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How To Save Money on Solar In Alaska: The Complete List

solar in alaska

How To Save Money on Solar In Alaska: The Complete List

It comes as no surprise to Alaskans that the state has one of the highest energy costs in the country. This makes it even more curious that the Last Frontier hasn’t started pushing for renewable energy. Despite dark winters and large gaps between major cities, homeowners in Alaska are in a position to save thousands of dollars with a solar panel system.

Over the course of 20 years, Alaskans can expect an average net saving of over $16,000. But with the upfront price of an array, many might hesitate to make the switch. If you’re looking for ways to lower the price of a renewable energy system, we’ve got you covered. Here are the best ways to save money on solar in Alaska.

How to Save Money on Solar in Alaska: Overview

Before you start shopping for solar installers, it’s essential to know that utilizing federal, state, and municipal incentives can substantially drop the cost of an installation. While programs differ from state to state, a few opportunities look standard across the board. These include:

  • Federal solar tax incentive,
  • State tax credits and rebates,
  • Net metering,
  • Renewable Portfolio Standard (RPS),
  • Property tax exemptions,
  • Sales tax exemptions,
  • Performance payment programs.

Let’s review each category to see how people can save money on solar in Alaska.

Federal Tax Incentive for Solar in Alaska

Homeowners in Alaska can take advantage of a 30% return on their federal taxes for their purchases of a solar panel system between now and 2032. The incentive drops to 26% in 2033 and 22% in 2034. This gives Alaskans plenty of time to consider a renewable energy upgrade. 

In order to qualify for the federal solar tax credit, a few prerequisites exist:

  • The resident must own the photovoltaic (PV) system (no leasing or renting).
  • The resident must reside in the home for which the system is installed.
  • PV system must be a new component without previous installation.

Alaskans that qualify for the federal incentive can write off several components of the installation, including any panels and equipment, labor costs, storage devices, and sales taxes.

Does Alaska Have Tax Credits or Rebates for Solar?

A state tax credit is an incentive offered by the state for any purchases related to solar energy, similar to the federal incentive. This would reduce the amount owed to the state, and would not affect the federal credit. Currently, Alaska does not provide its citizens with any credits.

A solar rebate comes back to the resident as a subsidy for their installation. This would drop the initial price of the solar array, which would affect the federal tax credit. Alaska does not offer rebates on solar purchases at this time.

Does Alaska Have Net Metering for Solar?

solar in alaska
With net metering, the homeowner is only billed for the “net” energy used each month.

Net metering is a regulation that allows citizens to sell excess power to the municipal utility company. Alaska started its net metering program in 2010, allowing those with solar systems of 25kW or less to connect to the grid. Residents can sell their excess energy to their municipalities for a refund, with utility companies required to purchase up to 1.5 percent of their average load.

Does Alaska Have a Renewable Portfolio Standard?

A Renewable Portfolio Standard (RPS) is a state-proposed guideline to support renewable energy. We can use a state’s RPS to infer the direction of its future solar investment. Alaska currently does not have an RPS, which suggests that power companies aren’t inclined to adopt renewable energy.

The state of Alaska also does not have a solar carve-out. This is a plan that guarantees that a portion of a state’s energy will come from solar. Without an RPS, there is no guarantee that Alaska will invest in solar energy.

Does Alaska Have Property Tax Exemptions for Solar?

Although Alaska does not have a statewide property tax exemption, it does allow individual municipalities to govern their own rates. This suggests that each city in the Last Frontier could offer an exemption on solar panel systems installed on your property.

Does Alaska Have Sales Tax Exemptions for Solar?

Fortunately for Alaskans, the state does not collect a sales tax. This means that homeowners won’t have to pay their state government for solar purchases. While this substantially reduces the overall cost of an array, it also drops the total amount of the federal tax credit.

Does Alaska Have Performance Payment Programs?

Alaska does not have a great performance payment program at the moment. The Golden Valley Electric Association rewards participants for producing a certain amount of solar energy, but membership costs and lack of funding make it financially unwise. And with Alaska lacking an RPS, it’s unlikely that the program will excel in the near future.

Should I Buy or Loan Solar Panels?

Monocrystalline vs Polycrystalline
Solar panels can be purchased through solar companies, which are certified to install products from top manufacturers.

Homeowners in Alaska should seriously consider their choice to loan or rent their solar array. While this decision can lower the upfront cost as well as eliminate maintenance fees, it also disqualifies most incentives (including the federal tax credit).

Currently, there are no leasing options in Alaska, but if the regulations changed in the coming years, they could find themself out a noticeable amount on their investment.

Solar Incentives in Alaska: Summary

IncentiveBenefit
Federal Tax Incentive30% return on equipment, installation, etc
Alaska Tax Credits / RebatesNone/none
Net MeteringNet metering credit up to 1.5% standard load
Renewable Portfolio StandardNone
Property Tax ExemptionMunicipality-based
Sales Tax ExemptionStatewide exemption
Performance Payment ProgramPoor 

How to Save Money on Solar in Alaska: Further Reading

If you’re looking to save money on solar in Alaska, there’s a surprising amount of benefits available. Although the state doesn’t promote the alternative energy, it’s worth considering as an upgrade. For more on the solar industry, check out the articles below.

Frequently Asked Questions

Do you actually save money going solar in Alaska?

Despite the lack of support on the state level, Alaskans can save over $16,000 on their electricity bill with a solar array over the course of their lifetime.

How long does it take for solar panels to pay for themselves in Alaska?

In Alaska, the average homeowner can pay for the cost of a solar panel system with their utility saving in 9.4 years.

How much do solar panels cost in Alaska?

The average price of solar panels in Alaska is $2.41 per watt. This suggests that a standard 6kW system would cost about $14,460 before incentives.

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