Is Solar Worth It in Alabama? Payback Calculator
See how long solar takes to pay back in Alabama and what it saves over 25 years, using the state's averages.
Your result
Enter your numbers and press the button. Your result appears here.
Homes in Alabama paid 16.51¢ per kWh in 2026 (EIA, January–August), #23 of 51 from highest. A kW of panels makes about 1,367 kWh a year there, #26 of 51.
How it works
Each year's savings = kWh produced × electricity price. Payback is the year the running total of savings reaches the net cost. Output falls by the panel loss rate each year.
Example: an 8 kW system costing $29,760 saves $1,806 in year one at 16.51¢ per kWh and pays back in 17.2 years.
Alabama solar figures
| Average installed price | $3.72 per watt |
|---|---|
| Residential electricity price | 16.51¢ per kWh (U.S. 18.19¢) |
| Yearly output of 1 kW of panels | 1,367 kWh (U.S. 1,367) |
| Peak sun hours | 5.21 a day |
| 8 kW system | $29,760 before incentives |
| First-year savings, 8 kW | $1,806 |
| Payback, 8 kW | 17.2 years |
| 25-year net gain, 8 kW | $12,771 |
At a glance
Same settings as the calculator, changing only the system size.
| System size | Net cost | Year 1 savings | Payback | 25-yr gain |
|---|---|---|---|---|
| 4 kW | $14,880 | $903 | 17.2 yrs | $6,386 |
| 6 kW | $22,320 | $1,354 | 17.2 yrs | $9,578 |
| 8 kW | $29,760 | $1,806 | 17.2 yrs | $12,771 |
| 10 kW | $37,200 | $2,257 | 17.2 yrs | $15,964 |
| 12 kW | $44,640 | $2,708 | 17.2 yrs | $19,157 |
| 15 kW | $55,800 | $3,385 | 17.2 yrs | $23,946 |
Common questions
How long does solar take to pay for itself?
It depends mainly on your electricity price and how much sun you get. At U.S. averages ($2.60/W, 18.19¢ per kWh and 1,367 kWh per kW) an 8 kW system pays back in about 10.7 years.
Do solar panels lose efficiency?
Yes, slowly. NREL's review of field studies puts the median loss at about 0.5% a year.
Is there still a federal solar tax credit?
Not for homeowners who buy their system. The 30% Residential Clean Energy Credit ended for systems installed after December 31, 2025. Leased systems and PPAs can still carry a business credit (48E) that the installer claims.
What if my utility pays less for exported power?
Lower the share credited at full price and enter your utility's export credit under More settings. Payback gets longer.
Sources
- EnergySage, Solar panel cost by state (updated November 6, 2026): https://www.energysage.com/local-data/solar-panel-cost/
- U.S. EIA, Electric Power Monthly, Table 5.6.B (residential price, Jan–Aug 2026): https://www.eia.gov/electricity/monthly/epm_table_grapher.php?t=epmt_5_6_b
- NREL PVWatts v8 (20° tilt, south-facing, 14% losses), state results compiled by TheGreenWatt: https://thegreenwatt.com/average-peak-sun-hours-by-state/
- NREL, Jordan and Kurtz, Photovoltaic Degradation Rates: An Analytical Review: https://docs.nrel.gov/docs/fy12osti/51664.pdf