Cost of solar panels in Alaska (2024)

How much do solar panels cost in Alaska?

With professional installation, a typical 8-kilowatt residential solar panel system in Alaska costs $19,280. That price drops to $13,496 after the full federal solar investment tax credit (ITC).

The size of your solar panel system is a big factor in your overall solar costs. The average size of a solar system in Alaska is 9.58 kW (kilowatts). Depending on your household energy usage, you might need a smaller or larger system. With a simple formula, you can see what size is right for you: Find the electricity you used in the last year in kilowatt-hours (kWh). This information is in your electric bill's online dashboard. Then, divide your annual kWh by 1,200 to find the necessary system size.

Average solar panel installation cost by system size in Alaska

Are solar panels worth it in Alaska?

Despite the long, dark winters, there’s enough sunlight for solar panels to generate plenty of energy in much of Alaska. Homeowners can save a lot over time, thanks to the state’s high electricity costs. Over 25 years, homeowners with solar panels avoid $54,668 in utility costs on average. For others, the environmental benefits alone are enough to make going solar worth it in Alaska.

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

Seasonal variation is still a potential disadvantage. Solar production can vary significantly throughout the year due to the changing seasons. This means you might rely more on the grid or storage batteries during these periods. Solar batteries add to the overall cost of the solar system, potentially doubling the total cost. Solar batteries are a must if you want real energy independence and essential if you go off-grid.

The most densely populated area of the state, Southeast Alaska, is seeing more solar panels on rooftops as residents observe that already-high grid electricity prices are likely to go even higher.

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 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 Alaska

How much your solar system costs depends on the size of your system, the quality of your panels, the company you choose to go with, permit costs, the condition of your roof and more. Here are some things to consider.

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: Alaska ranked 23rd in 2024

Solar panels

Most of your solar equipment costs come down to how much you pay for solar panels. You’ll hear installers talk about how “efficient” their panels are.

Solar panel efficiency is a measure of how well a panel makes electricity. The more efficient the solar panels you buy, the fewer panels you need. While more efficient panels cost a little more, you save by buying fewer panels.

In general, monocrystalline panels are considered the best bang for your buck. Cheaper solar panels are typically polycrystalline. The difference comes down to efficiency and materials: Monocrystalline panels are made from pure, single silicon crystals; various silicon fragments melted together are used to make polycrystalline panels.

Additional solar equipment costs

Solar arrays also contain mounting equipment, wiring and other devices, such as inverters, batteries or a monitoring system.

• Solar batteries: A battery stores energy for later use. It’s a must if you want real energy independence, and they sometimes cost as much as the panels. Prices often depend on the battery’s storage capacity, life span, brand and other factors. Expect to pay between $7,000 and $18,000, though some cost $30,000 or more.
• Solar inverter: Inverters convert the electricity generated by your solar panels from direct current (DC) to alternating current (AC). Inverter costs usually range from $1,000 to $3,000.
• Monitoring system: Some companies include a solar monitoring system to track how much energy your system produces and if there are any problems. If not, you can buy a stand-alone system for $80 to $400.

Condition of your roof

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

Solar panels should last 25 to 30 years, so your roof needs to last just as long. Otherwise, you’ll pay even more money to remove the panels, fix your roof and reinstall them. Avoid the extra costs and frustrations by having your roof ready for solar.

» SHOULD YOU: Replace your roof before going solar?

Other cost factors

Various other costs can add to the price of your solar energy system:

• Labor: 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 DIY route. If not installed correctly, solar panels pose safety risks, causing roof leaks and other problems.
• Permits: Most towns require permits before you can install solar panels. These costs can be low in some towns and reach hundreds of dollars in others.
• Maintenance: There’s not much maintenance for solar panels. You may run into some added costs for potential repair and periodic cleaning, though.

» GREENEST STATES: Alaska ranked 30th in 2024

How to save money on solar panels in Alaska

You can lease a system with lower upfront costs. However, you won’t be eligible for the federal tax credit. Here are some other tips to maximize your savings on solar panels in Alaska:

• Compare quotes: Get quotes from at least three or four different solar companies in Alaska. This lets you compare different proposed equipment, pricing, financing terms and estimated energy production to find the best overall value. Don't just go with the cheapest option without vetting the company first.
• Lower your electrical load: Before going solar, it’s smart to upgrade any old appliances. 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: Some solar panel manufacturers offer rebates on their products. While these may not be specific to Alaska, they can still provide additional savings. You can inquire with your installer about any available manufacturer rebates.

» MORE: Why are solar panels so expensive?

Solar incentives, tax credits and rebates in Alaska

The federal solar investment tax credit (ITC) is the best financial incentive for going solar in Alaska. 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.

For example, if you spend $10,000 installing a solar panel system, the ITC is worth $3,000. 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.

Additional solar incentives in Alaska include a property tax exemption for home renewable power systems, like solar, from property taxes. However, the terms are locally determined.

How can I pay for solar panels in Alaska?

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) each month. In an ideal financing scenario, your system generates enough extra power to pay off the loan. Solar loan terms typically last eight to 20 years.
• 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 Alaska

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

Bottom line

Residential solar panel system costs typically fall between $10,000 and $30,000 or higher, depending on factors like the system's size, local labor rates and available incentives. Alaska homeowners with solar panels can typically save more than that in total avoided energy costs over the lifetime of a system.