Solar panels Alabama:

Prices, incentives and best companies 2024

Avg AL solar panel cost:

$9,627 - $11,767*

Avg 25 year savings:

$43,785 - $53,515

Avg payback period:

5.6 - 6.8 years

Estimate cost and savings based on your location and power usage

* Cost data based on quotes for fully-installed solar panel systems submitted on our platform. Prices are shown after applying the 30% federal tax credit.

Alabama solar panels guide 2024

Updated August 18, 2020

There is some room for improvement when it comes to solar power in Alabama. There are no state-based incentives and there is no net metering policy in place. Also, there is no renewable portfolio standard, which is often what pushes utilities to create solar rebates for customers. 

Despite the lack of incentives, Alabama receives plenty of sunlight, so a solar system here will produce more electricity than a system in other areas of the country. 

Residents of The Heart of Dixie can also take advantage of the 26% federal tax credit.

On this page:

Solar power prices, savings and payback in your part of Alabama

The average cost for an installed residential solar system in Alabama is currently $10,290 after claiming the 30% federal solar tax credit. This is $2.45 per watt. However, there is some variance in solar prices in different parts of the state. The graph below shows the average cost of installed solar systems in your part of the state.

Cost range of local prices


Net profit (savings less system cost)


Payback period

5.6-6.8 years

Recommended size for the selected utility bill


Solar panel cost calculator

Cash flow graph based on cash purchase of a 5.2kW system

Are solar panels worth it in Alabama

Solar panels have fallen in price by more than 80% in the last ten years. In 2022 they also remain subsidized by the 30% federal tax credit and the net metering law, making them an excellent investment. They offer a return well above the long term average return from both the share market and also property investment.

Another way to look at this question is the levelized amount you will pay for each kWh of power you will use over the next 25 years with and without solar panels. As you can see below the savings are significant.

Levelized cost of solar energy
Levelized cost per kWh is the cost of the solar system divided by the total number of kWh produced by a solar system over it’s lifetime

5¢ /kWh

If you don't get solar

21¢ /kWh

(forecast avg Alabama electric rates over the next 25 years)

AL solar panel cost calculator

Best 10 solar installers in Alabama


Alabama solar incentives & tax credits

Federal solar tax credit

The most significant and only incentive to install solar panels for homes and businesses in Alabama is the federal solar tax credit. At the end of 2020, the amount of the credit will decrease from 26% to 22% of the cost of the solar installation. 

Because home and business owners want to get the largest incentive amount possible, solar panel installation companies will likely be flooded with new projects before year’s end. In order to maximize your savings potential, the best time to go solar in Alabama is now.

Table 2: Available incentive programs
Eligibility: Federal incentive
Type: Personal Tax Credit
Eligibility: State incentive
Type: Sales Tax Incentive

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Top models of solar panel installed in Alabama 2024

Average cost of solar panel installation in Alabama by system size

System size*
Cash purchase

(After tax credit)

Financed purchase

(After tax credit)

4kW $10,700 $11,449
5kW $12,835 $13,733
6kW $14,700 $15,729
7kW $16,961 $18,148
8kW $19,520 $20,886
9kW $21,402 $22,900
10kW $23,510 $25,156

Best solar companies in the main cities of Alabama

Different types of solar companies

Solar company reviews

Home solar basics

Is it better to lease or buy solar panels in Alabama

You will save most money by buying your solar system rather than leasing it. Read more about the pros and cons of leasing vs buying solar.

How long do solar panels last?

Minimum of 25 years but generally 30 or more

How do solar panels work on a home?

Solar panels power your house when they can but your home uses the utility company for power at other times. In 2024 "solar systems with battery storage" are becoming more popular. These are known as hybrid systems.

How do solar panels work?

Grid-tied solar system

A grid-tied system is the most common type of solar system. It has no solar battery for backup power and utilizes net metering to maximize savings. Solar panels are mounted on your roof then wired together, and the power generated flows into an inverter where direct current (DC) electricity is converted into alternating current (AC) electricity. This electricity is either used by your home or is exported to the utility grid.

Hybrid solar system

In hybrid solar systems, rooftop solar panels are connected to both a solar battery and the electric grid. The solar electricity generated by your panels that your home does not use is stored in the battery instead of being sent to the grid, which reduces your reliance on the utility while also providing backup power when needed. Battery storage is still expensive but you may be able to reduce costs by using state incentives.

Off-grid solar system

Off-grid solar systems are not connected to the grid at all, so all of your energy needs must be met by the sun. There is no utility to fall back on. The solar installation needs to power your home not only during the day, but after dark as well, so many solar panels and a large battery system are required. These systems are often expensive and don’t make sense for homes that have access to the grid.

Read more about types of home solar systems.

Do solar panels require regular maintenance?

No, but cleaning them can improve power generation if they are dirty.

Will residential solar power system cost fall in Alabama in 2024?

Given this environment, and the effect of import tariffs placed on solar panels by the Trump administration during 2018, it is hard to see that solar power system prices in Alabama will fall during 2024.

How much electricity do solar panel systems generate in Alabama?

Depending on the location, solar panels will generate different amounts of electricity.

A solar system that is installed on a south-facing 0-degree pitch roof Alabama will generate 1,550kWh of peak DC (direct current) capacity per year per 1kW in Alabama.

Enter your details into the solar panel calculator to see how your location, roof tilt, and roof direction impacts solar panel production.

What are the pros and cons of installing solar panels in Alabama?

The advantage of installing solar panels in Alabama is that the state receives excellent sunshine, so a solar system here will produce a lot of energy.

The disadvantage of installing solar panels in Alabama is that there is hardly any policy or legislation regarding solar power, so there is a lack of incentives and rebates for installing solar. There is no net metering policy, so utilities are not required to compensate customers for excess electricity their solar system produces. The state’s only investor-owned utility, Alabama Power Company, does provide compensation for surplus energy a solar system produces, but solar customers also must pay a fee for having solar. 

However, because of the 26% federal tax credit, now is the best time to go solar in Alabama.

Enter your details to calculate the cost and savings you are likely to get from installing solar panels for your home.

What you can learn from our state solar panel calculator

This solar calculator requires you to input your address, utility company, your average monthly power spend - it tells you:

If you want to see all of the above but also see live pricing, the three best solar deals available in your city and get binding quotes from each of these solar companies then use this Alabama solar panels calculator. This calculator requires you to also input your name and contact details because most of our 200+ installer partners will only authorize the sharing of their live solar pricing where we have validated that you are a real homeowner with a home in their service area. We respect the privacy of your data and only share your contact details with the solar companies you ask us to get binding quotes from.

Note: Please keep in mind that the best source of up-to-date information on incentives are the solar installers who specialize in your area.

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