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U.S. Department of Energy Energy Efficiency and Renewable Energy

Energy Incentive Programs, Alabama

Updated December 2011

What public-purpose-funded energy efficiency programs are available in my state?

Alabama has no public-purpose-funded energy efficiency programs.

What utility energy efficiency programs are available to me?

Tennessee Valley Authority (TVA) is the largest publicly-owned utility in the U.S. In 2008, TVA's board approved a goal of reducing peak demand by 4% (1,400 MW) by 2012. Under its Energy Right Solutions program, TVA offers two new energy efficiency incentive programs to its commercial and industrial customers that are served by a participating distributor of TVA power:

  • The energyright solutions initiative provides two different options for offsetting the costs of energy efficiency projects. Standard cash rebates are available for replacing specific types of equipment (lighting, motors, HVAC and food service equipment) with more efficient versions. Projects that are more comprehensive or involve other types of efficiency upgrades may qualify for custom incentives (currently $0.10 per kWh of estimated first-year savings). To qualify for incentives, customers must complete an application and receive written approval prior to equipment purchase or installation.

  • The Commercial Efficiency Advice and Incentives (CEAI) program provides free energy assessments, detailed energy studies and financial incentives to qualifying most commercial facilities (those that have a demand charge) for installing lighting and HVAC equipment that reduces demand. One-time incentive amounts are $200 per kW reduced during TVA's summer peak period. To start the process, customers should contact their local power distributor and sign up for the free assessment.

What load management/demand response options are available to me?

Alabama Power (part of the Southern Company) offers a set of real time pricing programs. Under this service, customers are alternatively credited or charged for electricity usage below or above a pre-determined customer baseline load (CBL). Participants may choose to pay for these differences from their CBL based on either day-ahead or hour-ahead market pricing. Furthermore, customers may also select from a variety of price protection products, including caps, collars, contracts for differences, index swaps, and index caps. These variants on the basic real time pricing service are risk management tools that customers can use as a hedge during possible periods of higher real-time electricity prices.

Alabama Power also offers the Standby Generator Capacity rate, wherein customers can receive a monthly credit of $2.31/kW for allowing Alabama Power to remotely operate their standby generator (of 250 kW or greater) during periods of peak electricity demand. Generators signed on to this program may be operated by the utility for a maximum of 240 hours per year.

The TVA-EnerNOC Demand Response Program provides payments to participants in exchange for agreeing to reduce electricity consumption during times of exceptionally high demand with a 30-minute notice. Demand response events may occur weekdays April-October between 12and 8 p.m. and November-March between 5 a.m. and 1 p.m. EnerNOC collaborates with customers to create an optimal demand reduction plan Demand response efforts typically involve curtailing energy usage of such equipment as lighting, chillers, pumps and HVAC equipment. Interested customers may contact their local electricity distributor or fill out the program's inquiry form.

TVA's CEAI program (see above) also provides its incentives based on peak reductions.

What distributed energy resource options are available to me?

The Database of State Incentives for Renewables and Efficiency (DSIRE) provides information on programs that offer incentives for renewable distributed generation. The following programs may be of interest to federal customers:

Alabama's Biomass Energy Program assists commercial customers in installing biomass energy systems, including those fired from woodwaste and landfill gas. Program participants receive up to $75,000 in subsidy payments to help defray the interest expense on loans to install approved projects.

Through the Green Power Switch Generation Partners Program, TVA will provide an up-front incentive of $1,000 and then purchase the output of a solar photovoltaic, wind, biomass, or small hydropower installation of up to 50 kW for ten years. (Note that the maximum installation size for new projects under the Generation Partners Program has been reduced from 200 kW to 50 kW. Larger systems may qualify for the Renewable Standard Offer (see below)). The remuneration rates are $0.12/kWh above the retail rate for solar installations and $0.03/kWh above the retail rate for the other renewables. Purchases must be brokered by a participating power distributor (generally, utilities that purchase TVA power).

TVA's Renewable Standard Offer program provides power purchase plans of up to 20 years to developers of renewable projects (biomass combustion, biomass gasification, methane recovery, wind and solar) greater than 50 kW and up to 20 MW in size. Rates paid, which average about 5.5¢/kWh, are based on seasonal time-of-day averages. The energy seller must provide TVA with project financing and interconnection agreements as well as metering installation plans, and must sign over title to RECs and other environmental attributes generated by the system. The program has a production limit of 100 MW total, with no more than 50% of the total coming from any one renewable technology).

Are there energy efficiency programs sponsored by state government?

The Energy Division of the Alabama Department of Economic and Community Affairs offers energy conservation programs, but none is currently available to federal facilities.

What additional opportunities are available to me?

Federal customers whose utilities have area-wide supply contracts through GSA (such as Alabama Gas and Alabama Power) may be able to take advantage of 3rd-party financed energy efficiency projects called utility energy services contracts (UESCs). Information is available on GSA's Energy Center of Expertise Library Page. Federal facilities should contact their account executive to determine the level of each utility's participation.