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Solar incentives · Alabama · 2026
Solar rebates in Alabama.
The federal, state, and utility solar incentives available in Alabama for 2026, then matched to a vetted local installer.
Programs · Alabama
6
active programs & rules in 2026
No net metering; avoided-cost buyback plus a capacity charge · verified 2026-09-01
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The full list
6 programs available right now in Alabama.
Tax credit
#01
Federal Residential Clean Energy Credit (Section 25D) - ENDED
The 30 percent federal Residential Clean Energy Credit under Section 25D expired for property placed in service after December 31, 2025. Cash and loan purchases made now receive no federal tax credit, and Alabama has no state solar tax credit to fall back on.
Source ↗ Tax credit
#02
Federal Commercial ITC (Section 48E) - via Lease / PPA
Section 48E, the commercial Clean Electricity Investment Credit, survives at 30 percent and is available to third-party owners of residential systems under leases and power purchase agreements. The provider claims it and may reflect part of the value in the rate offered. Ask what they claim and what actually reaches you, and confirm with a tax advisor.
Source ↗ Program
#03
Alabama Power Capacity Reservation Charge (Rider RGB)
Alabama Power charges customers who generate their own electricity a monthly Capacity Reservation Charge of $5.41 per kW of installed capacity, often called a solar fee and among the highest in the nation. On a 7.2 kW system that is roughly $39 per month, close to $470 a year, levied regardless of how much electricity the customer consumes or exports. It is charged on the basis of the maximum power a solar customer might need from the grid if their system failed. A federal district court ruled in March 2026 that Alabama Power may continue to charge it. Any Alabama Power quote that does not show this as an explicit annual cost is incomplete.
Net metering
#04
Excess generation bought at avoided cost, not retail
Alabama does not offer retail-rate net metering. Excess generation exported to the grid is bought at roughly 3 to 5 cents per kWh against an Alabama Power retail rate closer to 16 cents, so an exported kilowatt hour is worth a small fraction of one consumed on site. Combined with the Capacity Reservation Charge, that makes self-consumption and correct sizing the two decisions that matter most.
Utility
#05
Northern Alabama is TVA territory, not Alabama Power
Huntsville, Decatur, Florence and Athens sit in TVA territory, where TVA generates wholesale power and local distributors such as Huntsville Utilities and Decatur Utilities handle retail delivery. The Capacity Reservation Charge is an Alabama Power tariff and does not apply to customers of those utilities. TVA compensates residential exports at avoided cost through its Dispersed Power Production programme, so export value is still low, but the monthly capacity charge is not part of the picture. Confirm the terms with your own local power company.
Program
#06
No Alabama state solar tax credit
Alabama does not offer a state income tax credit for residential solar. With the federal residential credit expired for property placed in service after December 31, 2025, a cash or loan purchase now receives no tax credit at either level. Ask your county assessor how residential solar is treated for property assessment at your address, since that is administered locally.
Net metering · Alabama
No net metering; avoided-cost buyback plus a capacity charge
Alabama has no retail-rate net metering, and for Alabama Power customers it has something that matters even more. The Capacity Reservation Charge, Rider RGB, is a monthly charge of $5.41 per kW of installed capacity levied on customers who generate their own electricity. On a 7.2 kW system that is roughly $39 a month and close to $470 a year, and it is charged regardless of how much electricity you consume or export. It is assessed on the basis of the maximum power a solar customer might need from the grid if their system failed, which is why it scales with system size rather than with usage. A federal district court ruled in March 2026 that Alabama Power may continue to charge it, and it is among the highest such charges in the country. Separately, excess generation exported to the grid is bought at roughly 3 to 5 cents per kWh against a retail rate closer to 16 cents. The two together produce an unusual design conclusion. Because the capacity charge rises with installed capacity while exported electricity is worth a fraction of retail, a larger system is penalised twice: it pays more every month and earns little for the extra output it sends to the grid. So the design should be built tightly around what your household actually consumes during daylight. Northern Alabama is a genuinely different market. Huntsville, Decatur, Florence and Athens are in TVA territory, served by local distributors, and the Capacity Reservation Charge is an Alabama Power tariff that does not apply there.
Worth checking before you sign:
taking a rebate can change your net-metering terms, and export credit rules
differ by utility. Your matched installer confirms the exact numbers for
your address.
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