Alabama is one of the sunniest states in the US, making it a prime location for solar energy. But what are the benefits of solar power in Alabama? How does solar compare to other forms of energy production in the state? This article will explore those questions and more.
Is Solar Worth It in Alabama? – the Basics
In Alabama, as in most parts of the US, the cost of electricity is high. This creates a good opportunity for homes and businesses to invest in solar power – but only if it makes financial sense.
The decision to purchase a solar power system is a big one – with payback periods ranging from 5-20 years depending on your location and the size of the system you choose – so before you make a purchase, it’s important to understand whether going solar is worth it in Alabama.
Where You Live Can Make a Big Difference
When deciding whether or not to go solar in Alabama, one of the first things to consider is what part of the state you live in. The National Renewable Energy Laboratory (NREL) evaluated how much power solar panels in each state can generate and found that Alabama’s southern and central regions offer some of the best conditions for homeowners and businesses to go solar.
In those areas, a typical 5kW system will generate from 5-8 kWh per day – compared with just 3 kWh/day in the northern part of the state.
Solar System Size Matters
The NREL data also provides insight into how much you can expect to save with a solar panel system in Alabama. If you live in Birmingham, for example, you can generate about 7 kWh/day on average, which is enough to offset all the energy used by an average home.
That’s an encouraging figure, but one thing to keep in mind is that you need your system to be large enough to generate more electricity than you use, or “net-positive.” If it isn’t, then you won’t save any money because Alabama gets most of its electricity from coal and natural gas power plants that emit greenhouse gases into the atmosphere.
The size of the system you need will depend on your budget and how much electricity you use, but generally speaking, it’s best to start with a 5kW-7kW solar panel array. That should be enough to power an average house, offset most of your monthly energy costs, and make you eligible for Alabama’s solar tax credit.
Alabama solar incentives & tax credits
Alabama, like most US states, offers a variety of incentives to encourage solar panel installations. In this case, then is a tax credit that will refund up to 25% of your system’s cost – once you’ve received the rebate from the state government, you can apply it toward your federal taxes if they’re due.
In order to qualify for the credit, your system needs to meet certain requirements:
Your installation provider must be certified by the Alabama Solar Energy Commission Your system’s electrical inverter must have a UL certification Your solar installer should be registered in Alabama The PV module efficiency of your solar panels should be at least 16%
What about net metering?
In most states, utilities are required to provide net metering to solar panel owners. That means they’ll buy back excess electricity generated by your system at the same rate you pay for grid power.
Net metering allows homeowners and businesses who generate their own energy with solar panels to get credit for all of the surplus energy they send into the grid.
Alabama does not have a net metering law. Instead, your solar installer should be able to sell the power you produce directly to your utility provider at market rates.
Large vs. Small Solar Panel Systems in Alabama
Before you decide on a system size for your home or business, there are three things that you need to consider: how much electricity you use, the amount of money you want to save, and whether or not you’re willing to take on the responsibility of maintaining your system.
The largest solar panel systems that Alabama Power Company will typically approve for net-metering are around 20 kW, so an average home can expect to install about 10 panels ranging between 260W-270W each. That’s more than enough to offset most homes’ electricity needs, but you’ll want to consider adding batteries if your system size is less than 5kW.
Ultimately, net-metering will save you the most money – and makes solar panels the best option – for homeowners who use a lot of electricity and live in areas where generating excess power isn’t an issue.
If you’re looking to go solar without having to worry about maintaining your system, then it’s best to consider getting one that’s just slightly larger than the minimum size needed to power your home or business.
Average cost of solar panel installation in Alabama by system size
Installing a large solar panel system will save you the most money over time, but if your budget is smaller, here’s how much you can expect to pay for different system sizes:
- 5kW – $17,700 installed ($3.40/watt)
- 10kW – $26,000 installed ($2.60/watt)
- 15kW – $34,500 installed ($2.60/watt)
- 20kW – $43,000 installed ($2.51/watt)
- 25kW – $50,400 installed ($2.39/watt)
- 30kW – $57,900 installed ($2.28/watt)
FAQ
Is it better to lease or buy solar panels in Alabama
If you have the money to spend on a system, or are confident that your income will increase in the near future so that you’ll be able to afford one, it’s best to buy your solar panels outright. That way you can take advantage of all available incentives and tax credits – which may not be offered again.
If leasing is your only option, be sure to read the fine print carefully. Some companies have you sign an inflated 20-year contract that includes monthly maintenance fees and a clause that prevents you from selling power back to your utility provider.
How long do solar panels last?
Solar panels typically last 25 to 40 years.
“Federal tax credits for solar power were extended in late 2015 as part of a spending bill that will run until December 2017 and provide 30% of the cost of a system.” – Birmingham Business Journal
How do solar panels work on a home?
By generating their own electricity, solar panels work in two ways: they either offset the use of grid power or prevent it altogether.
Net metering is necessary for homes and businesses that generate most of their own energy with solar panels to be able to get credit for all of the surplus energy they send into the grid. This ensures that you’re getting the full retail rate for all of the energy you produce.
Do solar panels require regular maintenance?
Yes. The inverters that convert the DC power produced by solar panels into AC current for your home will need to be serviced every 5-10 years. If you’re leasing, maintenance fees are typically included in the monthly cost of your lease.
Will residential solar power system cost fall in Alabama in 2022?
Yes. According to a report by the International Renewable Energy Agency, the cost of installing a solar power system will fall by between 26% and 59% in Alabama by 2022 – compared with 2010 prices.
Conclusion
Solar energy is becoming more and more popular each year, and with good reason. Not only does it help reduce your reliance on the grid, but it also offers a number of financial incentives that can save you money in the long run.
If you’re thinking about going solar in Alabama, be sure to consider all of your options – including leasing – and research the best deals available. With prices dropping every day, now is definitely the time to make the switch to solar!