Solar panel cost in Alabama

The average cost for an installed residential solar system in Alabama is currently $10,878 after claiming the 26% federal solar tax credit. This is $2.45 per watt.

Solar prices near you

Cost range of local prices

$10,047-$12,280

Net profit (savings less system cost)

$43,968-$53,738

Payback period

5.6-6.8 years

Recommended size for the selected utility bill

5.3kW

Chart 1: Distribution curve of AL residential solar cost 2020
$11K
SolarReviews average

Note: Prices after 26% Federal Solar Tax Credit

AL solar panel cost calculator

Cash flow graph based on cash purchase of a 5.3kW system

Alabama solar power overview

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.

Are solar panels worth it in Alabama

Solar panels have fallen in price by more than 80% in the last ten years. In 2020 they also remain subsidized by the 26% 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)

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

Showing 1 - 2 of 5

Top 10 solar panel brands installed in Alabama in 2020

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 2020 "solar systems with battery storage" are becoming more popular. These are known as hybrid systems.

How do solar panels work?

Grid-tied solar system

Solar panels are mounted on your roof and wired together in groups called solar arrays. The power they generate flows into a solar inverter where the direct current (DC) electricity is converted into alternating current (AC) electricity that can be used by your home or exported to the electric grid.

Off-grid solar system

Off-grid solar power involves meeting all your energy needs from the power of the sun. There’s no utility to fall back on. This means the solar installation needs to power the home not just during the day, when the sun is shining, but after dark as well.

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 2020?

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 2020.

Can you buy DIY Solar Panel Kits and install them yourself in Alabama?

Yes you can! In some cases, you can save $3,000 or more when you install solar yourself, even after receiving the federal tax credit. Despite the potential for savings, data from Lawrence Berkeley Labs shows that only about 3% of homeowners choose DIY solar. 

Reasons for this include:

  • The permitting and inspection process for the utility, the state, and municipalities can be quite complex.
  • The installation work is both dangerous and difficult, with electrical work having to be performed at heights.
  • Often times, solar electricity customers will be charged a premium for DIY installations, which can limit savings.
  • In some states, a solar system needs to be installed by a qualified solar contractor in order to take advantage of incentives. In Alabama, a contractor must hold an electrician’s license in order to be considered qualified. Utilities and incentive programs may have additional requirements.  

 

SolarReviews does not recommend DIY solar installations unless you have suitable skills. However, for those who do, SolarReviews published a comparison table displaying solar panel kit prices from the top 10 leading solar kit websites in the US.

Buy DIY solar panel kits online

Prices don’t include installation, permits or inspections

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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