AL · Solar

Solar quotes in Mobile, AL.

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7.5 kW
Average system size
$2.80/W
Average cost (USD)
12 yrs
Average payback
60+
Local installers

Why solar in Mobile

Almost everywhere else, the question of how big a solar system should be is about balancing cost against production. In Alabama Power territory it is sharper than that, because the Capacity Reservation Charge is levied per kW of installed capacity every month. Every extra kilowatt you install adds $5.41 to your bill each month for the life of the system, and the extra output it generates is worth 3 to 5 cents a kilowatt hour once exported.

A larger system is penalised twice

The Capacity Reservation Charge is $5.41 per kW of installed capacity per month. So each additional kilowatt of array adds roughly $65 a year to your bill, permanently, before any consideration of what it generates.

Meanwhile the marginal capacity at the top of a design is the capacity most likely to produce surplus, and surplus is bought at roughly 3 to 5 cents per kWh rather than the retail rate closer to 16.

So the extra kilowatt costs more every month and earns less per kilowatt hour than the capacity below it. Those two effects compound rather than offsetting.

That is a genuinely unusual structure. Most states penalise oversizing only through low export rates; Alabama Power adds a fixed monthly penalty on top.

The sum worth doing yourself

For each additional kilowatt of capacity, work out the annual capacity charge, $5.41 times twelve, which is about $65.

Then work out what that kilowatt actually earns. If most of its output is exported at 3 to 5 cents, and a kilowatt of solar in Alabama produces on the order of 1,400 kilowatt hours a year, the export earnings alone may not clear the capacity charge.

That is the arithmetic that decides where your design should stop, and it is simple enough to check on paper.

Ask your installer to show it explicitly: for the last kilowatt of proposed capacity, the expected output, the split between self-consumed and exported, the value of each, and the capacity charge it triggers.

Coastal considerations while you are asking

Mobile is a Gulf Coast city, so salt air and hurricane wind loading are both real design inputs rather than footnotes.

Ask what the racking and fastener materials are, what corrosion rating they carry, and whether the manufacturer warranty has any exclusion or reduced term for coastal or marine installations.

Ask what wind speed the racking and attachment system is rated and engineered for, how many attachment points there are, and whether a structural assessment of the roof was performed.

Ask your insurer before installation whether the array is covered under dwelling coverage, whether your wind and hail deductible differs from your standard deductible, and whether the premium changes. That is a recurring cost and belongs in the arithmetic alongside the capacity charge.

Costing it out with the recurring charge included

The 30 percent federal Residential Clean Energy Credit under Section 25D expired for property placed in service after December 31, 2025, so a cash or loan purchase in Mobile receives no federal tax credit, and Alabama has no state solar tax credit.

Section 48E survives at 30 percent for third-party owners under leases and power purchase agreements, so ask what a provider claims and what reaches you in the rate.

What exists is retail value for self-consumed generation, 3 to 5 cents per kWh for exports, and the Capacity Reservation Charge at $5.41 per kW per month scaling with the size you install.

Ask for the marginal analysis on the last kilowatt of capacity, and add any insurance premium change as a further recurring cost.

Incentives & rebates

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.

How payback works in Alabama

System cost
$21,000
Estimated net cost
$21,000
Estimated payback
~13.0 years
25-year net savings
~$19,500

These figures are illustrative; your actual quote reflects your roof, sun exposure, and local utility rates.

Frequently asked questions

Does a bigger system cost more every month in Alabama?
On an Alabama Power account, yes. The Capacity Reservation Charge is $5.41 per kW of installed capacity per month, so each additional kilowatt adds roughly $65 a year permanently, before any consideration of what it generates.
How do I work out where to stop?
For the last kilowatt of proposed capacity, compare the annual capacity charge it triggers, about $65, against what that kilowatt actually earns given how much of its output is self-consumed at retail versus exported at 3 to 5 cents.
Does salt air matter on the coast?
It is hard on outdoor metal over the life of the system. Ask what the racking and fastener materials and corrosion ratings are, where enclosures will be mounted, and whether the warranty carries a coastal or marine exclusion.
What should I ask about wind?
What wind speed the racking and attachment system is rated and engineered for, how many attachment points there are, whether a structural assessment was performed, and whether your insurance premium or wind and hail deductible changes.

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