Alabama has solar power potential, but lags in adoption

by Sydney Cromwell

A wealth of energy resources shines down on Alabama most days of the year.

“We’re not the Sunshine State, but we share the border,” said Ron Holland of Solar Technology Alabama.

Yet, Alabama trails much of the Southeast, and the rest of the country, in adopting solar power, particularly for home and small business owners.

“Alabama is severely behind when it comes to renewable energy generation,” said Keith Johnston, director of the Southern Environmental Law Center’s Alabama office.

Clean energy development has “massive support, overwhelming support across the board” in the state, according to Daniel Tait, chief operating officer of the nonprofit Energy Alabama. And in a state with the third-highest residential electricity consumption in the country, having sources of affordable, sustainable energy matters.

So what’s keeping Alabama in the dark on solar power?

THE SOLAR SOUTH

Georgia and Alabama are similarly sunny states. Despite this, Georgia is ranked 10th in the nation for solar industry growth, while Alabama sits at 28th (and this is an improvement — in 2020 Alabama had the least growth of any state).

“We still have a climate here in Alabama that’s well-suited to solar production,” said Paul Freeman, sales director of Eagle Solar and Light.

Florida and North Carolina are also in the top 10, and South Carolina is not far behind. All of these states outpace Alabama in solar installations and industry jobs, according to the Solar Energy Industries Association (SEIA).

As of fall 2021, Alabama has about 578 megawatts (MW) of solar panels and gets about 0.28% of its electricity from solar energy, according to SEIA. Around 480 people in the state work in the solar industry.

By contrast, Georgia, Florida, North Carolina and South Carolina each have thousands of megawatts’ worth of solar arrays, as well as thousands of solar jobs.

“Embracing solar is going to create jobs,” Freeman said.

Solar power generation is increasingly becoming a bargain for utility companies. Alabama’s jump from 50th to 28th in solar industry growth has been almost entirely driven by large, utility-scale solar arrays.

In particular, the largest solar array in the state opened in Muscle Shoals in fall 2021 to provide power to Facebook’s data center in Huntsville. The array can produce 227 MW, which accounts for about 40% of Alabama’s solar energy production. 

Other major solar projects include AL Solar A in LaFayette (79.2 MW), the River Bend Solar Energy Center in Lauderdale County (75 MW), Fort Rucker (10 MW), Redstone Arsenal (10 MW), Anniston Army Depot (7 MW) and Toyota Alabama in Madison County (1.6 MW).

Several utility-scale solar arrays are also being developed or considered for Alabama:

• Black Bear Solar in Montgomery (130 MW), which will provide power to the Alabama Municipal Electric Authority
• A 150-MW solar project in Hollywood, to supply power to a Google data center
• Letohatchee Solar Project in Lowndes County (80 MW), a collaboration between Alabama Power and Mercedes-Benz
• A Tennessee Valley Authority (TVA) solar farm in Lawrence County, which is still in the planning phase

Meanwhile, only a small percentage of the state’s solar installations have been rooftop panels for homes or small businesses — in fact, Alabama only exceeds North and South Dakota in the number of these types of projects.

Renewable energy advocates say this is because Alabama has too many barriers between its citizens and solar power.

“Everything that you could do to grow an industry, we don’t have,” Tait said.

“BOATLOAD OF REGRESSIVE POLICIES”

The desire for renewable energy, as well as energy independence, is not lacking in Alabama, according to Freeman.

“Most folks are very interested. They’re almost always very enthusiastic at producing their own energy,” he said.

Eighty-one percent of Alabamians strongly or somewhat support clean energy development in the state, according to an online survey conducted by Public Opinion Strategies in fall 2021. That support was high across the political spectrum. Additionally, 83% felt that more renewable energy would improve Alabama’s economy.

“It will make the difference in our future” to get serious about solar investment, Holland said.

The same survey found that a majority of people believe the state’s government and public utilities should be leading the way in clean energy development. The reality, however, is a “boatload of regressive policy,” Tait said.

Alabama is one of 13 states that does not have standards or goals set for its renewable energy portfolio, according to the National Conference of State Legislatures.

“Everything that you could do to grow an industry, we don’t have.”

Daniel Tait, Energy Alabama

Many states have enacted policies to support the growth of solar power or make it more affordable. For example, Georgia Power, Alabama Power’s sister company, has to meet solar power production requirements imposed by the state’s public services commission. Arkansas has passed laws to allow financing for solar projects and raise the kilowatt limits on commercial businesses with solar arrays.

“We don’t see that in Alabama. There’s just no movement whatsoever,” Tait said.

One of the biggest barriers is Alabama Power’s capacity reservation charge, an additional charge for customers who are connected to the power grid but produce part of their electricity from sources like solar or wind. Alabama Power says the fee is necessary to maintain infrastructure for backup power, but renewable energy advocates say it makes solar more expensive — and therefore less appealing.

“It reduces the economic payoff for solar,” Freeman said.

Alabama Power declined Southern Science’s interview requests.

Read more about Alabama Power’s capacity reservation charge and the ongoing lawsuit against it.

When a grid-connected solar array produces more power than a home currently needs, the owner can sell that excess electricity back to the power company, through a system called “net-metering.” However, Tait said Alabama Power’s net-metering rates, which vary between about 2.5 and 3.5 cents per kilowatt/hour, are lower than what they pay for wholesale electricity from other power generators.

“You’re only compensated at a fraction of the retail rate that you’re purchasing from the utility,” Freeman agreed.

While Blount County resident T.K. Thorne must pay Alabama Power $27 per month in capacity reservation charges for her 4kW rooftop array, she said she’s never received more than $2 back for a month’s worth of net-metering.

“They treat me like I’m some kind of energy production business that’s in competition with them,” Thorne said.

Low rates for net-metering are not uncommon. Georgia Power has a recent net-metering pilot program to test compensating customers at a higher rate for excess energy, though the program has been capped at 5,000 participants. Florida Power & Light, meanwhile, has made attempts to get rid of net-metering altogether.

AFFORDING ALTERNATIVE ENERGY

Aside from its environmental benefits, the appeal of self-generated solar power is obvious.

“Anybody appreciates reducing part of their monthly budget by 20%, 40%, 50% or better,” Freeman said.

For instance, Ferus Artisan Ales in Trussville, which installed a 125-kilowatt rooftop array in May 2021, is on track to save about $20,000 in electricity bills across the first year. The solar panels generate about 40% to 50% of the brewery’s electricity, according to Ferus staff.

And as solar power improves its technology and grows in popularity, the costs for rooftop solar arrays are declining.

“It can be affordable for homeowners and business owners. And the technology has gotten so good and the pricing has dropped so precipitously,” Johnston said.

However, the initial investment is hardly pocket change. The Center for Sustainable Energy estimates that installing a residential solar array costs $3 to $5 per watt, or $15,000–$25,000 for a typical 5-kilowatt rooftop system.

Tait said options like leasing or financing solar arrays can make solar power more accessible to people and businesses who can’t afford the entire expense upfront. Community solar arrays allow a group of customers to share the financial burdens — and benefits.

Incentive programs are another helpful solution, Freeman said. States like California, Texas, Minnesota and New York have rebates, tax credits and other programs offsetting the cost of solar panel installations, on top of the federal solar tax credit.

The Los Angeles Department of Water and Power and CPS Energy in Texas both have programs where homeowners can host rooftop solar panels in return for savings on their power bills, while the utility company pays for installation and maintenance.

“It can certainly be accessible for the average Alabama home or the business owner if you have the right policies in place to promote solar,” Johnston said.

Neither Alabama Power nor the TVA offer these types of programs, but they do sell renewable energy credits (RECs), which let homeowners indirectly use power produced by renewable sources for their homes’ electricity. The TVA also works with its affiliate power companies to support community solar, according to TVA spokesman Scott Fiedler.

OFF-GRID INDEPENDENCE

Holland, on the other hand, sees a different future for solar power. He believes net-metering and grid-connected solar arrays are “going the way of the dinosaur.”

Instead, he expects to see more Alabama customers interested in living fully off-grid, producing the entirety of their electricity supply.

“What solar can do that nobody else can do is provide reliable power in the long-term,” he said.

Holland’s company, Solar Technology Alabama, specializes in stand-alone systems that don’t have to stay connected to the power grid. Holland said he has lived off-grid for 10 years and likes having control over his power supply.

However, there’s more to going off-grid than finding space for a large solar array. It requires lifestyle changes that most people aren’t ready to make.

“We have essentially built a world that depends on the grid, and you can’t go without it,” he said.

With typical rooftop arrays and battery storage, “it is generally very easy for us to achieve 40 to 70% of the energy demand for a home or business,” Freeman said. His company, Eagle Solar and Light, has had a few off-grid customers.

“What solar can do that nobody else can do is provide reliable power in the long-term.”

Ron Holland, Solar Technology Alabama

Holland has only known a few people who fully disconnected from the power grid, and they had to give up some of their appliances to do it.

“If you were to define insanity, that would be building a big house, filling it with kilowatt-using appliances, and then complaining about your power bill,” he said. “… That’s how detached from reality we have become.”

Holland had to specially design his own house in order to lower its energy demands.

“It’s the most comfortable house I’ve ever lived in,” he said.

He said he meets plenty of people who are interested in solar, but don’t understand how it works or its limitations. Some have wanted to install panels on rooftops covered by shady trees.

“I’m an engineer, not a magician,” Holland said.

But within those limits, he said, grid-connected and off-grid solar systems can provide families with more resiliency and control over their power supply.

“The reality of solar is beautiful when you understand what it can do, how it does it,” Holland said.

THE SUN KEEPS SHINING

Advocates for renewable energy say that more investment in solar power, from rooftop panels to massive power-company arrays, can bring jobs and utility savings to Alabama. It can also lessen the environmental impacts of fossil fuels.

But the conditions have to be right.

“Sometimes folks are not quick to accept change, so changing from the way they know it is sometimes a small hurdle,” Freeman said.

Meanwhile, a nearly-inexhaustible power source continues to beam down on Alabama.

Main article image courtesy of Ferus Artisan Ales.