Main page Knowledge base Solar Cost and Financing Alaska’s Key Solar Incentives: A Breakdown

Alaska’s Key Solar Incentives: A Breakdown

Alaskans are turning to sustainable and renewable energy sources more than ever, and with the rapid decline in solar equipment prices, the barrier to entry is becoming significantly lower.

Alaska may not be the first place that comes to mind when considering solar energy, but the state’s unique climate and energy landscape provide compelling reasons for homeowners and businesses to explore solar power. Despite its long, dark winters, Alaska benefits from extended daylight hours during the summer months, which creates an opportunity for effective solar energy generation. To make solar more accessible and affordable, Alaska offers a combination of federal and state-level incentives, as well as local utility programs. This article provides a breakdown of the key solar incentives available in Alaska and how they can help residents make the most of solar power.

The Residential Clean Energy Credit

The Residential Clean Energy Credit, previously known as the Federal Investment Tax Credit (ITC), can reduce the cost of your solar panel system by 30%. This incentive covers the entire system, including equipment, labor, permitting, and sales tax.

To claim this incentive, you need to purchase your system with cash or a solar loan, as leasing does not qualify for the ITC. You must have a sufficient federal tax liability to use the credit, though any unused portion can be rolled over year-to-year until the ITC expires at the end of 2034. Direct payment of the ITC is only available to tax-exempt entities, such as nonprofit organizations.

Net Metering

Alaska’s net metering regulations, established by the Regulatory Commission of Alaska in 2010, pertain to renewable energy systems of 25 kW or less. These regulations mandate large utilities to procure up to 1.5 percent of the utility’s average load from customers who install projects. (The Homer Electric Association recently opted to raise this cap to 3 percent).

Customers receive compensation equivalent to what the utility saves on fuel and operations costs for generating electricity.

The quantity of customer-installed projects, notably solar photovoltaic systems, is beginning to rise rapidly, with at least one utility anticipated to reach the 1.5 percent cap set by the Regulatory Commission of Alaska (RCA) around 2022.

Solar for All

  • The Community Power Coalition (CPC), led by Inclusive Prosperity Capital, Inc., will enhance the US Department of Energy’s National Community Solar Partnership and Community Power Accelerator program through its SFA initiative, “Powering America Together.” The program aims to develop low-income community solar projects, reduce carbon emissions, lower energy costs, and promote quality jobs, community wealth-building, energy resilience, and equitable workforce development. 
  • The Alaska Energy Authority, in partnership with the Alaska Housing Finance Corporation (AHFC), will deploy solar photovoltaic infrastructure across the state. This initiative includes urban residential installations and community-scale projects in rural areas. The program aims to reduce greenhouse gas emissions statewide while providing low-income and disadvantaged communities with access to renewable energy sources.
  • The Alaska Tribal SFA is a collaborative effort between Tanana Chiefs Conference (TCC), the Alaska Native Tribal Health Consortium (ANTHC), and Alaska Housing Finance Corporation (AHFC) to provide comprehensive solar access to Tribal residents across Alaska.  The program ensures that all Tribal members, whether they own homes capable of supporting distributed generation or live in communities reliant on small isolated microgrids, can benefit from solar energy.

Renewable Energy Fund (REF)

Alaska’s Renewable Energy Fund (REF) provides financial support for renewable energy projects, including solar power systems. Established in 2008, the REF is aimed at increasing the use of renewable energy across the state, particularly in rural and remote communities where energy costs are high. The fund offers grants to help cover the costs of renewable energy projects, including solar installations, to reduce reliance on expensive imported fuels like diesel.

While the REF primarily focuses on larger community-scale projects, individual homeowners and businesses can benefit from the overall push for renewable energy by joining community solar programs or taking advantage of the fund’s support for local renewable energy initiatives.

Utility-Specific Incentives and Rebates

Alaska has several local utilities that offer solar incentives and programs to help residents transition to renewable energy. Some of these programs include:

  • Chugach Electric Association: Chugach Electric, one of the largest utilities in Alaska, offers a net metering program that allows solar customers to offset their energy use with solar-generated electricity. In addition to net metering, the utility periodically runs incentive programs to encourage solar installations, such as rebates or reduced fees for grid interconnection.
  • Golden Valley Electric Association (GVEA): GVEA serves Interior Alaska and offers its members a net metering program. The utility has also introduced renewable energy initiatives to support solar adoption, including educational resources for customers interested in installing solar panels.
  • Alaska Village Electric Cooperative (AVEC): AVEC serves rural communities and offers support for renewable energy projects, including solar power. The cooperative works to reduce the cost of energy in these remote areas by incorporating renewable energy sources, making it easier for residents to access affordable energy alternatives.

While Alaska’s solar incentives may not be as extensive as those in other states, the combination of federal tax credits, net metering policies, utility programs, and community solar projects makes solar energy a viable option for many residents. Alaska’s Renewable Energy Fund and the efforts of local utilities help address the unique challenges of the state’s remote and rural areas, providing opportunities for residents to benefit from solar power. For those looking to reduce their energy costs and contribute to a more sustainable future, understanding and taking advantage of these key solar incentives is essential.

Disclaimer

The information provided herein is for informational purposes only and is accurate as of the time of publication. Please be aware that the solar energy landscape, including technology, regulations, incentives, and market conditions, changes frequently. Therefore, it is essential to consult with qualified experts and professionals before making any decisions regarding solar energy installations or investments. This will ensure that you receive the most current and applicable advice tailored to your specific circumstances.

More articles

Click outside to hide the comparison bar
Compare