Solar Panels in Alabama2026 Cost Guide & Incentives
Average cost, state incentives, payback estimates, and how to find certified installers in Alabama.
$18,000–$30,000
Avg system cost
$12,600–$21,000
After 30% ITC
4.7 hrs/day
Peak sun hours
$0.137/kWh
Avg rate
Is Solar Worth It in Alabama?
Based on a home with a $150/month electric bill in Alabama
Est. system size
7 kW
Gross cost
$20,434
Federal tax credit
−$6,130
Net cost
$14,304
Year-1 savings
$1,800
20-year savings
$45,911
Estimated payback: 7.9 years — then 12 years of free electricity.
* Estimates assume $2.90/W installed, 92% solar offset, and 3% annual electricity rate inflation. Get an installer quote to confirm your actual savings.
Alabama Solar Incentives & Policies
Federal
Investment Tax Credit (ITC)
30%
of total system cost — off your federal tax bill
Available through 2032
Alabama State
State Incentive
No state credit; federal 30% ITC applies
Additional Alabama Solar Policies
Net Metering: Limited — check with your local utility
Property Tax Exemption: No exemption — solar adds to assessed value
Sales Tax Exemption: Sales tax applies to solar equipment purchase
Solar Installation Cost in Alabama by System Size
| System size | Gross cost | After 30% ITC | Year-1 savings |
|---|---|---|---|
| 5 kW | $12,272,800 | $8,590,960 | $1,081,108/yr |
| 7 kW | $17,181,920 | $12,027,344 | $1,513,551/yr |
| 9 kW | $22,091,040 | $15,463,728 | $1,945,995/yr |
| 12 kW | $29,454,720 | $20,618,304 | $2,594,659/yr |
* Costs based on $2.90/W national average. Alabama installer pricing may vary ±15%.
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Frequently Asked Questions — Solar in Alabama
How much do solar panels cost in Alabama?
Solar installation in Alabama typically costs $18,000–$30,000 before incentives. After the 30% federal tax credit, most homeowners pay $12,600–$21,000 net.
Is solar worth it in Alabama?
Yes — Alabama homeowners benefit from 4.7 average peak sun hours per day. The 30% federal ITC combined with no state credit; federal 30% itc applies make the financial case strong for most homeowners.
What state incentives are available for solar in Alabama?
No state credit; federal 30% ITC applies. On top of state incentives, all Alabama homeowners qualify for the federal 30% Investment Tax Credit (ITC).
How long is the payback period for solar in Alabama?
Based on Alabama's average electricity rate of $0.137/kWh and 4.7 peak sun hours, most homeowners see payback in 7.9–11 years. Systems then produce free electricity for 15–20+ more years.
Does Alabama have net metering?
Alabama's net metering policy is limited. Check with your local utility for current export compensation rates, as policies vary by provider.