Going Solar in Alaska? Here’s How to Know if It’s Worth It
Alaska may be known for its long winter nights, but it’s also the land of the midnight sun — and solar panels can help residents mitigate some of the nation’s highest energy costs.
The Last Frontier ranked 49th nationwide for solar capacity in 2022, according to the Solar Energy Industries Association. Despite the slow adoption, Alaskans have many reasons to consider solar panels, according to Chris Rose, founder and CEO of the Renewable Energy Alaska Project, a clean energy nonprofit.
“In Alaska, there used to be the question, ‘Well, why get solar if it’s pretty dark three months a year?'” Rose said in a phone conversation. “That made sense when the price of solar was so much higher than it is today, but there is such a good solar resource for seven or eight months a year in Alaska that it’s way more likely [for someone] to consider solar.”
Even still, going solar may not be ideal for you. Your location and relationship to the grid both matter. Here’s a breakdown of what you need to know about going solar in Alaska so you can make the best decision for your home.
Your location matters if you’re going solar in Alaska
Where you’re located in Alaska impacts how you get your power and the practicality of solar panels. In simple terms, Alaskans either live on the Railbelt or off of it.
The Railbelt is an electric grid covering the area from Fairbanks through Anchorage to the Kenai Peninsula. It’s home to most Alaskans and consumes nearly 80% of the state’s electricity. Six electric utilities — each with its own generation sources — operate along the Railbelt. Residents looking to add solar panels to their home have the opportunity to take part in net metering, which allows you to sell excess solar energy back to the grid in exchange for credits.
Outside of the Railbelt, most of the state’s remote communities rely instead on tiny, disconnected grids — many of which use diesel-fueled generators. The cost of transporting diesel means electricity costs in rural areas can be three to five times higher than in urban areas along the Railbelt, according to an analysis by the Energy Information Administration. Because of these high costs, the state offers economic assistance to customers of rural electric utilities through a Power Cost Equalization program.
That high cost also drives innovation, Rose said. “We’ve seen so many of these remote communities be interested in adding renewables on top of their diesel grid.”
Going solar looks different in rural communities compared to those along the Railbelt. It’s often done on a community-wide scale, meaning their systems are significantly larger than an individual residential system. Rose said there isn’t a lot of data on residential rooftop systems in those remote places because it’s not encouraged by the utility.
“There’s no net metering in rural Alaska because the smaller grids would have a much harder time absorbing electricity from rooftop consumers. If a small village utility loses a couple customers and also has to start paying them [through net metering], that’s going to be a real problem for their bottom line,” Rose said.
However, it’s not unheard of for Alaskans in rural areas to invest in solar panels for their homes. There are a few more hurdles — like the higher cost of transportation and labor as well as the lack of access to net metering — but solar systems in rural areas can help residents offset diesel use during the spring and summer months.
Alaska solar power costs
Installing a solar system is a big investment, but just how much it will cost you is going to vary. The cost is measured in dollars per watt, which means the bigger your system, the more expensive it will be. However, the cost of your solar system will depend on more than just the system size and the pitch of your roof. Whether you live in a rural area or not will impact the cost as well as your eligibility for net metering.
The average system size in urban Alaska is between 4 kW and 6 kW, according to Rose. Nationwide, the average cost of an 8 kW system is $23,920 — $2.99 per watt — according to consulting firm Wood Mackenzie.
Nationwide average solar panel costs
|System size (kW)||Price per watt||Installed cost|
Alaska’s low level of solar adoption means there isn’t a lot of information on the exact price of installing solar in the Last Frontier. However, based on research by academic experts at the University of Alaska at Fairbanks and our conversations with other experts, the cost can fall anywhere between $10,000 and $30,000.
Installations in urban Alaska typically range from $1.25 to $3.50 per watt, while remote installations range from $2.20 to $4.60 per watt, according to a 2019 report from the Alaska Center for Energy and Power.
The cost of installing solar is typically more expensive in rural Alaska due to the high transportation and labor costs.
How to pay for solar panels
There are plenty of options when it comes to financing your solar system. You can pay upfront in cash, take advantage of solar leases and power purchase agreements, borrow with a loan or tap into your home’s equity.
- Cash: If you can afford it, consider paying for your solar system in cash. You won’t have to cover any loan fees or interest costs, nor do you need a qualifying credit score. If solar panels don’t fit into your budget right now, you can take advantage of rising interest rates by saving for your future array in a high-yield savings account.
- Solar loan: Some solar providers partner with credit unions or other financial institutions to offer solar loans to their customers. Solar loans from your installer may carry higher fees than ones from a bank or financial institution. Your credit score can also impact your eligibility.
- Home equity loan or line of credit (HELOC): You can tap into your home’s equity with a home equity loan or HELOC to finance your solar array. Home equity loans and HELOCs allow you to finance home improvements, like solar panels, without disturbing your primary mortgage. There is a risk, though: If you default on your payments, you could lose your home.
- Lease or power purchase agreement: Some solar providers will allow you to enter into a lease or power purchase agreement at a rate typically lower than what you pay your utility. You won’t own your solar panels. Instead, you’ll pay for the equipment (via lease) or the power your system generates (via power purchase agreement).
Alaska solar panel incentives or rebates
The cost of going solar has fallen significantly in recent years, but it’s still a big investment no matter where you live. Alaskans can take advantage of a few government incentives and community projects, where available, to make solar more affordable and accessible.
The federal residential clean energy credit is one of the main incentives for solar-curious Alaskans, and it was recently extended until 2034 through the Inflation Reduction Act. This credit allows you to deduct 30% of the cost of your solar system — including installation costs — from your federal tax bill.
The value of your home can increase when you install solar panels. This means your property taxes will too. But some Alaskan cities don’t increase your property taxes when you add solar panels. Check with your local government to find out.
In 2010, the Regulatory Commission of Alaska (PDF) approved net metering regulations, which allow Railbelt residents to sell excess solar generation in exchange for credits equal to the wholesale rate, which is lower than the retail rate (what you pay for electricity). Alaska’s net metering system currently operates on a monthly basis.
“Monthly net metering doesn’t incentivize solar quite as much as an annual system, particularly in a place that’s so seasonal like Alaska,” Rose said. “My system might make six or seven times more power than I used in June, but I can’t roll over those credits on a retail basis. Instead, I get an avoided cost credit that can help defray the cost of my bills in the winter.”
The Solarize Program helps communities buy solar panels as a group and receive significant discounts. Those discounts can range from 10 to 17% before applying the federal tax credit, according to The Alaska Center, an environmental advocacy group that coordinates the effort.
While you can find a complete list of incentives in Alaska on the Database of State Incentives for Renewables and Efficiency, here are some major ones worth noting:
Alaska solar incentives
|Net metering||Since 2010, Alaska net metering law requires certain electric utilities to offer net metering. If your solar system’s capacity is less than 25 kW, you can sell your excess solar energy back to the power company in exchange for credits.|
|Property tax exemption (varies)||Alaska law allows municipalities to create their own property tax exemptions for residential renewable energy systems, meaning you won’t see increases to your property taxes when you install solar panels. However, not all municipalities offer this exemption, so be sure to check whether this is an option where you live.|
|Residential clean energy credit||You can claim up to 30% in tax credits with the federal residential clean energy credit when you purchase solar panels.|
|Solarize Alaska campaigns||The Solarize Program allows communities to purchase solar panels as a group and receive discounted rates on panels and installation. This program was piloted in Oregon and is now available in Anchorage, Fairbanks and Mat-Su.|
Alaska solar panel companies
The Solar Energy Industries Association reports just five solar installers in Alaska.
When choosing a solar provider, it’s important to shop around to find one that ticks all your boxes.
Some things to consider are whether the company offers long warranties and its customer service ratings, as well as products and services offered. Especially in Alaska, you’ll want to make sure your installer offers high-efficiency panels so you can capitalize on every bit of sunshine. High efficiency panels will help you do that in low-light conditions.
Here is a list of solar companies you might consider, based on our research, expert input and CNET’s review of the best solar companies.
Based in Anchorage, Alaska Solar installs grid-tied and off-grid solar as well as battery systems. While Alaska Solar only offers one solar panel brand — Qcells — the panels’ better-than-average efficiency rating (20.6%) makes them suitable for low-light conditions. However, Alaska Solar has limited financing options (no leases or power purchase agreements) and only offers the manufacturer’s warranty for the equipment.
Arctic Solar Ventures
Founded in 2015, Arctic Solar Ventures installs grid-tied solar systems and solar batteries in and around Anchorage. The company specializes in residential solar installations and solid-state battery systems. ASV primarily installs REC solar panels — but the panels do have a high efficiency rating of 22.3%. ASV provides a 30-year insurance-backed warranty. While ASV doesn’t offer leases or power purchase agreements, you can take advantage of its loan options through Clean Energy Credit Union and Mosaic. ASV does not install off-grid solar.
Renewable Energy Systems of Alaska
Since 2006, Renewable Energy Systems of Alaska has provided a variety of renewable energy systems, including grid-tied and off-grid solar systems in addition to solar batteries. RES serves Anchorage, Fairbanks, Wasilla and the surrounding areas. The company offers a selection of panels, including Trina and Canadian Solar — both of which have above-average efficiency ratings. RES offers strong warranties — 50 years for the equipment and 30 years for the power output — but has limited financing options (no leases or PPAs).
SunPower Solar operates in all 50 states and has been in business since 1985. The company produces its own branded products, such as the Maxeon solar panels and SunVault solar batteries. The panels have the highest efficiency rating in this group — 22.8% — but are also some of the most expensive. You can buy or lease panels from SunPower, or enter into a power purchase agreement. SunPower offers a 25-year complete system warranty.
Installation factors to consider
Solar panels may be the right fit for your home — or they might not be. Here are a few things to consider:
- Lack of sun in the winter months: Solar panels still work in extreme cold temperatures — in fact, they may even work better. However, snow and the long winter nights of Alaska mean your panels will produce significantly less (if any) power during the winter. As a result, your solar panels are unlikely to be a year-round solution.
- High-efficiency solar panels: Because Alaska sees fewer sunny days — 121 days per year compared to the national average of 205 — experts recommend opting for high-efficiency panels to maximize your solar’s system’s productivity. Solar panel efficiency measures how well the panel converts sunlight to energy. Top tier panels have efficiency ratings of 20% and above. While high-efficiency panels can increase the upfront cost of your solar system, they can increase your savings in the long run.
- Energy storage system: While solar batteries add value to any solar system, they are particularly useful in rural areas with no grid connection. Since rural Alaskans are likely ineligible for net metering, solar energy storage systems allow them to store and draw on excess solar generation. Solar batteries can be a costly investment, ranging from $5,000 to $20,000. However, you can apply the 30% federal solar tax credit towards them.
- Roof condition and pitch: Make sure your roof is in good condition before installing solar panels. A reputable company will inspect your roof’s condition and pitch prior to installation. If your roof’s pitch isn’t suited to Alaska’s latitude, you may consider ground-mounted solar panels if you have the space.
- DIY installation: Some Alaskans, particularly in rural areas, consider installing their solar system themselves. DIY solar panels are not designed to be hooked up to the grid, which is why this method is more common in remote areas. Installing solar panels yourself requires at least some knowledge of electrical work. While it may be cheaper to install your solar array yourself, you’ll lose out on the additional benefits of expert installation.
What is the average solar system size in Alaska?
In urban areas, the average system is around 5 kW. That number is often much larger in remote areas that opt for community-scale solar systems.
How much sun does Alaska get?
Alaska averages 121 days of sunshine per year. In certain parts of Alaska, the sun will shine for most, if not all, of the day during the summer months.
Do I need to clean snow off my solar panels?
In Alaska, snow is bound to land on your solar panels. Light snow will likely melt quickly but heavy snow can put too much weight on your solar panels. Before attempting to remove snow from your panels, be sure to check with your provider to see if they can assist. You want to make sure you don’t void your warranty.