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Welcome to the Ultimate Guide to Home Solar Panels in Alaska

Solar Power in Alaska

Solar power in Alaska? Are we crazy? Don't we know the sun doesn't shine much here for months at a time?

Yes, we know all that, but we'd argue there's still a place for solar panels in Alaska, and that place is on your roof. See, electricity is expensive as heck in Alaska, and solar panels can help you save money, at least when the sun is shining. And we all know protecting Alaska's natural beauty is important, so why not consider adding solar panels and helping reduce the amount of coal pollutants in the air?

Now, you can see from the chart here that your investment in Alaska solar won't return as much money as in some of the states in the lower 48... but at least your investment in solar here beats one in Louisiana! That place needs help.

Why are some cloudy states better? Good solar policy matters! Lawmakers and regulators in some states have passed laws that support your right to own solar panels and save money! Check out the solar policy section below for more info on your state's solar laws.

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.

Generate an accurate online solar estimate for your home

Alaska Solar Power Report Card

Every home is unique. Find out how much you can save with solar in Alaska

Solar power installation cost, energy production and solar savings change from home to home. Therefore, generic information about solar panel installation cost and solar savings is of little use to homeowners considering solar. This is why we provide the estimator above because it takes all of the characteristics of your roof and location into account to provide you with a very accurate and personalized solar cost an savings estimate that is likely to be 95+% accurate.

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Are Solar Panels Worth it in Alaska?

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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.

Not going solar in Alaska is EXPENSIVE, because electricity in Alaska is expensive. Check out how much you stand to pay the utility comany over the next 25 years:

The cost of your electricity over the next 25 years without solar:

*assumes average cost/kWh 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

Choosing to purchase a solar panel system in Alaska will cost some money up front but result in long-term savings. Although not getting much sun for half the year means it does take a while for solar panels to pay their cost back.

Unless you're pretty committed to the environment or pretty handy with electricity, construction and filling out forms, (read "able to DIY"), solar isn't an amazing invetment here like it is in other states. But don't believe solar can't work for you just because you live in the northernmost reaches of human habitat. The average Alaska homeowner can see long-term benefits from a solar installation.

The cost of your electricity over the next 25 years with solar:

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

$46,374

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 Alaska 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

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Solar Loans in Alaska

Should you 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.

Should you take a solar loan in Alaska? Well, that depends. Can you get one from a bank?

Alaska isn't like other states when it comes to solar loans, because it'll probably be pretty hard for you to find an installer that works with one of the big financing companies like Mosaic or Greensky. That's why we recommend a HELOC to pay for solar. You'll have to fill out a lot of paperwork, but all that work means good rates and flexible repayment.

Below is an example of how the financials work for a solar system purchased with a HELOC in Alaska.

Solar Loan
25-year energy costs

Before solar loan: $60,294
After solar loan: $57,909
Solar loan savings: $2,385

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 spend $143 per month on solar.
  • Then at the end of the first year, you earn a $7,956 Federal Solar Tax Credit, leaving you $6,239 ahead!
  • Your solar loan will be paid off after year 15, and then the real savings start! The total net savings after 25 years from an average solar loan in Alaska (bill savings and incentives minus loan cost), is $2,385.

Generate an accurate online solar estimate for your home

How should you pay for solar?

Use our decision tool to find out!

Alaska Solar Incentives and Policy

Use the buttons below to learn about the solar incentives available to homeowners in Alaska, as well as the laws and regulations your state government has put in place to help you go solar.

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

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 last word on Alaska solar power, incentives, and policy

Look, we know the sun barely rises above the horizon for months at a time here. But despite the harsh reality of axial tilt, even Alaska homeowners can save with solar. It would be nice to see some support from the state government here, and without it the aforementioned savings are small.

We’d love to see a 100% RPS law here, combined with some cash incentives for people who want to install solar panels on their homes. After all, the harsh northern environment would be a perfect place to put up some microgrids and reduce the need for long transmission lines. Solar can’t keep the whole state powered in the wintertime, but it sure as heck beats a smoke-belching coal plant when the sun is out.

15 thoughts on “2020 Alaska Solar Panels Guide | Cost, Savings, and Incentives

  1. Avatar for Terry Allen Buffo Sr. Terry Allen Buffo Sr. says:

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

  2. Avatar for kay kay says:

    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?

  3. Avatar for Anonymous Anonymous says:

    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.

    1. Avatar for Patrick Kilhoffer Patrick Kilhoffer says:

      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 will be required to buy Solar RECs in the future, your return could be much much higher! So take the 7% return and run with it!

  4. Avatar for Steven Steven says:

    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 $220 to $180. My wife and I don’t have kids (energy wasters! lol) and are rather anal about turning off lights. Even so – we saved 15-20% going to LEDs.

    Our 12 panels have reduced our energy usage more and more as winter has moved on to spring. Our most recent bill, covering the Feb 21 – Mar 21 (2013) Billing Period was $130. We fully expect that by summer, with 18-22 Hours of daylight, we’ll be down to below $100 (easily).

    As one person mentioned – yes, you have to wipe of the panels on a regular basis during winter or snow will wreck your solar power harvest.

    We plan to get 12 more panels this summer – our goal is that 5-7 months out of the year to be energy independent.

    It’s great – the system (with 24 panels), batteries, and gennie was $35k including installation.

    One note: GVEA is a pain in the butt as far as putting in their meter to register for the SNAP program – they are not being “unusual situation” (solar) friendly – but, if you deal with it, it’s fine.

    Hope my info has been helpful.

    1. Avatar for Randy Randy says:

      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…

  5. Avatar for aknate aknate says:

    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.

  6. Avatar for 'sNo Rest says:

    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.

  7. Avatar for Lana Cox Lana Cox says:

    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.

  8. Avatar for Diane Diane says:

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

  9. Avatar for Brent Olsen Brent Olsen says:

    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.

  10. Avatar for scott stevens scott stevens says:

    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 a purchased kwh from gas not that the wind turbines dont produce it cheap enough as ours do it at 3cents a kwh but the electrical companies do not recognize it as a full kwh credit only partial. Example we pay 13cents a kwh currently and if we sell a kwh back from our wind generator they only have to pay us 4 cents a kwh. Shouldn’t we atleast get wholesale rate of 6 cents a kwh? I say coop’s should be forced to buy power from there own customers as a community power company. Before they choose outside companies instead. As long as the power is the same price or less.
    Perhaps then we would sell more than 2 wind turbines a month to Alaskan’s and over 198 turbines to other states.

  11. Avatar for Miranda Miranda says:

    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?

  12. Avatar for Mike Mike says:

    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.

  13. Avatar for Kevin Smith Kevin Smith says:

    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?

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