Solar in Alabama
Alabama is only beginning to tap into its solar potential, with our connection to a clean energy future only getting stronger. As one of the sunniest states in the nation, Alabama has the natural resources to make solar a meaningful part of its energy future. Today, less than 1% of our state’s electricity comes from solar and less than 800 Alabamians are employed in the solar industry. While Alabama currently ranks 39th nationally for solar capacity (43rd in 2024), the growth of solar presents both an environmental opportunity and a money-saving option for families and businesses across the state.
Who is your utility supplier?
Across the state of Alabama, there are a few different power suppliers that work regionally, based on where you’re located. Because each utility company has different rules, rates, and solar programs, it’s important to know who provides your power!
Alabama Power Company
The largest supplier of electricity across the state is Alabama Power Company, supplying more than 1.5 million Alabamians with power. Alabama Power is the only investor-owned utility company in the state and is regulated by the Alabama Public Service Commission.
Though Alabama Power offers minimal rate programs for solar installations, the Company does offer financing options for individuals who install energy efficient smart tools. This includes rebates (and even cash incentives!) for the installation of smart thermostats, heat-pump water heaters, High SEER heat pumps, EV GridWise+ managed charging, and more. These tools will support your home’s transition to clean energy (and could lower your monthly power bill).
Tennessee Valley Authority
Across northern counties of Alabama, the Tennessee Valley Authority (TVA) is often responsible for supplying power to consumers. TVA is a wholesale supplier of power, meaning they manage lines and/or generate power that is sold directly to electric cooperatives or municipal utilities, who then sell that power back to local residents.
While TVA doesn’t sell power directly to consumers, it still offers several programs and incentives that promote energy efficiency and renewable energy adoption- often made available through your local utility provider. The Dispersed Power Production program, for example, is TVA’s program for residential and commercial customers who want to install renewable generation systems. This program, which includes consumers who install solar onto their property, get paid for every kWh generated by their system by selling all or excess generation back to TVA.
Electrical Cooperatives, “Co-ops”
In more rural areas, electric cooperatives, or “co-ops”, are responsible for providing electricity to consumers. Cooperatives purchase power from larger generation and transmission companies, like TVA or PowerSouth, then distribute this power to their members. There are electric cooperatives all across the state, especially in rural areas in North and South Alabama.
With electrical cooperatives, most rebates and incentives are focused on the installation of energy efficient home upgrades, rather than incentives based on solar installation. Notably, electric cooperatives offer incentives on behalf of power suppliers, like TVA. If you’re interested in TVA incentives, or you’re looking for more information on rebates and incentives from your local cooperative, it’s always best to contact your utility supplier for more information on available programs.
Municipal utilities, like electrical cooperatives, are managed and regulated by the local government, typically the city council or a utility board. These are non-profit, community-owned utility providers. There are currently six that operate in Northern Alabama, all with rates >25-27% lower than Alabama Power. Like cooperatives, municipal utilities usually pass along and offer rebates/incentive programs on behalf of power suppliers, like TVA. If you are looking for information on rebates and incentives from your municipal utility provider, be sure to contact them.
In Alabama, several utility providers offer programs that add extra charges to customers’ bills to fund renewable energy projects. While these programs promise access to cleaner power, they ask consumers to pay for energy that utilities should be already providing as part of their standard service. These programs, like the Clean Energy Select program from Alabama Power, the Green Switch program offered by Tennessee Valley Authority (TVA), and the Green Power Choice program from Wiregrass Electric Cooperative, shift costs of renewable energy projects onto consumers, allowing providers to claim a commitment to clean energy while avoiding substantial investment in renewable energy. We encourage customers to remain informed about these programs and advocate for changes that make renewable energy a standard offering from utility providers.
Is solar a good fit for your property?
Solar utilization comes in many forms, meaning you can make an impact in a way that’s compatible with your lifestyle. Whether you live in the city, suburbs, or a more rural area, chances are you can benefit from installing solar energy! Solar panels, which collect sunlight and convert it into electricity, can be a great way to offset power usage (and costs!) during the day.
Roof orientation, shading, roof age, and roof quality are important factors, as solar panels (especially rooftop systems) require lots of sunlight- with south, east, and west-facing roofs being most effective. If roof space is a cause of concern for your property, ground-mounted panels could be a better option. Combining solar with batteries help store excess energy for utilization at night or during power outages, and can be used to offset power costs during energy-intensive seasons. Utilizing a combination of solar panels and battery storage is a great option for energy independence and peace of mind!
Do you have any local rules regarding solar?
There are currently no state-wide bans or local restrictions on solar usage/installation in Alabama. Your local municipality may have specific guidelines and you should always call your city to find more information. Most cities post their ordinances and codes to the internet and you can search electronically! If you have one, we also strongly recommend checking your homeowner’s association (HOA) for any rules and regulations on residential solar installations, as some Associations across the state do have some restrictions.
Who can install your solar system?
Any licensed solar installer can work with you to explore options. Generac serves counties across Alabama to provide a multitude of solar and battery solutions to consumers. There are also plenty of local installers to choose from but you should do your own researching and vetting. Energy Alabama does not vouch for any particular company and we are not funded by the companies listed below:
- North Alabama Solar in North Alabama
- Montgomery Solar Solutions in Montgomery
- Integrity Energy Group in the Mobile Bay area
- Solar Supply in Dothan and Daphne
Contact solar installers in your area for more information on your options! You can often get a free consultation through a local solar installer!
What financial incentives can help you with the cost of going solar?
There are a few financial incentives available you can utilize when going solar! Currently, homeowners who install eligible solar panel systems before December 31, 2025 are eligible for the Inflation Reduction Act’s tax credits, where you could receive a 30% federal tax credit on solar and battery installations.
The state of Alabama, using the state solar property tax exemption, encourages homeowners to utilize solar on their properties through state tax exemptions. If you install eligible solar on your property and fill out the proper paperwork with your local government, you could avoid paying property taxes on the value added by your solar panels for up to 20 years! Always check with your accountant or a tax professional for advice when needed.
With that, you might’ve heard of solar power “buyback programs,” which work as a way for solar customers to sell their extra energy back to their power company, resulting in cheaper monthly bills! All utility providers are required by federal law to connect your solar panels to the grid and to compensate you for your energy. However, most utilities in Alabama offer poor buyback programs. You will want to check options with your provider to see what they offer.
There are some websites that offer information on rebates across the state of Alabama, as well as information on who offers them and who qualifies! Be sure to research available options in your area for available incentives and rebates.
If your utility offers a poor rate for your solar, you’ll want to consider batteries or engineering your system to minimize or eliminate how much is sold back to the utility, in order to maximize your financial gain. You may also consider advocating for better rates from your electric provider!