Solar Incentives
Alabama solar incentives and rebates

Alabama Solar Incentives & Rebates

Start Here:$0 Down Solar Installation
Get A Free Quote
Start Here:$0 Down Solar Installation
Get A Free Quote
Solar By State / Alabama

Going Solar Is Simple With Alabama Solar Incentives And Rebates

Alabama is considered one of the hottest states in the United States of America, with an average high temperature of 32 °C or 90 °F during the summer season. The hot weather can be a good time for property owners to invest in solar energy power generation and be more economical.

However, Alabama State does not provide any solar incentives or rebates for installing solar panels on your property. It also doesn’t allow or adopt a regulation for net metering. But you can still go solar. Find out below the benefits of investing in a solar panel.

Alabama Solar Incentives And Rebates

Alabama Federal Solar Tax Credit

The Federal Investment Tax Credit (ITC) is available to Alabama homeowners. It will substantially influence property owners who purchase their solar panel systems outright. The ITC is undoubtedly the significant tax solar incentive for Alabamans. This credit currently amounts to 26% of your solar system's cost. In 2023, the tax credits for installations will drop to 22%. This is one of many reasons why it makes sense to go solar without delay.

And if you invest in a solar panel by the end of 2032, the federal tax credit is 30% of the price of your solar panel system. This means 30% off the system's total cost, including equipment, labor, and permitting.

Sample Calculation: Assuming that your solar energy system costs $20,000, you would be eligible for a federal solar tax credit of $6,000, which represents 30% of the system's cost.

By 2033, the federal tax credit will fall to 26%.

Alabama Solar Power Performance Payments (Performance-Based Incentives or PBI)

Alabama offers Solar Power Performance Payments, performance-based incentives (PBI), and production incentives through the Tennessee Valley Authority. The solar incentives come in the form of small cash payments calculated based on the number of kilowatt-hours (kWh) or BTUs generated by your renewable energy system, as measured by the meter. The electricity produced is associated with Solar Renewable Energy Credits (SRECs), whose value varies according to the principle of supply and demand. SRECs can be a beneficial tool to aid in offsetting the cost of your solar energy system.

Alabama Solar Property Tax Exemptions

The Alabama state provides a ten (10) year property tax exemption for value added by solar. This can be renewed for ten (10) years, up to a maximum of twenty (20) years per installation.

The accessibility and ease of requesting this property tax exemption will be determined by where you reside in Alabama. Property owners can submit a request to their municipal or county tax authority to make the most of this solar incentives tax exemption. As per the law's mandate, property owners must send an application before operating and installing their solar energy system.

See If You Qualify For Zero Down Solar Installation And Solar Rebates!

Net Metering

The Public Service Commission (PSC) in Alabama doesn’t have an existing ordinance on net metering, meaning property owners must discuss any arrangements with their utility company. Let’s say your primary utility company is Alabama Power. You can apply for a "Purchase of Alternate Energy" (PAE) rate to which they pay property owners at a lower rate than retail for exported energy. But this isn’t considered a solar incentive by itself; however, this will measure up to a solar installation that will save the property owner money long term.

Alabama Solar Incentives And Rebates At A Glance

Considering the high cost of energy in the state of Alabama and the benefits you can obtain from the hot temperature, investing in a solar panel can be beneficial and a life-long acquisition.

If you are considering investing in a solar system, look for a reliable company to assist you in evaluating your Alabama solar incentives and rebate options.


EnergyBillCruncher is an unbiased and free online resource created to benefit homeowners. Join our newsletter & stay up-to-date with the latest solar news.