Alabama State Solar Power Rebates, Tax Credits, and Incentives
Earlier in the month I wrote about how in the state of Washington you could at least recoup some of your upfront PV installation costs via state tax incentives. I also joked that although it was not an immediately huge amount, at least homeowners there didn’t live in Alabama, where I guessed there were none. So, I decided to do a little legwork on the state solar incentives offered in Alabama. My findings? Well, not only are there zero state incentives for solar power generation, there is a personal deduction for burning firewood! How backwards is that? Maybe this makes sense though. I mean, imagine you’re an Alabama state legislator and you gotta look at that state flag (pictured above) when you’re trying to get new laws through congress. Looks like a big NO!
There is however some hope for solar power rocking in the Yellowhammer state, since some green bigwhigs over at the Tennessee Valley Authority (note, this was not legislation passed by folks down in Montgomery) set a goal for a renewable power generation on the part of residents and businesses to hit 5 Megawatts. Good! What happens when that goal is reached is anyone’s guess, maybe there will be some fireworks.. or a wood-fired hog roast.
How are they planning on getting there? Well, participating power distributors in TVA’s “Green Power Switch” Generation Partners program offer production-based incentives for solar photovoltaics (PV) and wind projects to residential/small-commercial customers and incentives for PV projects to large commercial customers in Alabama.
Here are the specifics:
- To jumpstart the initiative, the owner of a qualifying residential system will receive a $500 payment when the site is connected to the grid until a total capacity of 150 kW has been reached. (That means you)
- Under the residential/small-commercial contract, TVA will purchase the entire output of a qualifying system at $0.15 per kWh through a participating power distributor, and the consumer will receive a credit for the power generated.
- Consumers participate as either residential/small-commercial or commercial customers.
- A solar or wind generation source is installed by a residential or small commercial power customer served by a participating distributor of TVA power.
- Payment is made in the form of a credit issued by the local power distributor on the monthly power bill for the home or business where the generation system is located. Payments are guaranteed for 10 years from the date of the contract. Energy consumed at the home or business, whether it is generated at the site or delivered over the local power distribution system, is billed at the standard rate.
- All equipment must be in compliance with national standards and all applicable codes and be certified by a licensed electrician.
- The credit of $0.15/kWh is available for a minimum of 10 years from the signing of the contract, regardless of the amount produced. Payment is made in the form of a credit issued by the local power distributor on the monthly power bill for the home or business where the generation system is located. TVA retains sole rights to any renewable energy credits.
- In September 2004, larger commercial customers were included in the program. Under the larger commercial contract, TVA will purchase the output at $0.20 per kWh.
- Participation in this program is entirely up to the discretion of the power distributor.
- For commercial consumers, qualifying sources are restricted to PV only. Although the maximum output for commercial generation systems remains at 50 kW, (more possible)
- Customers of other TVA distribution utilities who are interested in this program should contact their utility customer services representative.
Example residential 2 kW PV system install:
2 kW PV system for residential PVA distributor customers
|
$20,000 |
Total installed cost |
|
-$500 |
PVA connection credit |
|
$19,500 |
Amount paid by customer to contractor |
|
- $0 |
Alabama tax credit (N/A) |
|
-$2,000 |
Federal tax credit (30% of $19,500, $2,000 cap) |
|
-$5,250 |
Green Power Switch Producer credit (3,500 Kwh/year * $0.15 * 10 years) |
|
$12,250 |
Final net cost to customer |
Links to other Alabama municipal solar resources:
ADECA Local Government Energy Loan Program - If you are a local government or a public school in a rural area this program can get you low interest loans for energy efficiency projects.
City of Florence Efficient Energy Incentives - If you live in Florence you can get $200 cash for a new energy efficient home and $50 for a new water heater.
Joe Wheeler Electric Membership Corporation - For new homes you can apply for a rebate with this program.
Muscle Shoals Electric Board New Homes Program - $200 if you can beat a 83 HERS on your new home.
South Alabama Electric Cooperative - They have some loans for energy efficient projects.
Alabama specific programs from the Federal Department of Energy
Consensus:
Thanks to the TVA, the state of Alabama is not completely anti-green initiatives. However, there needs to be more consideration in Montgomery to incentivize renewable energy users and producers instead of those cutting down trees for firewood. The state has an excellent solar resource rating. Why not use the sun for energy instead of wood?
Click here to have multiple solar installers bid to upgrade your Alabama home or business.
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