Alabama State Solar Power Rebates, Tax Credits, and Incentives

Solar Legislator Score:

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.

17 comments.

henry
Comment on September 8th, 2008.

Alabama state legislators have been investing our money in “clean coal” and nuke. clean coal is misleading: “There is no such thing as ‘clean coal’ and there never will be. It’s an oxymoron.” i am proud to be an american but imbarased to be from alabama where the lobbyers own the the goverment from the governor down. may the ones who sells us out burn in hell.
imbarased

Michael Alpers
Comment on October 2nd, 2008.

The local power producers Including TVA and Huntsville Utilities in northern Alabama do not care or have a clue. If you read the TVA write-up completely they will not allow reverse power generation to offset the cost of making green power. It is only a marketing scam. If they were truly serious they would allow reverse generation at the rates charged to the consumer as most other states do. There is nothing green about the state of Alabama and from what I can see never will be. They won’t even recycle for that matter.

Jon Ingram
Comment on October 22nd, 2008.

“imbarased” is embarrassing me! Believe it or not, there are plenty of literate people who live in Alabama! Not all of us are rednecks either. My state has been stereotyped since the ’60s. Alabama is not as nearly backwards and unrefined as national public perception would have one believe.

Anyway, our Governor IS doing something in the area of alternative fuels. Is it enough? NO. But, at least it is a start. To see one important step he is undertaking check out this press release from his office:
http://governorpress.alabama.gov/pr/pr-2008-09-26-01-clean_corridor.asp

henry
Comment on November 12th, 2008.

jon, you got me. (embarrassed), public schooled. need i say more. we are not on the same page with alternative fuels. do you work with the gov.?

Jean
Comment on November 25th, 2008.

A power plant near Birmingham holds the record for airborne mercury production from coal.

michael
Comment on November 30th, 2008.

I have lived in Alabama for most of my life and I am ashamed at the way our state is lacking on renewable power that will help not only our state but the country as a whole by not providing more in the way of grants and insentives to help anyone go green if they want. Alabama Power should not hold a monopoly on Power nor should any other.

Sumpter
Comment on December 6th, 2008.

Im all about green power. The real tradgedy is a southern company also owns georgia power allows residents to sell power back to ga power where as alabama residents cannot! What should be done is all deposit money collected should be made to be used in construction of pv and wind generation plants. This money is never taxed and is hidden to public disclosure. The person who pays this money almost never sees it again. Politicians who protect monopolys such as this god will spew from gods mouth, no matter how godly they veiw thierself. What pathetic blight.

M. H. Henry
Comment on March 7th, 2009.

I think we should focus on how to save money as Alabama residents and write our congressman with any complaints. It will not do any good here. We should be interested in sharing information here that will lead us to a decision to buy green power or not based on the current benefits and or tax cuts. Leave the emotions out of it and stick to the facts. This will help us and others be more productive in our decision making.

M. H. Henry
Comment on March 7th, 2009.

Question #1 (calculation of savings)
I am interestd in this calculation.
Green Power Switch Producer credit (3,500 Kwh/year * $0.15 * 10 years)
Is the 3,500 an average or a maximum?

Question # 2 (Best installers)
Who if anyone here has had a contractor install a system? What are the best contractors in Alabama at the best cost.

Nicole
Comment on April 8th, 2009.

If I am not mistaken, the TVA program requires the homeowner to carry huge amounts of very expensive insurance to cover TVA’s equipment — insurance costs which overwhelm the savings of any benefits they offer.

Comment on April 17th, 2009.

I live in Tuscaloosa, Alabama. Our city offers Recycling, emissions testing, and hazardous waste collection. Here is a good article about what Tuscaloosa and other Alabama cities are doing: http://www.nbc13.com/vtm/news/local/article/tuscaloosa_experiments_with_going_green_at_waste_water_treatment_plant/59631/

Chris
Comment on April 19th, 2009.

One would think that with energy prices as high as they are that each state could come up with a nice plan to help the individual who wants to go solar. Doesn’t surprise me that Alabama which is also one of the lowest ranked states in everything else would not have a plan to help people.

JOHN
Comment on April 19th, 2009.

I am very disappointed in my state government and their lack of interest in promoting solar energy. To add insult to injury our local cooperative, Baldwin EMC actually charges you a higher rate for electricity if you have any alternative energy source supplementing energy to your home or business.

Monty
Comment on May 11th, 2009.

Alabam is a great place to implement a PV system, all you have to do is pay for it yourself. Obama’s plans and incentives work only for commercial investments geared towards “savings” for the tax payers. What a joke.

There is a huge political mokery running this state when a man can get payed to burn wood and gets laghed at when he wants to sell the extra juice generated fron a PV system.

Here’s an idea: Make it a “federal” mandate that anyone who generates more power than they need, gets to run the meeter in reverse. Set a standard for the quality of power produced, the same thing you want running your home theater or computer, give me a little insentive, keep it simple and call it a day.

Sorry, that would make too much sence. Obama is just as big a stand up “green” comedian as the gold lined pocket pupets in Montgomery.

Judy
Comment on May 30th, 2009.

I am not ashamed of living in Alabama, nor do I particularly care about the stereotypes commonly associated with it. I do think that the Alabama should assist, and in some cases, provide “green living” for its residents. It would save the government a fortune in low income supplement. Also, considering the years of toxic abuse heaped upon our land, Alabama could really use the opportunity to make amends to the earth.

Mark McMullen
Comment on June 22nd, 2009.

I see that most of you agree to a certain degree that the federal and overall individual states are not as GUNG HO to give big incentives. I agree with Monty’s idea, Let the meter go in reverse if you make more than you use, and or at least pay you the same rate that they charge you per kwH. When you install the PV system it comes with a secondary meter that shows you how many kwH you have produced produced. Although there is no incentives in Al. to speak of, if you install a system and use the power from the PV as the primary and the grid as the secondary than you bypass the issue of being compensated by the local power company. The systems out there are expensive, but if you are building a home get the system finance all in one with the home loan and you will hit the ground running with savings. If I stand corrected please comment. The more we know the better. Power to the People.

Mark McMullen
Comment on June 22nd, 2009.

I will also share this. I have worked on government facilities as an inspector and as a construction superintendent and I have seen the govt. waste alot of our tax money. And to this day I cannot figure out why they will not utilize the power supply systems available on there own structures. I think we should also pressure them “contact your local Rep.” to do the right thing and set the example. They all preach how we ” the rodents in the maze” need to do the right thing for our country. Its time we make them do the right thing for “US” since we do pay for their luxuries. Power to the People.

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