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Utilities · Solar in Alabama

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.

3.5¢ (est.)Credit per kWh exported
Reduced credit (net billing)How exports are credited
16.1¢Average price of power in Alabama (2025)
$5.41/kWMonthly solar charge, about $49 a month for a 9 kW system

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 savingsPayback25-year savings, after the price
With Alabama Power's credit and monthly charge$466over 25 years−$12,128
If every exported kWh earned the full price, with no solar charge$1,98011 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.

Check a quote for AlabamaRun your own payback

Utilities in neighboring states

UtilityStateExported powerCredit
Alabama PowerAlabamaReduced credit (net billing)3.5¢ (est.)
Florida Power & Light (FPL)FloridaFull credit (net metering)Full retail
Duke Energy FloridaFloridaFull credit (net metering)Full retail
Tampa Electric (TECO)FloridaFull credit (net metering)Full retail
Georgia PowerGeorgiaReduced 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.