Below you’ll find the top solar companies in Alabama as ranked by Best Company and reviewed by verified solar customers. To learn more about what goes into our “Best Rank” score for each company, visit our How We Rank page. For our full Alabama Solar Overview, keep reading:
Per a 2016 report from the Energy Information Administration, Alabama released more than 21 metric tons of carbon per capita, 11th highest among reporting states despite being 24th in population. A recent ruling from the Alabama Public Service Commission isn’t helping solar power efforts in the state, which currently accounts for less than 0.3 percent of all energy production in the Cotton State.
As of September 2020, the ruling has allowed Alabama Power, the state’s largest utility provider to not only continue charging solar customers for access to grid, but also to raise that fee from $5.00 per kilowatt to $5.41 per kilowatt — a rate hike solar energy proponents within the state will essentially kill wide-scale adoption of renewable energy.
As a result, Alabama has few clean energy incentives or providers to offer residents interested in investing in solar energy. Read on to learn more about the ins and outs of going solar in Alabama.
Here's an at-a-glance description of the current benefits and drawbacks of switching to solar in Alabama:
The average cost of solar panels in Alabama is approximately $2.45 per watt. After claiming the 30 percent federal tax credit, a typical solar panel system (~6kW) will cost around $11,000.
Compared to average utility costs in Alabama of 21.9 cents per kilowatt hour over 25 years, the utility cost of going solar is much lower. Solar customers in Alabama will pay on average about 5.9 cents/kWh — assuming utility rates continue to increase at 3.5 percent compound interest per year.
Solar customers can expect their systems to pay for themselves after about 12 to 13 years. This payback period is nearly double the length of more solar-friendly states like California. Over the course of 25 years, solar energy users who purchase their systems outright can see a cumulative savings of more than $20,000.
Alabama offers fewer financing options than most states, with only outright purchase and solar loans as the only means of going solar in the state; power purchase agreements (PPAs) and solar leases.
Owning a solar panel system outright is the fastest way to take advantage of all the savings incentives and long-term profits of going solar. In Alabama, the average cost of a 6 kW solar panel array comes out to a little more than $18,500.
Accounting for the 30 percent federal tax credit, that number gets reduced to just above $14,000, and if utility rates hold steady, homeowners can expect to pay their system off in about 12 to 13 years — increasing the value of their home by nearly $14,000.
With a solar loan, homeowners often don’t need to put any money down, and can still take advantage of the Federal Solar Investment Tax Credit.
In Alabama, homeowners can receive a home-equity line of credit for up to $18,585 at a fixed rate of no more than 4.5 percent on a 15-year repayment plan. Unfortunately, this will result in loan payments that are on average higher than traditional utility bill payments; however, once the loan is paid off, customers will see a yearly savings of about $1,500.
Unfortunately, Alabama has no solar incentives at the state level. The only incentives that exist for people interested in investing in solar energy in Alabama occur at the federal level that refunds customers 26 percent of whatever they paid for their solar systems after the first year of operation.
Alabama offers no solar rebates or tax credits. Neither does the state provide property or sales tax exemptions for solar array owners.
Alabama policies have been put in place to disincentivize solar in the state and give utility companies greater leverage against renewable energy providers.
A Renewable portfolio standard (RPS) is a law that requires renewable energy to account for a set percentage of a state’s total energy output within a certain amount of time. This requires utility companies to promote renewable energy in the state and incentivizes homeowners to make the switch to solar.
Alabama has no RPS.
Net metering standards require utility companies to monitor how much energy a solar panel system produces against how much it consumes and credits homeowners for any surplus.
Alabama has no net metering standards.
A state’s interconnection rules dictate how solar users can plug into the utility grid. The simpler and more straightforward a state’s interconnection rules, the easier going solar can be. Unfortunately, Alabama’s utility companies have complete say over how solar users can connect to the grid, setting their own rules in the process.
Per the Energy Information Administration (EIA), renewable energy accounted for only three percent of Alabama’s total energy output, with most of that energy coming from commercial solar farms. In total, the state has installed over 280 megawatts of solar energy in the state in more than 30,000 homes. The state ranks 31st in the nation for solar energy and hosts 38 solar companies and solar installers employing approximately 700 people.
Interested in a solar quote? Check out the top-ranked solar companies in Alabama and read reviews from verified solar customers.