In Alabama, a 7.5-kW system for an average home costs about $28,574 after incentives in 2026, saves about $857 in the first year and pays back in more than 25 years.
| Item | Amount |
|---|---|
| Solar, 7.48 kW × $3.82/W | $28,574 |
| Federal credit (0%) | $0 |
| Net cost | $28,574 |
| Scenario | Net cost | Year-1 savings | Payback | 25-yr net |
|---|---|---|---|---|
| State averages (above) | $28,574 | $857 | 25+ yr | -$1,403 |
| Rates rise 5.6%/yr (2020–25 pace) | $28,574 | $857 | 21.5 yr | $7,720 |
| Rates stay flat | $28,574 | $857 | 25+ yr | -$8,377 |
| Survey price $3.6/W (LBNL) | $26,928 | $857 | 24.8 yr | $242 |
| Add 13.5-kWh battery | $36,174 | $1,429 | 19.6 yr | $13,687 |
| Size to 100% of use instead | $40,339 | $1,210 | 25+ yr | -$1,981 |
Verdict: at average Alabama numbers, solar is hard to justify on savings alone in 2026 — payback takes more than 25 years, leaving you $1,403 short after 25 years. The main reasons: export credits below retail (net billing, exports earn 3.25¢/kWh), so only the solar you use yourself earns full value. Unless your quote comes in well below the state average or your rate is higher than average, it makes more sense to cut usage first or wait for better export terms.
Net metering and exports in Alabama: No statewide net metering; Alabama Power buyback ~3.33¢ peak / 3.16¢ off-peak (Oct-May).
Battery: a 13.5-kWh battery at the Alabama average of $563/kWh adds $7,601 and shifts about 4,435 kWh a year from low-paid exports to your own use; payback becomes 19.6 years.
EnergySage's Alabama page lists a 24.2-year payback. Its method is not fully published; ours uses EIA's Jan–Aug 2026 price, 40% self-use and the state's export credit, 3%/yr rate growth and 0.5%/yr panel aging, with no federal credit.
The full method, material data and tips are on the main solar payback calculator page.