Is Electrification Worth It in Alabama?

Alabama is hot. Really hot. And humid.

You'll use AC from April through October. Heating is light—2,400 heating degree days in Birmingham, less in Mobile. Electricity costs $0.12/kWh from Alabama Power. Most homes built after 1985 have heat pumps because they're cheaper to run than electric resistance or gas in this climate.

Upgrade to a modern high-efficiency heat pump if yours is 12+ years old. Your cooling savings alone ($400-700/year) will pay for it in 6-8 years. Solar economics are decent but not amazing—Alabama Power's net metering caps at 2% of peak demand, so there's a waitlist in some areas. But heat pumps? No question.

Updated December 2024•Data from EIA, DSIRE, NREL
Heat Pump Payback
Not Recommended
With incentives
Annual Savings
$2,486
Full electrification
Available Incentives
$10,000
Federal + state + utility
CO₂ Reduction
12.1 tons
Per year

Alabama Energy Costs

Electricity Rate
$0.138/kWh
Natural Gas Rate
$1.42/therm
Average Electric Bill
$152/month
Average Gas Bill
$62/month
Climate Zone
hot
Heating Degree Days
2,400
Cooling Degree Days
2,100
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Visual ROI Analysis

Payback Period Comparison

Lower is better • Shortest payback = fastest return on investment

Annual Savings Comparison

Higher is better • More annual savings = greater long-term benefit

Cumulative Net Savings Over Time

Point where line crosses $0 = payback achieved • Steeper line = faster savings growth

Return on Investment by Upgrade

🌡️

Heat Pump HVAC

Upfront Cost$12,000 - $22,000
Total Incentives-$2,300
Net Cost$9,700 - $19,700
Annual Savings$22/yr
Payback PeriodNot Recommended
Lifetime ROI8%
CO₂ Reduction1.8 tons/yr
☀️

Solar Panels

Upfront Cost$15,000 - $30,000
Total Incentives-$4,500
Net Cost$10,500 - $21,000
Annual Savings$1,118/yr
Payback Period14.8 years
Lifetime ROI145%
CO₂ Reduction3.8 tons/yr
💧

Heat Pump Water Heater

Upfront Cost$2,500 - $4,500
Total Incentives-$2,200
Net Cost$300 - $2,300
Annual Savings$219/yr
Payback Period7.4 years
Lifetime ROI73%
CO₂ Reduction1.8 tons/yr
⚡

EV Charger + Electric Vehicle

Upfront Cost$800 - $2,500
Total Incentives-$1,000
Net Cost$-200 - $1,500
Annual Savings$1,128/yr
Payback Period0.6 years
Lifetime ROI1460%
CO₂ Reduction4.8 tons/yr

Full Electrification Package

Total Upfront Cost
$30,300 - $59,000
Total Incentives
-$10,000
Net Cost After Incentives
$20,300 - $49,000
Annual Energy Savings
$2,486/year
Lifetime Savings (18 years)
$44,756
Simple Payback
15.6 years
💡

Best ROI for Alabama

Based on your state's energy costs and climate, EV Charger offers the best return on investment with an average payback of 0.6 years and an ROI of 1460%.

0.0 years slower than average compared to the national average.

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