Alabama solar panels: The complete guide in 2025
Data updated Jul 15, 2025
Interested in going solar? You'll need to install a 13.81 kW solar panel system to cover the average electric bill in Alabama, which will cost you about $30,940 after the federal tax credit.
Cost for an average system in Alabama
| Out of pocket cost, cash | $44,200 |
| Federal tax credit (30%) | - $13,260 |
| Price post tax credit | $30,940 |
| 25-year savings | Payback period | Electricity offset |
|---|---|---|
| $56,205 | 11 Years | 84% |
As long as your federal tax bill is high enough, you can take advantage of the federal investment tax credit (ITC).
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Going solar in Alabama
Alabama’s sunny skies, mild winters, and above-average natural gas prices make it a natural fit for solar panels––they'll reduce your carbon footprint and your reliance on the utility electric grid.
Factor in the federal solar tax credit, and Alabamans can cut the cost of solar by thousands of dollars, speeding up your payback period and increasing the value of your investment.
Here's what you should know about going solar in Alabama.
Cost
How much do solar panels cost in Alabama?
Solar panels will save you a lot of money over time, but the upfront costs aren't cheap. The average Alabama homeowner needs a 13.81 kW solar panel system to cover their electricity needs, which comes out to $44,200 before incentives. Prices range from $37,570 to $50,830, but after the federal tax credit, that drops by 30%.
While this may sound high, it will pay off in Alabama. That's why over 1,900 Alabama homeowners have used EnergySage to receive and compare quotes for solar installations. You can expect to earn back your initial solar investment through electricity savings in about 10.68 years, while most systems last at least 25 years. You'll often see this number referenced as your solar payback period.
Solar panel systems are expensive upfront purchases, but there are a few different financing options to make that initial cost more manageable.
Cash purchase: You pay for your entire system upfront. This provides the best long-term savings.
Solar loan: Enables you to maintain ownership of your system while owing little to no money upfront. When it comes to solar loans, subsidized clean energy loans through local incentive programs are usually your best bet. The next best options include a home equity loan or a personal loan—private solar loans typically come with higher interest rates or upfront fees.
Solar lease or power purchase agreement (PPA): A third-party company owns your system and either leases you the solar panels (solar lease) or allows you to purchase the electricity they generate (PPA). In general, these provide the lowest savings and garner the most negative press about solar. If you go this route, remember to read the fine print so you’re not trapped in a contract for longer than you intend.
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Incentives
What are the best solar rebates and incentives in Alabama?
Incentives help bring solar's price tag down considerably in Alabama. Here are the major ones to know about:
| Incentive | Average savings in Alabama | Description |
|---|---|---|
Residential Clean Energy Tax Credit, formerly the federal investment tax credit (ITC) | $13,260 | Lowers your solar panel system's cost by 30% |
Alabama solar property tax exemption | 0.4% of your system’s cost, annually on average | If you use solar energy as a source of power, and your city or town approves your application, you won't need to pay a property tax for 10 to 20 years on the value your solar panels add to your property. |
Is net metering available in Alabama?
Alabama doesn’t offer net metering, but if you’re an Alabama Power customer, you can benefit from net billing. The catch is that the utility company only offers partial credit for every kWh. You'll have to sell the electricity to them at a significant discount compared to what they’ll charge you to buy that electricity back later.
Learn more about this solar buyback program:
Equipment
Equipment quality
Solar panel efficiency continues to improve every year—that is, they produce more power per square foot. As of 2025, many top-selling solar panels produce around 450 watts in full sunlight. To maximize your roof’s production potential, look for panels with at least that level of output.
It’s also important to choose an inverter setup that fits the design of your roof.
And if you plan to add a solar battery, make sure it’s compatible with your inverter setup for smooth integration.
While higher-end equipment can be more expensive upfront, it often leads to greater savings over time. Premium products usually come with longer warranties—up to 25 years or more—and are built to last. They also degrade more slowly, meaning you’ll get more consistent energy production further into the future.
Companies
Who are the best solar installers in Alabama?
We pre-screen all of the solar companies on EnergySage to ensure they'll provide you with a high-quality installation. We then rate them based on their results, reputation, and responsiveness. Here are the highest-rated EnergySage installers in Alabama:
Ready to start looking for a solar installer?
Here are some of the most popular ones near you:
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resources
Top solar resources for Alabama
- Alabama Solar Loan Providers
Search through our list of top loan providers to finance your solar panel system.
- Alabama Department of Economic and Community Affairs
Learn about AL energy programs from the state government.
- Alabama Public Service Commission
Read more about how utility companies work in AL.
- Alabama Electricity Profile (EIA)
Learn about AL energy production and prices.
- AL State Solar Factsheet (SEIA)
See quick stats about how much solar energy has grown in AL.
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