There are several government incentives available to help you lower the cost of buying and installing a photovoltaic (PV) system for your home.

  1. You’ll get a Federal tax credit of 30% of the cost of the residential PV system. All the Federal incentives involving renewable energy systems and energy conservation measurements can be found at the Database of Incentives for Renewables & Efficiency (DSIRE) website.
  2. If you live in the area served by the Tennessee Valley Authority (TVA) that includes northern Alabama and Tennessee you can get a $1,000.00 direct rebate on the cost of the residential PV system. This is true under the TVA’s renewable energy program called Generation Partners and will remain true under the new program that will replace it in October 2012 called Green Power Providers.

To see all the incentives available for renewable energy and energy efficiency go to the DSIRE website for Alabama or for Tennessee.

Once a PV system is installed in your home, your utility company will buy the electricity that your PV system generates but is not used by your home. This is true only for a grid-tied PV system and not for an off-grid system. The price at which your excess electricity will be bought depends on whether you live in the area served by the TVA or by Alabama Power. The energy that a PV system creates is the power that the system produces multiplied by the duration the system is active and is measured in kiloWatt-hours (kW-hr). A 5 kW system that is active at full capacity for one hour will produce 5 kW-hr of electricity. A home in Alabama will typically use anywhere from 500 to 1,500 kW-hr of electricity per month depending on your electricity usage.

  1. If you live in the area served by the TVA, the current program is called Generation Partners. The TVA will buy the electricity of approved residential PV systems at the retail rate + $0.12 per kW-hr. The Generation Partners program is active until September 30, 2012 and then will be replaced by a similar program called Green Power Providers. For the remainder of 2012 the Green Power Providers price will be $0.12 per kW-hr. A new premium price will be established after that. Under Green Power Providers, the TVA will guarantee that it will buy your electricity for 20 years and will pay the premium price at the time the contract is signed for 10 years, after which the price could change.
  2. If you live in the area served by Alabama Power (central and southern Alabama) the price depends on the option the customer chooses but will be somewhere between $0.0315 to $0.0483 per kW-hr. For questions about Alabama Power’s renewable energy program see their Frequently Asked Questions.

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