Solar by state › Alabama

Home solar in Alabama

Alabama has no net metering, and Alabama Power adds a $5.41 per kW monthly fee for home solar (about $39 a month for a 7.2 kW system); a federal judge upheld the fee in March 2026.

Facts checked 2026-11-01, each with a source link below. Programs change often: confirm with your utility, installer and a tax professional before you sign.

16.3¢average home price per kWh (EIA, August 2026)

Harder case for solarNo net metering, one of the highest solar fees in the U.S., exports credited only at avoided cost, and no state rebate, tax credit or solar tax exemption found. Batteries or a no-export setup may make more sense.

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Net metering No statewide net metering

Alabama has no net metering law or rule. Alabama Power credits power you send to the grid only at its avoided cost (what it would cost the utility to make that power), which is far below retail. Home solar customers must take Rider RGB, which adds a Capacity Reservation Charge of $5.41 per kW of panel nameplate each month; instead of the fee you may choose time-of-use Rate RTA, where summer weekday power from 3 to 5 pm costs 71 cents/kWh. TVA-area utilities in north Alabama and co-ops set their own rules. Source

2013: PSC approves the current solar capacity charge method
2020-09: PSC raises the charge from $5.00 to $5.41/kW
2022-04: current Rider RGB (7th revision) in effect
2026-03: federal court upholds the fee

Solar credits (SRECs) No market

Alabama has no renewable portfolio standard and no SREC market.

Rebates and incentives

We found no statewide solar rebate or tax credit open in Alabama right now. Your utility, city or county may still offer one, so ask your installer.

Taxes

Property tax: None found: no state property tax exemption for home solar.
Sales tax: None found: no sales tax exemption for home solar.

Solar laws

Alabama Power Rate Rider RGB (PSC Informal Docket U-4226, order Nov. 5, 2021) (2021). Charges home solar owners $5.41/kW (secondary service) per month on panel nameplate, or lets them take time-of-use Rate RTA with a 71-cent summer peak price instead. Source
Federal court ruling on the solar fee (2026). U.S. District Judge Annemarie Carney Axon granted summary judgment to the PSC and Alabama Power, dismissing a PURPA challenge to the fee. The SELC said it was weighing its options. Source

Community solar

No state community solar program found.

Timeline

2013 PSC approves Alabama Power's solar capacity reservation charge method
2020-09 PSC raises the charge to $5.41/kW
2022-04 Rider RGB 7th revision takes effect (April 2022 bills)
2025-12-31 Federal 30% homeowner tax credit (25D) ends
2026-03 Federal judge upholds the fee

Federal tax credits

The 30% federal tax credit for homeowners who buy solar (Section 25D) ended for systems placed in service after December 31, 2025, so buying no longer earns a federal credit. If you lease or sign a power purchase agreement (PPA), the panels belong to a company that may still claim a business credit under federal deadlines that tighten through 2027. Ask your installer whether that savings is in your price.

Sources

Last checked 2026-11-01. Incentives are not guaranteed and can change or run out. Confirm every figure with your utility, installer and a tax professional before you sign. This page is general information, not tax, legal or financial advice.

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