Solar Incentives in Alabama (2026)
The 30% federal tax credit for purchased home solar ended Dec 31, 2025. Here's exactly what solar incentives are left in Alabama in 2026 — and how much they're worth.
| State tax credit | None |
|---|---|
| SREC market | No |
| Net metering | Avoided-cost export credit — see Alabama net metering → |
| Other incentives | No statewide solar tax credit or rebate; Alabama Power adds a monthly solar capacity fee and pays only avoided-cost for exports. |
Incentive details reflect programs active in 2026. Programs change and often have caps or waitlists — always confirm current status on DSIRE and with your installer.
Federal credit status (2026): the 30% residential clean-energy credit (Section 25D) was repealed for systems purchased and placed in service after Dec 31, 2025 — cash and financed buyers can no longer claim it. A leased or PPA system can still access the commercial credit (Section 48E), which its owner can claim through 2027 and may pass on as a lower price. That makes Alabama's state and utility incentives, not the federal credit, the main lever on your 2026 payback.
How much can you actually save in Alabama?
A typical 8 kW install in Alabama costs about $20,400 before incentives. Alabama has no state income-tax credit, so your savings come from avoided-cost export credit, and the specifics below: No statewide solar tax credit or rebate; Alabama Power adds a monthly solar capacity fee and pays only avoided-cost for exports. With the 30% federal credit gone for purchases, these state and utility programs — plus your avoided electricity cost at ~17¢/kWh — are what now determine payback.
See full solar costs & payback for Alabama
Solar panel cost in Alabama →Alabama solar incentives FAQ
Does Alabama have a solar tax credit?
No. Alabama has no state solar income-tax credit in 2026. No statewide solar tax credit or rebate; Alabama Power adds a monthly solar capacity fee and pays only avoided-cost for exports.
Does Alabama have an SREC market?
No. Alabama does not have an active SREC market, so there are no tradable solar certificates to sell here. Your return comes from avoided-cost export credit, any state or utility incentives, and avoided electricity costs.
Can I still get the 30% federal solar tax credit in Alabama?
Not if you buy the system. The federal residential (25D) credit was repealed for purchases placed in service after Dec 31, 2025. A leased or PPA system can still tap the commercial (48E) credit its owner claims through 2027, which may show up as a lower rate — but you won't file for 30% yourself on a cash or financed purchase.
What incentives are left in Alabama in 2026?
avoided-cost export credit, and: No statewide solar tax credit or rebate; Alabama Power adds a monthly solar capacity fee and pays only avoided-cost for exports. Always confirm current program status on DSIRE before signing.