Alabama Power: how it credits the solar power you send to the grid
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.
Checked November 12, 2026. Utilities change these rules; check the current tariff before you sign.
How it works
Alabama Power credits exports at its avoided cost, which it doesn't publish as a single number; we assume about 3.5 cents. That estimate is about 22% of Alabama's average electricity price.
The capacity reservation charge has been in place since 2013 and has survived challenges at the Alabama PSC, FERC and, in March 2026, a federal court.
The charge is based on system size, not on what you export, so it applies even to a small system that never sends power out.
Fixed solar charge. Capacity reservation charge: $5.41 per kW each month. Solar credits can't pay it.
Tip: A smaller system sized to your daytime use keeps the monthly charge down.
What it means for a typical Alabama home
An average Alabama home uses about 13,740 kWh a year. A 9 kW system costs about $23,130 at the 2026 median price and makes about 12,303 kWh in its first year, of which we assume about 7,382 kWh goes out to the grid because no one is home to use it.
| First-year savings | Payback | 25-year savings, after the price | |
|---|---|---|---|
| With Alabama Power's credit and monthly charge | $466 | over 25 years | −$12,128 |
| If every exported kWh earned the full price, with no solar charge | $1,980 | 11 years | $37,550 |
The difference, about $49,678 over 25 years, is what Alabama Power's rules cost a typical system compared with full net metering. Using more of the power at home, while the sun is up, closes some of that gap. Uses Alabama's average electricity price; Alabama Power's own prices may be higher or lower. Paid in cash, no federal credit, prices rising 2.5% a year, one inverter replacement.
Utilities in neighboring states
| Utility | State | Exported power | Credit |
|---|---|---|---|
| Alabama Power | Alabama | Reduced credit (net billing) | 3.5¢ (est.) |
| Florida Power & Light (FPL) | Florida | Full credit (net metering) | Full retail |
| Duke Energy Florida | Florida | Full credit (net metering) | Full retail |
| Tampa Electric (TECO) | Florida | Full credit (net metering) | Full retail |
| Georgia Power | Georgia | Reduced credit (net billing) | 7.22¢ |
All 55 utilities · Solar in Alabama · Lease and PPA terms by company
Sources: Canary Media: Alabama Power can keep charging its rooftop solar fee (2026); Southern Science: Alabama Power's capacity reservation charge; 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); EnergySage: median quoted price, first half of 2026.