Alabama solar incentives come down to your utility’s rules. The state has no rebate, no tax credit and no rule that makes a utility give full bill credit for solar power. Your utility decides two things: what it pays for the solar power you do not use, and what it charges a home with panels. Find your utility first, then check those two numbers.
Recently changed: Alabama Power’s prices for extra solar power were updated with April 2026 bills. Guides that show lower prices are out of date. On March 25, 2026 a federal court ruled that Alabama Power may keep its monthly charge on solar homes.
Alabama Power, Huntsville Utilities or a co-op: whose solar rules cover your home?
The name is at the top of your electric bill. Each utility below pays a different price for extra solar power and charges solar homes in a different way. Open yours.
Alabama PowerThe largest electric utility in the state. Serves about 56% of Alabama homes.Pays 3.45 to 5.47 cents per kWh. Charges $5.41 per kW a month.
What you can get with Alabama Power
- Price for extra power (Rate PAE)3.45 to 5.47 cents per kWh
Alabama Power buys the power you send to the grid. The price depends on the season, the hour and your rate plan. Example: 100 extra kWh earn $3.45 to $5.47.
- Monthly capacity charge (Rider RGB)$5.41 per kW a month
Charged on the size of your system, not on the power you send out. A typical 9.95 kW system pays $53.83 a month, or about $646 a year.
- Monthly meter charge$0.91 a month
A base charge for homes that sell power under Rate PAE. It covers metering and billing.
Your bill credits
Alabama Power does not use net metering: a system where each kWh you send out cancels one kWh you buy. Your home uses your solar power first, and that part lowers your bill directly.
The power you do not use flows to the grid. Alabama Power buys it under Rate PAE, its tariff (official price sheet) for home systems up to 100 kW. The price is 3.45 to 5.47 cents per kWh. For comparison, Alabama Power homes paid about 16.8 cents per kWh on average in 2024, with every charge included.
What you earn shows as a credit on your account. Credits carry forward, and you can ask for a check.
Watch out: The capacity charge is fixed by system size. A bigger system pays more every month, also in months when it sends out little power. See the charge by size, and two ways to change it.
Also for every Alabama home: what the state offers in taxes, four quotes that will not hold up and the paperwork in order.
Huntsville UtilitiesThe Huntsville area in north Alabama. Serves about 8% of Alabama homes.Pays 6.427 cents per kWh in 2026. One-time $100 fee.
What you can get with Huntsville Utilities
- Solar Connect price for extra power6.427 cents per kWh
Huntsville Utilities buys the power your system sends to the grid and credits it on your bill. Example: 100 extra kWh earn $6.43. The price is set for 2026 only. Ask for the 2027 price before you sign.
- Application fee$100
Billed once to your utility account when you apply.
- Size limit50 kW
Systems over 10 kW must carry liability insurance of at least $1,000,000. Smaller systems need no extra insurance.
Your bill credits
Huntsville Utilities says it does not do net metering: a system where each kWh you send out cancels one kWh you buy. Power you use at home lowers your bill. Extra power earns the Solar Connect price.
That price is based on the wholesale rate of the Tennessee Valley Authority (TVA), the federal power agency that supplies Huntsville. Wholesale is the price utilities pay for power.
Solar Connect is for systems the customer owns. It has a participation cap: a limit on how many systems can join. The room left is not published, and Huntsville Utilities advises applying early.
Watch out: If you connect panels and join neither Solar Connect nor TVA’s own purchase program, you are not paid for extra power at all.
Also for every Alabama home: what the state offers in taxes, four quotes that will not hold up and the paperwork in order.
Baldwin EMCBaldwin County, on the Gulf Coast. Serves about 3% of Alabama homes.No published price for extra power. Solar homes change rate.
What you can get with Baldwin EMC
- Price for extra powerNot published
Baldwin EMC is an electric cooperative: a utility owned by its members. It or its power supplier, PowerSouth, may buy your extra power under a purchase contract. The co-op’s solar page gives no price.
- Rate for solar homes32 cents per kWh at peak
A home with solar moves to a time-of-use rate: a rate where the price depends on the hour. Power you buy costs 32 cents per kWh in peak hours and 5.321 cents per kWh in all other hours. Example: 100 kWh bought in peak hours cost $32.
- Basic service charge$46.95
Part of the rate for solar homes. You pay it whatever your panels make.
- Larger systemsOver 10 kW
A project above this size needs a facilities study: the co-op’s check of what its power lines need. The member pays all connection and upgrade costs.
Your bill credits
Peak hours are 3 p.m. to 6 p.m. from April to October, and 6 a.m. to 8 a.m. from November to March. Solar power you use at home in those hours saves the most. Power you still buy in those hours costs far more than off-peak power.
For extra power, the co-op’s page describes a purchase contract but no price. Ask Baldwin EMC for the price in writing before you sign with an installer.
Watch out: A quote that shows income from extra power needs a price that Baldwin EMC or PowerSouth has confirmed. Without it, that line of the quote is a guess.
Also for every Alabama home: what the state offers in taxes, four quotes that will not hold up and the paperwork in order.
Another co-op or city utilityOther electric cooperatives and city utilities, including the north Alabama utilities that buy their power from TVA.Rules set by your utility. Get them in writing.
What you can get with Another co-op or city utility
- Price for extra powerAsk your utility
Rate PAE and Rider RGB are Alabama Power rate sheets. They do not apply to any other utility. Solar Connect is only for Huntsville Utilities customers.
- What to ask forIn writing
The price per kWh for extra power. Any monthly charge for solar homes. Any rate change when you add solar. The application fee. The size limit.
Your bill credits
This page gives numbers only for the three utilities above, which publish their solar rules. For any other utility, get the five answers in the list above before you sign a solar contract.
Watch out: Do not accept a savings figure built on Alabama Power’s or Huntsville’s prices if another utility sends your bill.
Also for every Alabama home: what the state offers in taxes, four quotes that will not hold up and the paperwork in order.
Everything below applies across Alabama, except where it names one utility.
What do Alabama utilities pay for extra solar power, and what do they charge?
No Alabama program pays you for installing panels. These three utilities publish what they pay and charge.
| Utility | Price for extra power | Charge or rate change for solar homes | Size rule | Before you install |
|---|---|---|---|---|
| Alabama Power | 3.45 to 5.47 cents per kWh, by season, hour and rate plan | $5.41 per kW of system size each month, plus $0.91 a month | Up to 100 kW | An approved application in PowerClerk, Alabama Power’s online portal |
| Huntsville Utilities | 6.427 cents per kWh for 2026 | $100 application fee, once | Up to 50 kW. The program has a participation cap. | A Solar Connect application and written approval of the design |
| Baldwin EMC | Not published | A time-of-use rate: 32 cents per kWh at peak, 5.321 cents per kWh off-peak, and a $46.95 basic service charge | A facilities study over 10 kW | An approved application to connect your system |
None of these is net metering, where each kWh you send out cancels one kWh you buy. Alabama has no state net metering law or rule.
Get quotes, then check them against your utility’s rules
Your ZIP code starts a quote request with installers in your area. A sound Alabama quote names your utility and shows its price for extra power as its own line.
- The utility sets the mathAlabama Power, Huntsville Utilities and Baldwin EMC each pay and charge differently.
- Free to compareRequesting quotes costs nothing. You never have to sign.
- Shared with matched installers onlyYour details go to the installers you are matched with.
How much does Alabama Power’s capacity charge cost by system size?
Rider RGB is an Alabama Power rate sheet for customers who make part of their own power. For a home on the standard rate, it adds a Capacity Reservation Charge of $5.41 per kW each month. Alabama Power says the charge pays for keeping power ready for the hours when your panels are not producing.
The charge uses nameplate capacity: the rated size of your system in kW. It does not look at how much power you send out. The current rate sheet has applied since April 2022 bills.
- Ask for a calculation: if you think your system’s rated size is more than the capacity you really need, you can ask Alabama Power to work out your actual need. The charge then applies to that figure.
- Take Rate RTA instead: qualifying customers can swap the capacity charge for Rate RTA, a rate where the price depends on the hour. Under it, power you buy costs 71 cents per kWh from 3 p.m. to 5 p.m. on weekdays from June through September.
System size | Charge each month | Charge each year |
|---|---|---|
5 kW | $27.05 | $324.60 |
9.95 kW (typical Alabama home) | $53.83 | about $646 a year |
12 kW | $64.92 | $779.04 |
Each figure is $5.41 per kW times the system size. Example: to earn back one month’s charge on the typical system from extra power alone, a home would have to sell about 984 kWh in a month at the highest Rate PAE price.
Watch out: The charge was challenged in federal court. On March 25, 2026 the court ruled for Alabama Power and the Public Service Commission, the state’s utility regulator. Ask every installer to show the charge as a line in the savings estimate.
Which Rate PAE price applies to an Alabama Power home?
Rate PAE has three options. You do not pick freely: the option depends on the Alabama Power rate plan your home is on.
Option | Highest price | Lowest price |
|---|---|---|
Time of Day | 5.17 cents on weekdays from 10 a.m. to 9 p.m., in the June to September billing months | 3.66 cents outside weekdays 7 a.m. to 9 p.m., in the October to May billing months |
Time Advantage | 5.47 cents on weekdays from 1 p.m. to 7 p.m., June 1 to September 30 | 3.45 cents in all hours in October, April and May |
Residential Demand | 4.64 cents on weekdays from 1 p.m. to 5 p.m., April 1 to October 31 | 3.83 cents in all other hours, April 1 to October 31 |
Each option has more price steps between these two.
Watch out: These prices are not fixed for the life of your system. The posted sheet is the 47th revision, and Rate PAE service runs one year at a time. Ask your installer which option the quote uses.
Does Alabama give home solar a tax break?
Not on state income tax. The Alabama Department of Revenue’s list of other credits, Schedule OC for 2025, has no credit for home solar.
The federal tax credit for home solar ended for systems finished after December 31, 2025. A quote that still subtracts it is wrong.
Sales tax and property tax: ask, do not assume. Ask your installer whether the quote includes sales tax, and to show it as its own line. Ask your county revenue office how it values a home with solar panels.
Four Alabama solar quotes that will not hold up
- The quote subtracts a tax credit. The federal credit ended for systems finished after December 31, 2025. Alabama’s Schedule OC for 2025 lists no state credit for home solar.
- The quote leaves out Alabama Power’s capacity charge. For a typical 9.95 kW system it is about $646 a year, for as long as the rate sheet stays in force.
- The quote values extra power at the price you pay for power. Alabama Power buys it at 3.45 to 5.47 cents per kWh. Huntsville Utilities pays 6.427 cents per kWh in 2026. Baldwin EMC publishes no price.
- The quote uses one utility’s numbers for another utility’s customer. Rate PAE and Rider RGB apply only to Alabama Power. Solar Connect is only for Huntsville Utilities customers who own their system. Ask Huntsville Utilities first if your offer is a lease.
Apply to your utility first: the Alabama paperwork in order
- Find your utility and its rules. The name is on your electric bill. For a utility not listed on this page, ask for its solar rules in writing.You.
- Apply before you buy. Alabama Power takes applications in PowerClerk, its online portal, and asks you to have approval before you buy or install panels. It charges no study fee for systems up to 25 kW, and $500 above that. Huntsville Utilities uses its Solar Connect application, with a $100 fee. Baldwin EMC takes an application at its Energy Services Department.You or your installer.
- Wait for approval, then install and pass inspection. Huntsville Utilities says a system must not run until it gives written approval and the local inspector passes it. Baldwin EMC runs a test of the finished system, and you sign the connection agreement that day.Your installer and your utility.
- Alabama Power homes: settle the rate. Selling extra power under Rate PAE is your choice. Rider RGB applies to every home that runs its own generation on Alabama Power’s lines. Decide if you keep the capacity charge, ask for a calculation of your actual need, or move to Rate RTA.You, with Alabama Power.
- Read your first bills. Check the price per kWh for extra power and every monthly charge against your quote. At Alabama Power, credits carry forward and you can ask for a check.You.
Request Alabama quotes that name your utility
Enter your ZIP code to request quotes from installers in your area. Ask each one which utility it assumed, the price it used for extra power and the monthly solar charge it included.
The form asks about your home first, then your contact details. EcoGen or its installer partners may contact you.
- A quote request by ZIP codeThe form asks installers near you for quotes. It does not apply to your utility for you.
- Home first, contact details lastA few questions about your home come first. Name, email and phone come at the end.
- Test each quoteHold every quote against the four warning signs on this page before you sign.
More Alabama solar guides
Alabama solar incentive questions
Does Alabama Have a Solar Tax Credit?
No. Alabama’s Schedule OC for 2025 lists no state income tax credit for home solar. The federal credit ended for systems finished after December 31, 2025.
Does Alabama Have Net Metering?
No. Alabama has no state net metering law or rule. Alabama Power buys extra solar power at 3.45 to 5.47 cents per kWh. Huntsville Utilities pays 6.427 cents per kWh in 2026. Baldwin EMC publishes no price.
What Is the Alabama Power Solar Fee?
It is the Capacity Reservation Charge in Rider RGB: $5.41 per kW of system size each month on the standard home rate. The current rate sheet has applied since April 2022 bills. A typical 9.95 kW system pays about $646 a year. A federal court let the charge stand on March 25, 2026.
Does Huntsville Utilities Buy Back Solar Power?
Yes, through Solar Connect. It pays 6.427 cents per kWh in 2026 for power you send to the grid, as a bill credit. The application fee is $100 and the size limit is 50 kW. The program is for systems you own.
Are There Any Solar Rebates in Alabama?
We found none for home solar panels: not from the state, and not from Alabama Power, Huntsville Utilities or Baldwin EMC. What differs by utility is the price for extra power and the charges on a solar home.
Sources (9)
- Alabama Power, Rate PAE, Purchase of Alternate Energy, 47th revision, April 2026 billings (checked October 1, 2026): alabamapower.com
- Alabama Power, Rate Rider RGB, Supplementary, Back-Up, or Maintenance Power, 7th revision (checked October 1, 2026): alabamapower.com
- Alabama Power, Solar Energy: rooftop solar steps and rate options (checked October 1, 2026): alabamapower.com
- U.S. District Court, Middle District of Alabama, Bankston v. Alabama Public Service Commission, No. 2:21-cv-469, memorandum opinion of March 25, 2026 (copy hosted by the Southern Environmental Law Center; checked September 30, 2026): selc.org
- Huntsville Utilities, Solar Connect (checked October 1, 2026): hsvutil.org
- Baldwin EMC, Solar Power FAQs (checked October 1, 2026): baldwinemc.com
- Alabama Department of Revenue, Schedule OC 2025, Other Available Credits (checked October 1, 2026): revenue.alabama.gov
- IRS, Residential Clean Energy Credit (checked September 30, 2026): irs.gov
- U.S. Energy Information Administration, Form EIA-861, 2024 data, Sales to Ultimate Customers (checked September 30, 2026): eia.gov
