Top 5 Solar Companies in alaska

Below you’ll find the top solar companies in Alaska 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 Alaska Solar Overview, keep reading:

Alaska Solar Overview

Although Alaska currently ranks last among states in terms of solar output, the state experienced a major spike in installations in 2019. Solar power works surprisingly well in Alaska, with panels operating with greater energy efficiency in arctic temperatures, and light-reflecting snow maximizing panel output. And as the price of solar panels continue to fall, adoption rates are expected to continue to rise in the Last Frontier.

Read on to learn more about the ins and outs of going solar in Alaska.

Pros and Cons of Going Solar in Alaska

Here's an at-a-glance description of the current benefits and drawbacks of switching to solar in Alaska:

Benefits of Going Solar in Alaska:

  • Ideal for off-grid systems
  • Federal solar tax credit
  • Local property tax exemption
  • No state sales tax
  • Short payback period

Drawbacks of Going Solar in Alaska:

  • Low sunlight levels
  • Limited providers
  • No state-level rebates
  • No income tax credit

Cost of Solar in Alaska

The current price per watt for solar panels in Alaska is around $2.41. After applying the 30 percent federal tax credit, the typical 6 kW solar panel system costs a little less than $12,000. This is lower than the national average for residential systems.

Compared to the average Alaska utility cost of 33.9 cents per kilowatt hour, solar energy Alaska is much less expensive at around 8.7 cents. This is assuming an average compound rate increase of 3.5 percent annually.

With these factors in mind, solar customers can expect to receive a return on their solar investment within 9 to 10 years, assuming a full-cash purchase.

Alaska Solar Financing Options

Alaska appears to have all financing options (purchase, loan, lease, and PPA) available to homeowners:

Outright Purchase

Direct purchase in the fastest way to see a return on investment for solar energy in Alaska. Over 25 years, the expected life of a solar panel system, homeowners would end up paying 25 percent less in utility costs by choosing solar over traditional energy sources. These savings may seem small, but can amount to tens of thousands of dollars — and that’s not even accounting for the tax credit panel owners receive after the first year.

Solar Loans

Alaskans can choose either a solar loan or a home-equity line of credit (HELOC) to finance their solar energy systems, though loans for solar may be harder to come by in Alaska than it is in other states. Financing through a loan or HELOC will extend the payback period of your system by up to five years; however, you will still have access to the federal solar tax credit, which can result in up to $8,000 in savings after the first year of owning your system.

Solar Leases

Solar leases do appear to be a viable option for Alaskans interested in investing in solar without paying upwards of $20,000 over the course of 10 to 15 years. Solar leases allow homeowners to “rent” their system, while the installer pays for maintenance and system upgrades.

Just make sure your solar lease agreement carries a performance guarantee clause. A performance guarantee incentivizes the installer to keep the system in tip-top shape; without a guarantee, you may find yourself paying more than you expected.

Solar leases do not qualify customers for the federal tax credit.

Power Purchase Agreements

Customers in Alaska could also pay for solar power through a power purchase agreement (PPA). A PPA allows customers to pay only for the energy the system mounted to their roof or land produces — no installation, maintenance, or labor fees. Some PPAs also include the option for homeowners to purchase the system at the end of the contract, which could significantly increase the value of the home. Just be aware of the PPA escalator attached to some contracts, which allows the monthly price to increase on a fixed basis.

PPAs do not qualify customers for the federal tax credit.

Alaska Solar Incentives

Alaska is not the most competitive state in terms of available solar incentives; the state offers zero solar rebates or solar programs for low-income individuals and families. That said, Alaska has some incentives that make solar energy more accessible and appealing:

No State Income Tax

Because Alaskans’ income is not taxed at the state level, the 30 percent federal solar tax credit can represent a larger figure than in most other states, meaning savings on solar will also be positively impacted.

Property Tax Exemption

One incentive that stands out is Alaska’s property tax exemption, which prevents the added value of installing a solar system on your home from being taxed with the rest of your property.

No State Sales Tax

Alaska has no state sales tax, meaning customers will save potentially hundreds of dollars in taxes when they purchase a solar energy system in Alaska.

Alaska Solar Policy Information

From a policy standpoint, Alaska is far behind other states in passing legislation that promotes solar energy adoption in the state. Alaska has no renewable portfolio standard (RPS), meaning it has no renewable energy target and no penalties for missing that target. Consequently, Alaska has no solar carve-out that requires utility companies to produce a certain amount via solar energy, or performance payment program. Lastly, the state has no interconnection rules that require utility companies to “play fair” in allowing solar systems to plug into the grid.

Electricity Rates

On the other hand, Alaska ranks high for utility costs. At around 22 cents per kilowatt hour, electricity prices in Alaska are higher than the national average, which creates massive savings potential for customers who switch to solar.

Net Metering

Alaska enforces state wide net metering standards, which requires utility companies to measure the amount of energy a solar array produces, how much of that energy the household consumes, and credits homeowners for any unused surplus energy.

Unfortunately, these guidelines only apply to systems up to 25 kW.

Alaska Solar Statistics

Alaska currently ranks 50th among reporting states for total megawatts of energy installed in the state (8.26). Solar energy accounts for less than a tenth of a percent of all energy produced in the state; however, residential solar installations rose dramatically in 2019, and the solar installation number sits at 778 through the summer of 2020. Alaska hosts nine solar companies representing almost 70 solar employees.

Interested in a solar quote? Check out the top-ranked solar companies in Alaska and read reviews from verified solar customers.