Solar Panel Cost in Alabama (2023 Local Savings Guide)
In this EcoWatch guide on the cost of solar panels in Alabama, you’ll learn:
- How solar panel costs in Alabama compare to the U.S. average
- What affects solar prices for Alabama residents
- How much you can save by going solar in Alabama
- What makes Alabama a good state for solar
Cost of Solar Panels in Alabama
Solar panel systems in Alabama typically cost around $2.45 per watt, which is quite a bit cheaper than the national average of $2.66. However, most Alabama solar customers need an 11.5-kW system to offset the average electricity bill of $144 per month. This is one of the largest monthly bills in the country, which both makes solar more expensive to install and more worth it for long-term savings.1
Even with the lower cost of solar equipment, Alabama residents will pay more for their systems than most. The average total cost for a home solar project is $28,175 before the federal tax credit or $19,722 after the credit is applied.
Keep reading to learn more about solar costs and incentives in Alabama. Or, if you want to jump straight to getting a quote for an installation, you can follow the links below to speak with a verified professional.
Eagle Solar & Light
Creative Solar USA
Solar Panel System Installation Cost in Alabama
The most significant factor when estimating your cost of going solar is the size of the system you need. Every additional kilowatt required to offset electricity costs will bump up your total by an estimated $2,450. The average home in AL requires an 11.5-kilowatt system, but the table below provides typical pricing for other standard system sizes in the area.
|Size of Solar Panel System||Alabama Solar Panel Cost||Cost After Federal Tax Credit|
Want to see a list of the top solar installers in Alabama that can provide you with an affordable, high-efficiency system? Click here.
What Determines the Cost of Solar Panels in Alabama?
Solar panel systems in Alabama can range quite a lot in price, with most homeowners paying between $16,317 and $27,195 after taking advantage of the federal tax credit. A number of important factors affect your system cost, and it’s challenging to determine what you’ll pay without knowing how these factors apply to your specific needs and property.
Below we’ll take you through the major factors that determine system cost so you’ll have a better idea of where your total tab might fall.
Solar equipment is expensive and is usually the biggest determining factor in your all-in system costs. To a large extent, the climate and weather in Alabama dictate what equipment will be appropriate for your home.
Alabama residents experience around 213 sunny days per year, which is just above the national average. Abundant sun means there is no need for high-efficiency, higher-cost panels to offset energy bills, and even tier-two panel brands will typically suffice in AL.
Overall, this means somewhat lower system costs in AL than in states that get less sun and/or are more northerly.
However, Alabama is located in Dixie Alley (the southeastern U.S. version of Tornado Alley), and the state is prone to tropical cyclones and hurricanes as well as tornadoes. These extreme weather events put the electrical grid at high risk of outages.
Many Alabama solar customers choose to include solar batteries with their panels, which can eliminate power outages but add thousands of dollars to equipment costs. If you plan on adding batteries to your system, you can expect your total price to bump up significantly.
Solar Financing in Alabama
The type of financing you use for your solar panel purchase can also swing your price up or down quite a bit.
Paying with cash means you’ll pay only equipment and labor costs. Taking out a solar loan means you’ll be incurring interest charges as well as paying for your system. At an average system cost of $19,722 and an interest rate of 5%, you’re looking at an additional $3,900 in interest on top of your system price.
Alabama does offer statewide, government-backed financing solutions to reduce the added cost of financing your panels. It provides Property Assessed Clean Energy (PACE) financing for residential and commercial customers looking to keep interest rates low.
Unfortunately, low-income households don’t have any dedicated solar financing solutions in Alabama to make solar panels more accessible.
Alabama Solar Installation Company
As you can probably imagine, pricing varies among different solar installers based on equipment costs, labor rates and more. Even if you choose the same equipment and system size from two companies in Alabama, you could be quoted totally different totals.
Some of the most significant price discrepancies between installers are due to the equipment brands offered. For example, if you look at Eagle Solar & Light and SunPower — two of the best solar companies in Alabama — you’ll see they carry different brands.
Eagle Solar & Light installs brands like REC, which are considerably cheaper than the Maxeon panels that SunPower exclusively installs. These companies will, therefore, differ in price by thousands of dollars, even for a system of the same size.
Given the pricing discrepancies, it’s crucial to compare installers based on value delivered rather than just on cost, as panel quality, longevity, warranty and performance can all vary by brand.
Additional Considerations and Costs in Alabama
Below are some additional considerations for you when thinking of going solar in Alabama. These won’t have much of an impact on your system price, but they can affect your overall experience.
- Permits: Solar systems in Alabama can’t be installed without the proper building permits. Your solar installer will usually handle the permits, but you should confirm this before signing any agreements for service.
- Licenses: Alabama requires that all solar installers maintain a valid electrical contractor license. It’s worth checking to ensure your installer is properly licensed for your own safety and your system’s legality.
- Warranties: Solar warranties are important because they protect your investment and help ensure that your system continues to function as intended. You don’t have to prioritize your brand choice by warranty coverage, but longer and more comprehensive warranties are always a better option.
- HOAs: Unfortunately, there are no laws in Alabama preventing your homeowners’ association from prohibiting solar panel installations. You should always check with your HOA, if you have one, before signing an agreement with a solar installer.
- Environmental zoning: The zoning laws in Alabama rarely cause issues for rooftop solar installations, so you shouldn’t run into any problems with zoning.
What Solar Incentives Are Available in Alabama?
Many Alabama homeowners understandably struggle with the idea of paying nearly $30,000 to go solar. Luckily, the federal government and the state government both offer tax incentives and other benefits to homeowners who convert to clean energy. Below are the most appealing incentives for going solar available in Alabama.
|Incentive||How it Affects the Cost of Solar Panels in Alabama|
|Property Tax Exemption||Alabama’s Property Tax Exemption for Renewable Energy Facilities ensures that, although the value of your home will rise after installing solar, your property taxes won’t go up with the increased value.|
|Sales Tax Abatement||Alabama’s Sales Tax Abatement for Renewable Energy Facilities allows homeowners to pay less sales tax when purchasing solar equipment.|
|Net Metering||Through net metering programs, homeowners can receive credits from their utility company for any excess power their panels produce. Alabama power companies are not required to provide these programs, but you can check with your utility to see if it offers net metering. Learn More|
|Local Solar Rebates & Incentives||We recommend checking for any additional incentives. Some solar-friendly cities provide rebates and other ways for homeowners to save money on clean energy.|
|Federal Solar Tax Credit||The solar investment tax credit (ITC) is applied to any federal income tax you owe and is valued at 30% of your total system cost. In Alabama, where the typical system totals $28,175, that’s a credit of $8,453, bringing the effective total down to $19,722.|
The Best Solar Panel Brands Available in Alabama
The table below lists some of the top solar panel brands available in Alabama. We’re also including some relative pricing so that you can see how these brands stack up against each other and which ones are likely to suit your budget.
|Solar Panel Brand||Average Cost Per Watt ($-$$$$$)|
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EcoWatch FAQ: Solar Panel Cost Alabama
At EcoWatch, we’re happy to get questions about the process and costs of getting rooftop solar from Alabama residents. Below are some of the questions we see most often, along with our responses. If you have specific questions that aren’t answered here, reach out to our team of solar experts at firstname.lastname@example.org.
The average homeowner in Alabama needs an 11.5-kW system to offset electricity costs entirely. At a typical cost of $2.44 per watt, that’s a standard total of around $28,175 before the federal tax credit or $19,722 after the credit.
With that being said, your total can be significantly more or less expensive. Your required system size is based on many factors, including your home size, the direction your roof faces, your average monthly energy bills, shading on your property, and much more. The only way to get an accurate quote for going solar is to have a reputable solar company assess your home and create a customized estimate.
Yes, solar panels boost property value in Alabama. According to estimates from research done by Zillow, the typical value increase is about 4.1% from installing solar.3 With average home prices in Alabama of $189,976 at the time of publication, that’s a typical value bump of $7,789.4 The bump in value can be even more significant in densely populated areas, like Birmingham and Montgomery.
It’s crucial to understand that this value increase will only be enjoyed if you buy your PV system with a cash purchase or via a solar loan. Leases and power purchase agreements (PPAs) will not bump up your home value.
In most cases, it is far better to use a cash purchase or solar financing to buy your solar panels than to opt for a lease.
Solar leasing often seems appealing because of the no-money-down option, but you’ll pay a monthly fee and miss out on many of the benefits of going solar. Most notably, you won’t be able to take advantage of the federal tax credit — an average of $7,326 in Alabama — or the boost to property value — an average of $7,789 in AL. The state incentives aren’t available with a solar lease, and leases typically save you less in the long run on your electricity bills.
You might see some solar panel installation companies advertising “free solar panels,” but panels are never really free. These companies are likely using this marketing tactic to get you to sign a solar lease or power purchase agreement (PPA). These options are far less beneficial than purchases and solar loans.
With that being said, solar panel systems pay for themselves in Alabama over time. Considering the long-term savings when buying or financing your solar system, you can consider the equipment free.
It is possible to eliminate your electric bills with a solar energy system in Alabama, but it will be more difficult here than in many other states. This is due to net metering not being mandated by the Alabama Public Service Commission, the policies being set by power companies, and the above-average electricity rates.
However, if your roof is large enough to support the system size you need and you couple your panels with solar batteries for backup power, it is possible to bring your energy costs down to $0 per month in Alabama.
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