kWh). You would then divide this by the hours of peak sunlight (5 hours), to get your required power output per hour (about 5.7 kW). If each solar panel produces 300 watts (or 0.3 kW), you would divide 5.7 kW by 0.3 to get the number of solar panels you need, which would be about 19 panels.
The installation process for solar panels can take anywhere from a few days to a few weeks, depending on the size of the system and the complexity of the installation.
Your installer should be able to give you an estimated timeline based on your specific project.
Solar panels generally require very little maintenance. However, it's a good idea to have them inspected every few years to ensure they are working properly. Besides operation, it is recommended they are cleaned off about once a year to be free from any debris or dirt that may have accumulated on the panels. Most solar panel installers offer maintenance services for an additional fee.
Most solar panels come with a 25 to 30-year performance warranty, which guarantees a certain level of electricity production. This is also their expected life span but can continue to generate power beyond 30 years. Make sure to read the fine print to understand what's covered and what's not. Some warranties might only cover specific parts of the solar system, like the inverter or the panels themselves.
The inverter, which converts the direct current (DC) from the panels into alternating current (AC) for your home, typically has a shorter lifespan than the panels. You might need to replace it once during the lifetime of your solar system. Factor this into your long-term cost calculations.
Some homeowner's insurance policies will cover solar panels, but it's best to double-check. You may need to add a separate rider or even choose a different insurance provider to ensure your investment is protected.
For a system with no moving parts, it may seem like putting panels are your roof is a breeze. While DIY projects may be a frequent endeavor for the home handyman, DIY solar panel installation isn’t something we would recommend for most.
The biggest challenges at play are the intricate electrical work. Not only can mistakes damage the expensive system, there are also serious safety concerns for those who aren’t electricians.
We recommend at least getting a quote before you try taking on this project. You might be surprised to find that labor costs are a relatively small portion of the overall expense.
When it comes to solar panels, you'll mainly encounter two types: Monocrystalline and Polycrystalline. Both have their advantages and disadvantages, but either can meet your home's energy needs effectively. In general, Mono-panels are more expensive and more efficient. Poly-panels are slightly less efficient but more affordable. Due to the efficiency difference, you may need a few more poly-panels than mono-panels. There are a handful of other factors as well: roof weight capacity, roof area, roof angle and orientation, and of course your financial limitations.
Instead of making a blind choice, consult with a solar installer who can assess various factors like your budget, location, and energy requirements. They can provide a tailored recommendation, ensuring you get the most efficient panels for your specific situation.
