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Alabama Solar Information

Alabama isn’t a bad state for solar. There’s always enough sunshine to cover your basic energy needs or at least to reduce your monthly electricity bill. The 26% Federal Solar Tax Credit as well as some local incentives will make your solar installation even more profitable.
  • #20
    Alabama ranks #20 in the USA for savings from installing solar panels
  • 6013.60 kWh
    Annual AC energy output of a 4 kW solar system installed in Alabama
  • 5.35 kWh
    Solar Radiation (kWh / m2 / day)
  • 13 ¢ /kWh
    The cost of electricity today in Central Alabama Electric Coop
  • 28 ¢ /kWh
    If you don't go solar. The forecast average utility price over the next 25 years

Alabama Solar Facts

  • $2.01
    Average cost of a 4kw solar power system in 2019.
  • 8 years
    Average system payback period.
  • $55,151.70
    Average lifetime savings.
  • 7 ¢ /kWh
    Levelized cost of solar energy.
  • 6 kW
    Recommended system size.

Alabama is a sunny southern state that gets on a minimum of 4.23 peak sun hours per day. Many areas of the state get a lot more sun, which helps Alabama rank close to the middle compared to other states in the sunshine. Unfortunately, the state government has not done a lot to encourage solar development in Alabama so installing solar panels might still be quite expensive. But with the rising cost of electricity in the state, solar is a very smart investment option.

Alabama Solar Facts

  • Alabama ranks 8th as the most potential to benefit economically from solar.
  • Prices on solar have fallen 40% over the last 5 years in the state.
  • Alabama has the 24th’s highest electricity prices in the country.
  • As of today, there 283 MW solar capacity installed in Alabama
  • Solar Power System Cost in Alabama
  • $2.01 per watt
  • $11,700.38 total
  • 8 years

The Cost of Solar Panels in Alabama

In 2020, the average price of solar panels in Alabama is $3.33 per watt. The typical cost of a solar power system installation of the 6kW in Alabama would cost around $20,000. This price does not reflect Federal Tax credit.

Alabama Solar Tax Credits

The Federal Investment Tax Credit – the government program also known as Investment Tax Credit (ITC). It allows you to claim 26 % of the total cost of the solar equipment and its installation as the tax credit and has no cap on its value.

Alabama Solar Incentives and Rebates

Tennesse Valley Authority - if you are a customer of Tennesse Valley Authority you could get a $1000 rebate to offset the initial cost of solar power system installation.

Pros and Cons of Buying Solar Panels in Alabama


  • Relatively short payback period.

    The solar payback period is the time it takes a homeowner to earn back their initial investment in the solar power system through electricity savings. Some of the factors that play a role in a shorter payback period are lower solar costs, high electricity prices, or strong solar programs and incentives. Nationwide, the average solar payback period is just under 8 years. The payback period for Alabama is a little longer than the nation’s average and is about 15 years.
  • After the payback period, solar power is nearly free.

  • Once your solar power system is paid off, you are guaranteed to get many years of free electricity.

  • Great savings on a monthly electric bill.

    You can expect to start saving on your monthly utility bill, once your solar power system begins degenerating electricity. What it means is that you become less dependent on your local utility company and their utility rates, which are highly influenced by inflation. Over the course of 25 years, you can anticipate savings over $15,000 in Alabama.
  • Helping the environment since solar energy is clean, sustainable, and renewable.

    Sunlight is abundant almost anywhere on the planet and is ready to be collected without causing damage to the natural environment. Solar energy is truly clean, renewable, and sustainable power source, besides it can save you a lot of money. It is proven that using solar energy instead of fossil fuels decreases our carbon footprint by reducing air and water pollution.
  • Very low maintenance.

    A solar energy system does not include any moving parts in its assembly so essentially, there is no wear and tear with their operation. Due to this, solar panels are also completely silent when working. The only maintenance that they need is the occasional cleaning to keep them free of dirt and debris.
  • Excellent warranty protection.

    The majority of the solar panels today come with two types of warranties: performance guarantee and extended product warranty. Extended product warranty guarantees any repairs of defective equipment or breakage over their lifespan. The performance warranty guarantees optimal energy production for at least 25 years.
  • Increase in the property value.

    Recently, studies by several real estate companies presented that installing solar panels on the roof of your house definitely increases the value of the property. On average, adding a solar energy system will raise your house value by 4.1%. Additionally, not only houses with solar installations sell at higher prices but they also sell faster than the houses without solar systems.


  • The possible high initial cost.

    Even though the cost of solar energy system installation reached the lowest it has even been in years and keeps declining, the initial expenses of purchasing and installing a PV system might seem quite high for many people. Luckily, residents of Alabama can take advantage of various federal and state tax programs and rebates, offered by utilities. This will significantly cut down the price of switching to solar.
  • Must have a large, open area for installation.

    The installation of an average size residential solar panel system requires large, open space on the roof. That area has to be free of any shade from trees or other buildings for the solar system to work properly. At times, this situation becomes problematic for some homeowners. Luckily, you can also install the solar panels on the ground, provided they do have direct access to sunlight.
  • Must be a property owner to install

    Unfortunately, today, the solar benefits are not yet available to renters, people with low-income, or people without a job. Solar power system installations are mostly available to homeowners with good credit and good income.

Is It Worth Going Solar in Alabama?

Looking at the advantages and disadvantages of solar energy, one can clearly see that adopting solar is a great investment for many homeowners in Alabama. The latest technology development, decreasing solar equipment costs, and the great geographical location with plenty of sunshine make solar an attractive clean energy option in beautiful Alabama.

Tell us how much you are spending on electricity and we’ll calcalute how much you can save if you go solar
According to Central Alabama Electric Coop, we received the cost of kWH in your area and calculated energy consumption based on an average electricity bill for 3 months.
I am claiming the 26% Federal Tax Credit (ends 2022) i

When you install a solar system, 26% of your project expenses apply toward a credit to offset any taxes you owe that year. This federal tax credit is a major incentive to go solar, but it is going to be phased out by 2024.

To be eligible to claim this credit, you must owe federal taxes.

System size

  • Mini
  • Small
  • Medium
  • Large
We recommended
5.83 kW medium system size
Provides up to 80% of electricity consumption
$2.01 per watt
Average system cost
  • image rec 3
    16 x 370 watt
    solar panels
  • +
  • image rec 3
    16 x 300 watt
  • +
  • image rec 3
    2 x 3 800 watt
$101.53/ month
Estimated savings on your average quarterly bill
  • $11,700.38
    Estimated system cost
    Excludes 26% Federal Tax Credit.
    This price does not include the installation cost.
  • 8 years
    Average system payback period
  • $55,151.70
    Estimated utility savings

Example of 4 kW system calculation in Minnesota for electricity bill $100

  • 13 ¢ /kWh
    The cost of electricity today in Central Alabama Electric Coop
  • 28 ¢ /kWh
    If you don't get solar. The forecast average utility price over the next 25 years
  • 7 ¢ /kWh
    levelized cost of solar energy

Relevant product for your system

Entry-level solar panels x 16
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Entry-level microinverter x 16
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Entry-level inverter x 2
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JA Solar 405w Solar Panel 72 Cell JA-JAM72-S10-405MR - A1 Solar Store 15% Off
Cell number 144 cell
DC/Charger Volt Compatible 12v, 24v, 48v
Price per Watt $0.58
Rated Power Output 405 W
Voltage (VOC) 49.86V
Cell Type Monocrystalline
Pickup at 1 location or US shipping
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Panasonic 340W Solar Panel 96 cell VBHN340SA17 Monocrystalline White - A1 Solar Store
Cell number 96 cell
DC/Charger Volt Compatible 12v, 24v, 48v
Price per Watt $1.14
Rated Power Output 340 W
Voltage (VOC) 71.3V
Cell Type Monocrystalline
Pickup at 2 locations or US shipping
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REC 290W Solar Panel Sale - A1 Solar Store
Cell number 120 cell
DC/Charger Volt Compatible 12v, 24v, 48v
Price per Watt $0.52
Rated Power Output 290 W
Voltage (VOC) 38.8V
Cell Type Monocrystalline
Pickup at 1 location or US shipping
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Panasonic HIT 330W Solar Panel 96 cell VBHN330SA17 Monocrystalline Black - A1 Solar Store
Cell number 96 cell
DC/Charger Volt Compatible 12v, 24v, 48v
Price per Watt $1.09
Rated Power Output 330 W
Voltage (VOC) 69.7V
Cell Type Monocrystalline
Pickup at 1 location or US shipping