Are Solar Panels Worth It in Alabama?

Questions to ask yourself before going solar

For a lot of homeowners, the biggest considerations are upfront costs and long-term savings. Whether or not solar panels are really worth it also depends on the condition of your roof and how long you plan to stay in your house.

1. How much will it cost upfront?

Average solar panel prices in Alabama range from $14,720 to $29,441. That’s about as expensive as a car. Like buying a car, you can finance or lease solar panels with almost no money down.

System size is a major solar cost factor. A typical Alabama household needs a 5.8 kW system to power their house. You might need a bigger or smaller one. On the high end, Nathan in Jacksonville told us his system cost $47,000.

Average solar panel costs by system size in Alabama

Consider battery storage

With a solar battery, you don’t have to worry about pulling in electricity from the grid at night. It’s worth considering if you expect your utility company to keep raising rates (and it’s essential if you want real energy independence).

The biggest downside to a solar battery is the price. Adding one can increase your total system costs by $7,000 to $18,000.

2. How much will I save over time? ​​

Over 25 years, Alabama residents with solar panels can save an estimated $55,152 on total utility costs. That projected amount could fluctuate based on future electricity demand.

Electricity bills are expensive in Alabama. The recent rate freeze offers some short-term relief, but it won’t last forever. Installing solar panels now could help protect you from future rate hikes, which seem inevitable.

What to know about net metering in Alabama

Net metering lets you get compensated for sending excess solar energy to the grid. It usually involves earning credits toward future energy bills. In some states, homeowners with solar panels can earn enough through net metering that their monthly utility bill hovers around $0.

Alabama homeowners with rooftop solar are paid just a few cents per kWh for the extra power they send back to the grid (about 3 to 5 cents per kWh).

Solar can make sense if your system is sized correctly and viewed as a way to cut utility usage, not as a way to earn money by selling power.

3. Is my house a good candidate for solar panels?

Going solar can be worth it for many homeowners, as long as their house is a good candidate for panel installation. Here’s what to think about before you commit:

• What is the condition of my roof? If you have to replace your roof, do that before you install solar panels. Solar panels are designed to last up to 30 years, so you want your roof to last just as long. Otherwise, it could cost thousands to remove the panels, repair your roof and reinstall them.
• How much sunlight do I get? Solar panels need regular exposure to sunlight to produce the most energy possible. Alabama averages 3.5 to 4 peak sun hours each day. However, lots of shading, like tall trees above your roof, will make your system less effective. 
• What is the size and angle of my roof? Alabama (and the rest of the United States) is in the Northern Hemisphere, so solar panels perform best on south-facing roofs. The worst place to install would be on north-facing roofs, especially if those roofs have a high pitch. For example, if the only place you can install is a north-facing roof with a 30-degree pitch, your costs will likely go up by 30% to 40%.

4. How long will I stay in my house?

It takes years for electric bill savings to offset the initial cost — about 11.27 years on average in Alabama. If you sell your house and move before then, you might not fully realize the financial benefits of your solar investment.

Solar panels last 25 to 30 years.

Solar panels might add 4.1% to your home’s value, but don't get solar panels just because you want to sell your house soon. Consider a home improvement project with a better return on investment, like remodeling the bathroom or kitchen, instead.

For instance, let’s say you spend $25,000 installing solar panels on a $400,000 house. It might sell for $16,400 more in a few years. But, you miss out on $55,152 in total avoided utility costs over 25 years.

5. Am I eligible for any financial incentives?

The federal solar tax credit is gone, and Alabama has few local incentives to help residents embrace renewable energy.

It won’t help offset your upfront costs, but there is a statewide property tax exemption on renewable energy technologies. This means that your property taxes won’t go up if solar panels add value to your home. The 100% exemption is valid until 2028.

What to know about Alabama Power's Clean Energy Select

The Clean Energy Select program lets Alabama Power customers support renewable energy without installing solar panels. Instead of generating your own electricity, you pay a small extra monthly fee so the utility can retire Renewable Energy Certificates (RECs) on your behalf.

These RECs represent renewable energy produced elsewhere (solar farms in Alabama or wind farms in the Midwest) and give you the legal right to claim your electricity use is offset by clean energy.

Clean Energy Select is best viewed as a green energy subscription, not a money-saving program. It allows customers to support renewable energy, but it doesn’t change how much electricity they buy or how much control they have over future rate increases.

Clean Energy Select vs. rooftop solar

Clean Energy Select is nice if you want to support renewables but can’t install solar. Rooftop solar, even with limited incentives in Alabama, is about using less utility power altogether, which is why it can still make financial sense for the right homeowner.

Pros and cons of solar panels in Alabama

It’s a common misconception that solar panels will completely eliminate your monthly power bill — but this is not always the case. Still, you’ll likely pay less than you would for traditional utility bills.

Compare solar companies in Alabama

We’ve heard from several solar customers in Alabama. In the best-case scenario, it’s easy, and you’re happy with your system’s performance. In the worst-case scenario, you end up paying thousands for mid-tier solar equipment from a company with poor customer service and no follow-up or support. Compare our picks for Alabama’s top solar companies to learn more.

Bottom line: Is going solar in Alabama worth it for you?

Given rising energy costs in Alabama and elsewhere, financing solar panels makes sense as long as your monthly loan payment is less than what you would be paying the utility company anyway. Solar panels essentially generate free electricity once the initial installation costs are paid.

Anecdotally, Carrie in Enterprise saved for a while to avoid financing. “We just bought straight cash because we don't like payments. It was expensive but so far we enjoy it and for the money it is a good value because we use it often so can't complain about that,” Carrie wrote in a review on ConsumerAffairs.com.

Solar costs vs. savings: Alabama and nearby states