Alabama renewable energy and energy efficiency

Alabama ranks sixth among the states in electricity net generation with a diverse energy mix portfolio. The state government and utilities in Alabama offer incentive programs, including rebate, performance-based, tax incentives and loan programs, to encourage the adoption of renewable energy and the improvement of energy efficiency.

A history of renewable energy and energy efficiency in Alabama

Alabama does not offer net metering policies, but the state does encourage energy efficiency. In 2006, the governor of Alabama issued Executive Order 33 requiring state departments and agencies to encourage and promote energy conservation in state-owned buildings1. In 2010, the legislature authorized the Alabama Energy and Residential Code (AERC) Board to adopt mandatory residential and commercial energy codes, which would take effect on October 1, 2016 and January 1, 2016 respectively2. In 2016, Governor Bentley issued an amendment to the Executive Order 39 to encourage state agencies to consider using green building standards3.

In Alabama, two dozen hydroelectric dams supply around 8% of the state's net electricity generation, making it the largest renewable energy source. The rest of the state's renewable generation mostly comes from biomass. Alabama does not have utility-scale wind generation4. Alabama has great solar potential, yet only 0.30% of its electricity comes from solar energy, with 282.94 MW of installed capacity. Over the next 5 years, 1,468 MW of solar capacity is projected to be installed5.

Alabama's Renewable Portfolio Standard

Alabama does not have a renewable energy portfolio standard or a voluntary renewable energy target.

Important renewable energy organizations in Alabama

The Alabama Public Service Commission was designated in 1915 by the Alabama Legislature. The Commission aims to provide consumers with safe, adequate and reliable services at rates that are equitable and economical6. The Commission is composed of three members: a President and two associate commissioners. The Electricity Section oversees the regulation of investor-owned electric utilities in Alabama. Only one electric utility, Alabama Power Company, falls under the Commission's regulatory authority7.

The State Energy Office is a division of the Alabama Department of Economic and Community Affairs (ADECA). The Energy Office provides programs to lower energy costs and consumption, decrease reliance on imported energy, reduce impacts of energy production and use on the environment and to increase energy security and reliability. Programs are conducted in the areas of building energy codes, industrial energy efficiency, energy education, renewable fuels, performance contracting and alternative transportation fuels8.

Utilities in Alabama also play a significant role in advancing renewable energy and energy efficiency. Major electric suppliers in Alabama are Alabama Power, Baldwin EMC and the Tennessee Valley Authority9. Alabama Power was founded on renewable energy, and its first generating plant project, Lay Dam, opened in 1912. It launched Greener State to allow customers to power homes with renewable energy through purchasing Renewable Energy Certificates (RECs)10. With more than 100 years' history, Alabama Power services 1.4 million homes, business and industries in the state, and it is a leader in implementing renewable energy programs to provide solar energy, while it has the capacity charge for some solar-generating customers.


  1. DSIRE. “Energy Standards for State Agencies”. Accessed February 24, 2020
  2. DSIRE. “Building Energy Code”. Accessed February 24, 2020
  3. DSIRE. “Voluntary Green Building Standards for Public Buildings”. Accessed February 24, 2020
  4. EIA. “State Profile and Energy Analysis”. Accessed February 26, 2020
  5. Solar Energy Industries Association. “Alabama Solar”. Accessed February 26, 2020
  6. Alabama Public Service Commission. “About the PSC”. Accessed February 26, 2020
  7. Alabama Public Service Commission. “Electricity Policy Division”. Accessed February 28, 2020
  8. Alabama Department of Economic and Community Affairs. “State Energy Programs”. Accessed February 28, 2020
  9. Arcadia. “Alabama Renewable Energy”. Accessed February 28, 2020
  10. Alabama Power. Accessed February 28, 2020

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