Solar Power Rocks logo

Solar Power Rocks - Clear info on home solar power rebates, tax credits, and other benefits

Welcome to the Ultimate Guide to Home Solar Panels in Alaska

Solar Power in Alaska

Alaska's overall grade for solar is a D. Sorry to say, but with the low levels of sun and the lack of statewide support for smart solar policy, nearly all home solar in Alaska will be a DIY thing.

State legislators here have kept a pretty low profile on renewable policy, particularly with regard to solar power. Alaska is the final frontier and remote settlements mean many homes are built off-grid, i.e. ideal for self-sustaining renewables like small-scale solar. This, along with rising fuel costs, makes Alaska an ideal candidate for solar power, and the legislature should adopt aggressive measures to promote solar use by its residents. Unfortunately, the legislature has failed to provide strong solar power rebates and other incentives as of yet, and in the Land of the Midnight Sun no less! Oh, the irony.

Why are some cloudy states better?

Alaska Solar Report Card

Alaska's overall grade for solar is a D. Sorry to say, but with the low levels of sun and the lack of statewide support for smart solar policy, nearly all home solar in Alaska will be a DIY thing.

State legislators here have kept a pretty low profile on renewable policy, particularly with regard to solar power. Alaska is the final frontier and remote settlements mean many homes are built off-grid, i.e. ideal for self-sustaining renewables like small-scale solar. This, along with rising fuel costs, makes Alaska an ideal candidate for solar power, and the legislature should adopt aggressive measures to promote solar use by its residents. Unfortunately, the legislature has failed to provide strong solar power rebates and other incentives as of yet, and in the Land of the Midnight Sun no less! Oh, the irony.

Alaska Solar Report Card
house icon Interested in a home solar system? Get Started

Is Solar Worth it in Alaska?

The cost of NOT installing solar in Alaska

The average homeowner in Alaska is paying about $129 per month, or $1,548 per year for electricity right now. That money goes straight from your pocket to the utility company.

Text from database goes here

The cost of your electricity over the next 25 years:

*assumes an average increase of 3.5% annually. Current cost is $0.22/kWh according to EIA data.

$60,294

Don't believe us? Here's how it works:

  • $129 per month average bill * 12 months = $1,548
  • With average annual increases of 3.5%, year 2 cost is $1,602, year 3 is $1,658...
  • By 2044, we project your annual electric cost to be $3,534
  • Add up all 25 years' cost and you get $60,294

The savings possible with solar in Alaska

So you’ve got some cash and you’re ready to buy. An outright purchase returns the most money over time, because you own the system from day one and reap all the benefits. That 30% Federal tax credit and electricity savings bring your first-year costs way down.

In our example, you put down $32,725, but by the end of year 1, incentives and energy savings will erase a bunch of it. Over 25 years, your system will have produced almost $9,900 in income.

But even though that sounds huge, look into the solar loan option below, because taking a loan to buy an income-generating asset means you'll be making money as you pay for it.

Solar Purchase
25-year energy costs

Before solar: $60,294
After solar: $46,374
Solar savings: $13,920

Here's how you save with solar power:

  • The average 8.5-kW system costs about $30,600 to install
  • Then the savings begin. First, you earn a $7,956 Federal Solar Tax Credit
  • Over 25 years, your solar panels will save you an estimated $36,564 on your electric bills
  • The total net savings from solar in Alaska (bill savings and incentives minus up-front cost), is $13,920
house icon Ready to see how much you can save? Get Started

Solar Loans in Alaska

Why you should consider a solar loan in Alaska

Rather than spend $30,600 of your savings to install solar, it might be wise to choose a solar loan or Home Equity Line of Credit (HELOC). Banks now recognize the savings potential of solar and offer favorable terms to help you get solar now and pay over time as you save.

The chart above might look a little funky, but considering the tax credit in year 1, it might actually be a better option than cash. That’s because a solar investment with a loan relies on using someone else’s money for the purchase price, while earning you a tax credit in year 1. The cost is similar to a new car loan, but because solar makes you money, it's a tremendous investment. A solar purchase like this will make sense for you if the following is true about you and your current situation:

  • You can get a home-equity line of credit (HELOC) for $33,000, with a fixed rate of 5% or lower and a 15-year repayment period.
  • You love making money without much risk

The reason this works so well is that you don’t have to put any money down, but you still get all of the incentives that go along with buying solar. You'll get the 30% federal tax credit and the energy bill savings will start right away. The bad news is your loan payments will be higher than those energy bill savings, so you'll end up spending about $167/month for solar in the first year. That difference will come down each year as electricity prices rise, but your system will keep on producing about the same amount of electricity.

Solar Loan
25-year energy costs

Before solar loan: $60,294
After solar loan: $46,374
Solar loan savings: $13,920

Here's how you save with a solar loan:

  • The average 8.5-kW system costs about $30,600 to install. That's how big your loan should be.
  • Your monthly electric bill savings will be about $91, but your loan payments will be $234, meaning you'll save/spend $143 per month with/on solar
  • Then at the end of the first year, you earn a $7,956 Federal Solar Tax Credit, leaving you $6,239 ahead!
Keep in mind, the numbers above are based on an average home in Alaska. If you're ready for a custom quote for a solar loan, our network of experts are on call to assist you. Simply sign up for personalized assistance on our special solar deals page.

How should you pay for solar?

Use our decision tool to find out!

Select below:

Alaska Solar Policy Information

Ever wonder why solar seems to be everywhere in some states, but not in others? We did too.

State legislatures and public utilities commissions can enact rules to make solar power accessible for everyone. Favorable rules explain why some of the cloudiest states—New York, New Jersey, and Connecticut, are doing so well with solar, and yet some of those with the most natural solar resources—like Alabama, Mississippi, and Georgia—are doing so poorly.

Below is important information about the public policy, rules, and economic reasons that affect your ability to go solar here in Alaska:

Alaska's Renewable Portfolio Standard grade

Alaska's Renewable Portfolio Standard

None Grade: F

A Renewables Portfolio Standard (RPS) is a law or other piece of regulation that mandates that a certain percentage of a state’s energy production comes from renewable resources by specified target dates. A strong RPS is important because it forces utility companies to promote conversion to renewable energy. That generally means free money for you in the form of solar power rebates and performance payments when you make the switch.

Unfortunately Alaska lacks any state or local Renewables Portfolio Standards. As we’ve seen in other states that lack an RPS, no targets (and no penalties for missing targets, i.e. compliance fees) for renewable energy production has translated into very little being done to promote solar power here.

Learn more about Renewable Portfolio Standards
Alaska's Solar Carve-out grade

Alaska's Solar carve-out and SRECs

None Grade: F

No RPS means no solar carve out.

Learn more about Solar Carve-outs
Alaska's Electricity cost grade

Alaska Electricity Prices

$0.22/kWh Grade: A

Alaskans pay quite a bit more than the national average for electricity, and those rates are rising. Alaska’s average electricity price is 22 cents/kWh; well above the national average of 13.6 cents/kWh. That means while you currently see larger bills, you could be seeing bigger savings!

Higher electricity prices means greater opportunity to save money by producing your own clean, earth-friendly solar power. Not to mention the fact that the rising environmental costs and dwindling supplies of fossil fuels is going to lead to even faster rises in energy prices, likely sooner rather than later. When energy prices start going up and up (and up), you’re going to be saving more and more (and more) money for making the switch to solar now.

Find out why electricity prices matter
Alaska's Net Metering grade

Alaska Net Metering

Offered statewide Grade: D

Net metering requires your utility to monitor how much energy your solar power system produces and how much energy you actually consume to make sure you get credit for the surplus.

Unlike many states, Alaska has statewide net metering standards in place. Utilities are required to offer net metering to all systems up to 25 kW. All surplus energy is credited to your next month’s bill at the retail rate, and all credits may be carried over indefinitely.

That’s a pretty great net metering law for residential customers. We gave net metering a “C” overall only because of the system size limit. We’d like to see that 25 kW cap raised significantly to allow commercial, industrial and other high-demand customers to meet all on-site electricity generation needs through solar power.

Learn more about net metering
Alaska's Interconnection Standards grade

Alaska Interconnection Rules

None Grade: F

In 2011, the Regulatory Commission of Alaska (RCA) passed uniform guidelines to connect your solar panels to the grid. While the RCA’s standards are not the fullest we’ve seen, they do lay a foundation for getting you onto the grid.

Each utility is required to draft a standard interconnection agreement of no more than two pages. A utility may require a customer to have liability insurance if the insurance is easily available at a reasonable cost, but the utilities can not require you to install an external disconnect switch. Here again we’d like to see the 25 kW system size limit raised to allow for larger customers to take advantage of net metering savings.

Learn more about solar interconnection rules
Select below:

Alaska Solar Incentives

Next to high electricity prices and net metering, solar incentives have traditionally been the most important factor for whether home solar power makes financial sense in a state. In the past, some states with otherwise lousy policy had tremendous incentives that drove down the up-front cost of going solar so much that homeowners could save oodles of money even without net metering or a good RPS.

These days, the big incentive most people can get is the Federal Solar Tax Credit that earns you 26% of your total system costs back after just 1 year. State incentives play less of a role than in the past, but some really good ones are still out there, ready to help homeowners go solar and save money before you know it.

Let's see how Alaska measures up:

The availability of state solar incentives for residential solar systems was sourced from the Database of State Incentives for Renewables and Efficiency, utility company websites, and the state public utility commission.
Alaska's Solar Rebates grade

Alaska Solar Rebates

None Grade: F

Without a Renewables Portfolio Standard, little has been done by the utilities companies to promote solar power and other renewable energy alternatives. The consequences of this legislative inaction can be seen in Alaska’s lack of rebates, tax credits, and widespread performance payments.

Learn more about solar rebates
Alaska's Solar Tax Credits grade

Alaska Solar Tax Credits

No State Income Tax Grade: C

Since Alaska doesn’t have any income tax, there aren’t any solar tax credits to redeem! Luckily, you will still benefit from the 26% Federal Solar Tax Credit. There's no cap on the federal tax credit and fortunately for Alaska, having no state rebate to deduct means a larger tax credit coming your way. Sample calculations follow below -- keep scrolling!

Learn more about state solar tax credits
Alaska's Solar Property Tax Exemptions grade

Property Tax Exemption

Local Option Grade: C

Amid the cold empty plain of (missing) solar power incentives, there is one lonely piece of legislation that authorizes municipalities to exempt residential solar power systems from taxation, i.e. exempts the value the solar power system adds to your home from being counted in property tax calculations. Note that we said the state legislation authorizes municipalities to exempt your solar power system from property taxes. The law does not require that municipalities do so. Be sure to ask the expert installer we partner you with about whether or not your town offers such an exemption.

Learn more about tax exemptions for solar
Alaska's Solar Sales Tax Exemption grade

Sales Tax Exemption

No State Sales Tax Grade: A

One of the simplest ways for state legislature to encourage small scale clean energy adoption is to declare solar panel equipment exempt from state sales taxes as many other progressive states have done. Fortunately for Alaska, there is no sales tax to begin with. Party on!

Learn more about tax exemptions for solar
Alaska's Solar Sales Tax Exemption grade

Low-income Solar Programs

None Grade: F

Alaska has no programs to help low- and middle-income homeowners go solar. Maybe the legislature should get to work on that!

Learn more about low-income solar programs available in the U.S.

The consensus on Alaska solar power rebates and incentives

Despite high electricity costs nearly screaming for an efficient (and clean) option like solar power, solar policy here is sadly lacking. It all starts with the RPS, and just like every other state we’ve seen without minimum targets for renewable energy production, Alaska has done little to nothing to promote solar power. With payback timeframes and year 1 discounts lagging, the best Alaska can pull is a C grade.

15
Leave a Reply

avatar
13 Comment threads
2 Thread replies
0 Followers
 
Most reacted comment
Hottest comment thread
14 Comment authors
RandyTerry Allen Buffo Sr.kayPatrick KilhofferSteven Recent comment authors
  Subscribe  
newest oldest most voted
Notify of
Terry Allen Buffo Sr.
Guest
Terry Allen Buffo Sr.

What would happen if you were to install magnifying sheets above a solar panlies. Would it increase the sun lite to your solar panels.

kay
Guest
kay

is it possible for panels to charge in the few hours of daylight we have in Alaska, where the sun never comes over the horizon?

Anonymous
Guest
Anonymous

In Alaska we do not get the oil for cheap, they ship it out and we have to buy it back. Gas prices are also very high here. Investigate before you just say things like that.

Patrick Kilhoffer
Guest
Patrick Kilhoffer

The high gas prices make solar an even better deal, compared to using generators, so be sure and install enough solar panels that you don’t have to use the generator at all during the summer months at least. If you are grid connected, the great news about grid connection in Alaska is you can generate all your electricity for the year, at any point in the year and use the electricity whenever you want to. Right now solar in Alaska is about like buying a CD that pays 7%, which is awesome! But it gets even better when Alaskan utilities… Read more »

Steven
Guest
Steven

I got a Solar Power plant system installed recently (Jan of 2013). Here are the results: I have 12 250w panels on my roof – facing south – and they generate up to 3kW. We got a 16 pack battery back up (20-40 hours of power – depending on what’s used) and a generator. I got the batteries so that when the sun goes down (20+ hours in winter) I have power. I got the generator so that I can charge the batteries. We installed LEDs for energy savings – btw they work GREAT. Here in Fairbanks we went from… Read more »

Randy
Guest
Randy

Interesting, where are the economics for the capital investment and payback factored in? I suppose if government can fund 80% of the outlay there might be an incremental advantage…

aknate
Guest
aknate

I am using solar in Alaska and love it. You can see pictures of my panels here: http://green-sustainable-living.com/index.php/solar/ If you install panels remember you will need to clean snow off of them so keep them close to the ground or on a deck, etc.

'sNo Rest
Guest
'sNo Rest

I live off grid on a solar system with back up genset and battery bank. I love it! We have all the modern amenities and you’d never know we were off grid if you didn’t see our solar array and tracker out back. We also have a farm and run everything we need off that little setup. Unobstructed southern exposure is key.

Lana Cox
Guest
Lana Cox

Since there are places that have a limited amount of sun throughout the day, I was wondering how to make a machine or something that could probably store solar energy for later uses, without burning fossil fuels.

Diane
Guest
Diane

Alaskans pay more than the average per gallon of gas than any other state. Who gets all that oil money?

Brent Olsen
Guest
Brent Olsen

Solar power is certainly the route to independence from foreign oil and utility companies. The wind turbines produced by Scott Steven’s company (see prior post)are completely inadequate and unreliable to provide the kind of sustainable power needed. Perhaps that is why Alaska requires a minimum output from alternative energy sources. Hence the reason Alaskans buy solar panels, rather than poorly designed wind turbines. Solar panels provide a far greater return on investment than the wind turbines sold in Wasilla.

scott stevens
Guest
scott stevens

Hello, My company manufactures wind turbines in Wasilla, Alaska. We build over 200 units a month and Alaska’s government has made it so tough letting utility companies require unreasonable minimum requirements, unreasonable compensation for energy sold. We believe here that a kwh is a kwh reguardless if it’s from oil or gas. However shouldn’t the kwh if available be used from a wind turbine or solar panel before it’s used from oil and gas or atleast an equivalent cost if sold back? We can’t even get the same for a kwh sold from a wind turbine to be equal to… Read more »

Miranda
Guest
Miranda

My comment is really just a question…..
My question is if and when we do get an alternative resource lets say like solar energy where in Alaska can we use it?

Mike
Guest
Mike

Governor Palin’s crowing achievement is energy policy?

I guess the radiation up there is not great, and they get cheap oil, so it makes sense.

Kevin Smith
Guest
Kevin Smith

My name is Kevin Smith and I have a interest in solar alternative energy’s jobs in the Alaska area. I have a lot of electrical/Mechanical experience. Do you have any recommendations?

Solar Power Rocks is a Wave Solar company

Wave Solar Logo