Solar in Alabama: is it worth it in 2026?
Alabama is one of the hardest states to make solar pay for itself. Three things decide that: electricity prices rank 20th of 51, its sun ranks 26th, and there's no statewide rule for paying you for exported power. Of the 51 states and DC, Alabama has the 44th-fastest payback for a typical home.
The average home here pays about $184 a month for 1,145 kWh. A 9 kW system sized for that home would knock about $1,089 off the first year's bills, 49% of the total.
Checked November 12, 2026
What makes solar pay off in Alabama
- Size the system to what you use during the day, not to your whole year: extra power sent to the grid earns little. A battery, or running the dishwasher, laundry and EV charging while the sun is up, raises the value of every panel.
- The price per watt decides it. At 16.1¢ per kWh, the price per watt matters as much as the sun. At $3.34 per watt, the high end of what companies quote, payback for a typical system here stretches to 24 years.
Payback by system size
An average Alabama home uses about 13,740 kWh a year. Here's how systems sized to cover part or all of that work out, bought with cash at $2.57 per watt:
| Covers | Size | Price | Makes a year | Payback | 25-year savings |
|---|---|---|---|---|---|
| 50% | 5 kW | $12,850 | 6,835 kWh | 21 years | $3,869 |
| 75% | 7.5 kW | $19,275 | 10,253 kWh | 20 years | $7,115 |
| 99% | 10 kW | $25,700 | 13,670 kWh | 20 years | $10,362 |
| 124% | 12.5 kW | $32,125 | 17,088 kWh | 21 years | $9,886 |
The 7.5 kW system pays back fastest, but the 10 kW system saves the most over 25 years, though only if the extra power is used at home. Assumes exported power earns about 25% of the retail rate, prices rise 2.5% a year and one inverter replacement.
How Alabama credits power you send to the grid
No statewide rule
Little or no statewide net metering. Ask your utility what it pays for exported power.
We haven't found a single published export rate for Alabama, so the calculators assume about 25% of the retail rate. Ask your utility for its rate and enter it.
By utility
- Alabama Power: No net metering: exported power earns only Alabama Power's avoided cost, and solar homes pay a capacity reservation charge of $5.41 per kW of system size each month, about $39 a month for a 7.2 kW system.
Before you sign in Alabama
Check the license. Look the company up with the Alabama Licensing Board for General Contractors, by its legal name or license number, and ask for the electrician's license number too.
Alabama has no solar-specific sales law that we know of, so its general consumer protection law applies.
In every state, the FTC Cooling-Off Rule lets you cancel a contract signed at your home until midnight of the third business day.
How to choose a solar company · Contract checklist · Before you sign
Alabama compared with its neighbors
| State | Electricity | kWh per kW | Typical payback | Exported power |
|---|---|---|---|---|
| Alabama | 16.1¢ | 1,367 | 20 years | No statewide rule |
| Florida | 15.2¢ | 1,455 | 11 years | Full credit (net metering) |
| Georgia | 14.7¢ | 1,420 | 17 years | Reduced credit (net billing) |
| Mississippi | 14.0¢ | 1,414 | 19 years | Reduced credit (net billing) |
| Tennessee | 13.2¢ | 1,338 | 24 years | No statewide rule |
Questions about solar in Alabama
How long does solar take to pay for itself in Alabama?
About 20 years for a typical 9 kW system bought with cash at the 2026 median price of $2.57 per watt, with no federal tax credit and one inverter replacement. A bigger or smaller system, a different price, or your own usage will change that; the table above shows other sizes.
Does Alabama have net metering?
No statewide rule. Little or no statewide net metering. Ask your utility what it pays for exported power.
Is there a solar tax credit in Alabama in 2026?
Not from the federal government for buyers: the 30% homeowner credit ended for systems installed after December 31, 2025. For a typical 9 kW system in Alabama, that credit was worth about $6,939 and brought payback down to 16 years, instead of 20 years now. Leasing companies can still claim a business credit, so ask for a lease or PPA price too. Your state energy office lists any state rebates.
Is a solar battery worth it in Alabama?
On bill savings alone, not quite: a 13.5 kWh battery at about $15,650 would move about 3,548 kWh of solar power a year from the grid to your evenings in a typical Alabama home, adding about $6,383 of savings over 15 years. That doesn't cover its price, so the system's payback goes from 20 years to over 25 years; the rest is paying for backup during outages. Time-of-use rates, battery rebates and utility payments for sharing your battery can tip it; try your numbers in the payback calculator.
Is plug-in solar legal in Alabama?
There's no plug-in solar law yet in Alabama, so your utility may treat a kit like any rooftop system.
How do I check a solar company's license in Alabama?
Look the company up with the Alabama Licensing Board for General Contractors (albgc.org) by its legal name or license number, and ask for the electrician's license too.
More guides: What changed for solar in 2026 · Lease or buy? · Plug-in solar · Is my solar system working?
Sources: U.S. Energy Information Administration (EIA), final 2025 data: Annual State Historical Spreadsheets (Form EIA-861, released October 7, 2026) and Electric Power Annual (October 21, 2026); NREL PVWatts (National Solar Radiation Database), statewide averages; SolarReviews: Net metering in 2026; Canary Media: Alabama Power can keep charging its rooftop solar fee (2026); Southern Science: Alabama Power's capacity reservation charge; EnergySage: median quoted price, first half of 2026.