Solar Panel Cost in Alabama (2026)

Net metering: 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.