Cost of solar panels in Alabama (2024)

How much do solar panels cost in Alabama?

With professional installation, a typical 8-kilowatt residential solar panel system in Alabama costs $26,720. That price drops to $18,704 after the full federal solar investment tax credit (ITC). This doesn’t include the cost of a solar storage battery, which sometimes costs as much as the panels. Solar batteries are essential if you want real energy independence and if you plan to go off-grid.

Most installers estimate solar costs based on your system’s wattage. This “cost per watt” is similar to the price per square foot when you buy a house — it helps you compare the value of solar energy systems in different sizes.

The average size of solar systems in Alabama is 11.22 kW (kilowatts). Depending on your household energy usage, you might need a smaller or larger system.

Average solar installation cost by system size in Alabama

Are solar panels worth it in Alabama?

We’ve talked to several solar customers in Alabama. Overall, the feedback is positive — most are happy with their solar panel installations and get a good value with financing. Over 25 years, homeowners with solar panels avoid $65,922 in utility costs on average. If you also have an electric vehicle, solar panels will save you even more.

“We had our first $0 electric bill, which was pretty amazing,” James in Round Rock told us. James is also avoiding power outages. “There were some brownouts in the neighborhood, but we didn't experience any of it because we had our battery. It was a big investment, but since we're looking at this long term, I think it was a wise one.”

Homeowners with solar panels typically save $20,000 to $90,000 over 25 years.

For others, going solar is worth it for the environmental benefits, even if you don’t see much cost savings. “It is a good value, I think because solar energy is better for the environment, so even if it's a little more than what we expected to pay it's still worth it,” Carrie in Leeds told us.

But it doesn't work out for everyone. We suggest using the National Renewable Energy Laboratory's PVWatts Calculator to estimate how much electricity a solar panel can produce over a year on your house — just type in your address. Project Sunroof is a free solar savings estimator powered by Google Earth imagery.

If your house is a good candidate for solar, it’s worth considering in Alabama if you like the idea of lower monthly utility bills and more energy independence.

» STILL NOT SURE? Solar energy pros and cons

Solar panel installation cost factors in Alabama

The equipment — solar panels, inverters, mounting hardware and other electrical accessories — is typically the largest portion of your overall total costs (approximately 25% to 50%). Labor, which includes planning, preparing and connecting your system to the grid, accounts for 10% to 30%. Local permits and fees are a small part of your overall costs.

» BEST STATES FOR SOLAR: Alabama ranked 47th in 2024

Solar panels

Your solar system is made up of panels, batteries, inverters, monitoring systems and more.

Solar panels are typically priced at around $3.34 per watt in Alabama. Here are some average costs you can expect for other equipment:

• Storage batteries: $7,000 to $18,000
• Inverters: $1,000 to $3,000
• Monitoring system: $80 to $400

Condition of your roof 

Quality solar panels should last 25 to 30 years, and your roof needs to last just as long. If you want to ensure a seamless and cost-effective solar journey, your roof must match the system's longevity. It’s best to get your roof inspected, fixed or replaced before you go solar.

ConsumerAffairs often hears from disgruntled solar customers who felt blindsided by expensive roof repairs needed after their solar panel installation was complete. This is a frustrating and expensive process you should avoid if you can.

Labor costs

Solar equipment costs are going down, but labor costs are higher than ever in some areas. Installing solar panels yourself might initially seem cheaper because you'll save on labor costs. However, it's crucial to consider several factors for safety before going the do-it-yourself route. If not installed correctly, solar panels pose safety risks, causing roof leaks and other problems.

Other cost factors

There are a few extra expenses to know about. For example, permits and interconnection fees, though relatively cheap, are worth mentioning. Solar panels require minimal maintenance, but potential repair or replacement of components and periodic cleaning can add to the cost.

» TIPS: Getting the best solar quotes

How to save money on solar panels in Alabama

There’s no way around it — solar panel installations are expensive. Here are some tips to maximize your savings on solar panels in Alabama:

• Compare quotes: Get quotes from at least three or four different solar companies.
• Lower your electrical load: For example, replacing an old refrigerator with a more eco-friendly one reduces your electric load, which also helps lower your utility bill. If you use less electricity, you need fewer solar panels, making the whole system cheaper.
• Use incentives: In addition to government incentives, you might be able to take advantage of manufacturers’ rebates.

» MORE: Why are solar panels so expensive?

Solar incentives, tax credits and rebates in Alabama

The federal solar investment tax credit (ITC) is the best financial incentive for most homeowners going solar in Alabama. The ITC credits 30% of the system’s total cost — including equipment, labor and permits — toward what you owe on federal income taxes.

The ITC drops to 26% in 2033 and 22% in 2034.

Don’t get confused: The ITC is not a rebate or a refund. It is a credit that goes toward what you owe on federal income taxes. For example, if you owe $15,000 in taxes, the credit reduces your debt to $12,000. The ITC only offsets your tax liability; you can't take advantage of it if you don’t owe taxes in the first place.

» EXPLORE: Alabama solar incentives, tax credits & rebates

How can I pay for solar panels in Alabama?

Affordable financing makes the upfront costs of solar more manageable. For instance, most leases let you start saving from day one with little or no money down.

• Loan: A solar loan works like any other type of home improvement loan — there’s an application and approval process, and you pay it back over time (with interest). In an ideal financing scenario, your system generates enough extra power to pay off the loan.
• Lease: Leasing solar panels is a great way to set up a system without the high upfront costs. A potential downside is that you are not eligible for the same tax incentives.
• Home equity: Using a home equity line of credit or loan to finance a solar installation can be a financially beneficial option — home equity interest rates are relatively low, and homeowners can still take advantage of the federal solar investment tax credit.

» SOLAR PANELS: Lease vs. buy

Compare solar installation companies in Alabama

We compared ratings and reviews, equipment options, warranties, availability and other factors to pick the top solar companies in Alabama.

Bottom line

The ConsumerAffairs Research Team has conducted extensive research to compare the costs of going solar in Alabama and other states. Alabama homeowners with solar panels can typically save more than that in total avoided energy costs over the lifetime of a system.

Solar costs vs. savings: Alabama and nearby states