Cost of solar panels in Alabama

How much is it to go solar in 2024?

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technician checking solar panel on the rooftop of a home in alabama

The average cost to install solar panels is $28,176 in Alabama before you use the full federal solar investment tax credit (ITC). The price drops to $19,723 after the ITC.

Going solar in the Heart of Dixie is about 18% more expensive than the national average. The out-of-pocket investment is higher than in other states, but Alabama offers ways to lower the overall costs through state incentives.


Key insights

  • On average, solar panels take 10 years to pay for themselves in Alabama (if you pay for your system upfront).
  • The average cost per watt is $2.45 in Alabama.
  • Alabama homeowners with solar panels average an estimated net savings of $28,590 over 25 years.

How much do solar panels cost in Alabama?

Installing residential solar panels can cost between $10,000 and $30,000 or more, with individual costs varying. On average, residents of Alabama pay $28,176 before using tax credits or incentives for their system.

Your system's size greatly affects how much you pay overall. Not surprisingly, the smaller your system, the less you pay. The average size of solar systems in Alabama is 11.5 kW (kilowatts).

Average cost by system size in Alabama

Source: EcoWatch

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.

“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.”

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 said.

It was a big investment but since we're looking at this long term, I think it was a wise one. ”
— James in Round Rock

On average, it takes solar panels about 10 years to pay for themselves in Alabama. Homeowners who go solar in Alabama get an average estimated net savings of $28,590 over 25 years.

» STILL NOT SURE? Solar pros and cons

Cost factors of going solar in Alabama

The cost of solar depends on various elements, from the equipment you select to the permits required. Be mindful of unforeseen expenses such as roof repairs and ongoing maintenance. These can contribute to the overall total.

Solar equipment costs

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

Solar panels are typically priced at around $2.45 per watt in Alabama. Here are some average costs you can expect for other equipment:

Size of your system

Your solar system’s potential power output has a significant effect on the total cost. You can easily determine what size system you need: First, find out the amount of electricity you used in the last year in kilowatt-hours (kWh). You can find this information through your electric company’s online account dashboard.

Then divide your annual kWh by 1,200 to find the necessary system size. For example, the typical Alabama household uses 13,680 kWh per year. Using this formula, the typical household would need a system of around 11 kW.

» WATT’S THE DIFFERENCE? kW vs. kWh

Condition of your roof

Your roof can add to the costs of your solar system in more ways than one. You need to get your roof inspected, which is an added cost. If your roof needs to be repaired or replaced, that will cost extra, too.

Quality solar panels should last 25 to 30 years, and your roof needs to be in good shape to hold your panels. If not, you have to pay to remove the panels, fix your roof and reinstall them again.

» SHOULD YOU: Replace your roof before going solar?

How you pay

Cash is the easiest way to pay. There’s no interest, and you’ll own your system right away. There are various options to help you pay for solar if you can’t pay upfront with cash, though. Solar loans are available to finance solar panels. You could get a solar equipment lease instead if you need an option with a lower upfront cost.

» SOLAR PANELS: Lease vs. buy

Other cost factors

There are a few extra expenses to know about. For example, solar panels require minimal maintenance, but potential repair or replacement of components and periodic cleaning can add to the cost.

Permits can add a substantial amount to your bill. Solar permits can cost hundreds of dollars. You may be exempt from permits if you live outside of the city limits, though.

» TIPS: Getting the best solar quotes

Solar incentives, tax credits and rebates in Alabama

The federal solar investment tax credit (ITC) is the biggest factor in reducing the cost of going solar in Alabama. If you install a residential solar panel system by the end of 2032, you will receive a federal income tax credit equal to 30% of the system's total cost, including equipment, labor and permits.

The credit drops to 26% in 2033 and 22% in 2034. Alabama also offers a property tax abatement for up to 20 years on properties that have solar. 

» EXPLORE: Alabama solar incentives

Compare solar installation companies in Alabama

Compare popular solar companies available in Alabama below. Read our guide to finding the best solar companies for more.

Do you own or rent?

FAQ

How are solar costs trending in Alabama?

The cost to go solar in Alabama has fallen 42% over the last 10 years, according to the Solar Energy Industries Association.

Can I get free solar panels in Alabama?

There is no program that we know of to get free solar panels in Alabama. You can lease solar equipment, often with a minimal upfront cost, but it isn’t free. Solar leases generally require a flat monthly fee.

» FREE SOLAR PANELS: Are they really free?

How much can I save with solar panels?

When you pay cash, the average 25-year savings with solar is $28,590 in Alabama. While it’s a common idea that you can always completely eliminate your monthly electric bill with solar panels, this isn’t always the case. However, people who still have a bill after going solar typically pay significantly less than before.

» EXPLORE: Where solar savings go the furthest

How does net metering work in Alabama?

You have the option to sell excess electricity to your local electric company through a process known as net metering. In Alabama, there are no official net metering policies in place, so there’s no legal obligation for Alabama's electric companies to provide net metering options. Despite this, your local electric company might still offer net metering services.

» COMPARE: Best solar monitoring systems

Is it cheaper to install solar panels myself?

It’s potentially cheaper but also difficult and dangerous if you don’t know what you’re doing. This is especially true for a large residential solar project.

» DIY solar panels: Pros and cons

Bottom line

In Alabama, you can expect to pay, on average, around $28,176 for your solar energy system. The full ITC is good for $8,453 of that, and you may be able to find local government energy loan programs or property tax exemptions for going solar.

» GUIDE: Solar panel installation 

Solar costs: Alabama vs. nearby states

*Before the federal investment tax credit (ITC); **When you pay in full upfront

Article sources
ConsumerAffairs writers primarily rely on government data, industry experts and original research from other reputable publications to inform their work. Specific sources for this article include:
  1. EcoWatch, “ How Much Do Solar Panels Cost in Alabama?” Accessed Nov. 9, 2023.
  2. Office of Energy Efficiency & Renewable Energy, “Homeowner’s Guide to the Federal Tax Credit for Solar Photovoltaics.” Accessed Nov. 9, 2023.
  3. Solar Energy Industries Association, “Alabama Solar.” Accessed Nov. 9, 2023.
  4. DSIRE, “Alabama Solar Programs.” Accessed Nov. 9, 2023.
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