Federal Judge Rules That AL Power Solar Fee, Among Highest In US, Can Remain; Their Residential Rates Highest In US

In Alabama, a years-long battle over one of the nation’s highest backup fees for residential solar customers may have finally come to an end. A federal judge ruled last week that Alabama Power can continue charging its small solar customers one of the highest standby charges in the nation, dismissing a lawsuit that argued the fee was illegal under the Public Utility Regulatory Policies Act.

“I am frustrated that Alabama Power solar customers like me have to pay an extra monthly fee in order to reduce our power bills,” Mark Johnston, one of the plaintiffs, said in a news release after the ruling. Solar advocates in Alabama say the fee, which charges customers with an average residential solar array around $39 per month, significantly stifles the residential solar market in the state by nearly doubling the payback time for a solar installation.

Alabama ranks 51st in residential solar capacity among U.S. states plus Puerto Rico and the District of Columbia, trailing only North Dakota, according to the Solar Energy Industries Association, a solar industry trade group. Per capita, Alabama ranks last. Alabama Power, which provides power to roughly two thirds of the state, charges its customers that generate their own electricity a monthly fee of $5.41 per kilowatt of capacity installed. The average size of a U.S. residential solar array in 2024 was 7.2 kilowatts, according to the Lawrence Berkeley National Laboratory. The fee would add $38.95 each month to the customer’s bill regardless of how much electricity the customer consumes or puts back on the grid.

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Alabama Power has come under increased scrutiny for its high power bills in recent months. An Inside Climate News investigation found that Alabama Power had the highest total residential power bills in the country in 2024, and the highest electricity rates in the Southeast.

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https://insideclimatenews.org/news/31032026/alabama-power-solar-fee-ruling/