Renewable Energy Technology Incentives in Alabama | The Renewable Energy Hub USA

Renewable Energy Technology Incentives in Alabama

Compared to many other states in the US, Alabama has been slow to embrace renewable energy technologies. It’s a strange state of affairs considering they have often been at the forefront of developing new business and also, being a southern state, have the ideal climate for both solar and wind to succeed on both small and large scale installations.

Whether that is going to change in the near future will depend a lot on the incentives that are put in place and the willingness of new businesses to start embracing industries like solar PV. According to Alabama Power, the major power supplier in the state, out of its 1.2 million customers only 60 of them have solar panels that are connected to the grid.

Solar PV Incentives in Alabama

The lack of uptake of solar PV could actually be down to the big power company charging extra to use this form of energy and connect to the grid. They also don’t pay the higher feed in tariffs that other states employ to promote solar power and provide a good ROI for residential and business concerns. In their defence, Alabama Power say their punitive measures against solar installations are to ensure that other customers don’t have to subsidise those who decide to make the most of the sun.

While there are indications that solar PV for smaller businesses and home owners is beginning to be taken more seriously by power companies, state legislature has done nothing to make things easier for those who want to have this technology installed. Residents can, of course, benefit from Federal Tax Credits that apply all over the US and which can knock around $6,000 off a £20,000 installation.

A lot depends on where you are located as with many states. If you are fortunate to be within the remit of the Tennessee Valley Authority you can benefit from a $1,000 rebate to help offset initial costs. 

Solar PV Case Study in Alabama

For a 2 kW system you should be expecting to pay around $9,000 which will come with a Federal Tax Rebate of around $2,700. Assuming you reduce your electricity bill by about £300 a month you could expect to see a return on investment in around 15 years that will give you a profit of $500 a year thereafter. While not as advantageous as in other states, there is a chance to make a decent profit as a long term investment with solar PV in Alabama though better state legislation would certainly improve matters.

Small Hydro Incentives in Alabama

75% of Alabama’s renewable energy actually comes for hydro and with new legislation from Congress in recent years, there has been a streamlining of rules and regulations relating to small scale hydroelectric installations. Alabama is more focused on large scale installations rather than micro hydro and there are few incentives for communities to come together and produce their own electricity through this technology at the moment.

If you live in Tennessee Valley again, there are low cost loans provided by TVA for small scale hydroelectric.

Geothermal Incentives in Alabama

There are more incentives and greater uptake for renewable energy technologies such as heat pumps, both ground and air sourced, in Alabama. Not only can home owners and businesses benefit from 30% Federal Tax Rebates but there are various local and state wide initiatives in place to help.

Property Assessed Clean Energy Financing is available for heat pumps and a wide range of other renewable and clean energy options. These basically let residents and businesses to obtain low cost loans for energy improvements.

Alabama Power also provide low cost loans for the installation of heat pumps depending on credit score and the type of installation.

Wiregrass Electric Cooperative also operate a rebate program for those who install heat pumps and other efficient water heaters.

Biomass Incentives in Alabama

Alabama offers a 100% tax deduction for all biomass installations in the year that they were installed and is actively trying to promote homes to convert to technology such as wood-burning heating systems. The state is a major player in the biomass market and there are plenty of incentives for companies that want to take advantage. This includes the State Biomass Energy Program which offers up to $75,000 in subsidies for approved schemes and various tax credits.

Wind Power Incentives in Alabama

As with solar, Alabama is well placed to take advantage of wind power to produce renewable energy for local and national needs. Not only is there support through the Federal Tax Rebate but locations such as the Tennessee Valley Authority offer a range of incentives including for wind development. Large corporations such as Alabama Power have been forced by legislation to produce more of their energy mix from renewables which has led them to embrace areas such as wind energy more in recent times.

Government Offices and Renewable Energy

Alabama provides a full range of incentives for their public buildings and organisations such as schools and government institutions. This includes the State Revolving Loan that can provide advances between $350,000 and $500,000. There are no interest rates but the loans have to be paid back within ten years.

Despite its reluctance in engaging with solar PV, Alabama has numerous incentives for other kinds of renewable energy which, combined with country wide benefits, have helped to encourage uptake in recent years. There is still some way to go, however, if they want to catch up with states such as California where engagement and incentives are at much higher levels. 


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