Alabama HVAC Regulatory Oversight for 2026: Complete Guide

Understanding Alabama HVAC regulatory oversight is essential for contractors, businesses, and homeowners navigating the state's energy landscape. Alabama's regulatory environment involves multiple agencies overseeing utility rates, contractor licensing, and energy policy. This comprehensive guide covers everything you need to know about Alabama HVAC regulations heading into 2026.

The regulatory oversight framework in Alabama affects how HVAC contractors operate, what utility rates consumers pay, and how energy infrastructure develops across the state. Whether you're an HVAC contractor seeking licensure or a business evaluating Alabama's energy market, understanding these regulatory structures is critical for success.

Alabama Public Service Commission: Primary Regulatory Oversight

The Alabama Public Service Commission (PSC) serves as the primary regulatory body for Alabama's investor-owned utilities. Established by the Alabama Legislature in 1915, the PSC is responsible for ensuring consumers receive safe, adequate, and reliable utility services at equitable and economical rates.

The Alabama PSC is composed of three elected members who serve four-year terms: a President elected during presidential election years (2024, 2028) and two associate commissioners elected during midterm years (2022, 2026). The current commissioners include Jeremy H. Oden (Place One), Chris V. Beeker III (Place Two), and Cynthia Almond, who was appointed in June 2025 following the resignation of former President Twinkle Andress Cavanaugh.

The PSC's regulatory authority in Alabama includes:

Investor-owned electric utilities (primarily Alabama Power Company), natural gas utilities (including Spire), landline telecommunications, private wastewater treatment systems, trucking and transportation services, and gas pipeline safety oversight.

Notably, the Alabama PSC does not regulate electric cooperatives, municipal utilities, wholesale power generators, or the Tennessee Valley Authority (TVA). However, PSC decisions concerning Alabama Power often establish precedents that influence policies across all utility types in the state.

Agency: Alabama Public Service Commission (PSC)
Address: 100 N Union St, RSA Union, Montgomery, AL 36104
Phone: (334) 242-5218
Consumer Complaints: 1-800-392-8050
Website: https://psc.alabama.gov/

Understanding Alabama's Regulatory Environment for 2026

The regulatory environment in Alabama is characterized by a close relationship between the state's dominant investor-owned utility, Alabama Power (a subsidiary of Southern Company), and its elected regulators. All three current PSC commissioners are Republicans, mirroring the political composition of neighboring Georgia's commission, which regulates another major Southern Company subsidiary, Georgia Power.

This dynamic often results in regulatory decisions that align with incumbent utility objectives. The PSC has historically approved the majority of Alabama Power's requests, including:

Approval of costly upgrades to aging coal-fired power plants, authorization of major natural gas facility additions in 2020, 2022, and 2025, implementation of a capacity reservation charge on customer-owned solar generation ($5.41 per kW as of 2025), and formula-based rate mechanisms that limit formal rate case reviews.

In November 2025, Alabama Power filed a proposal with the PSC to maintain stable electric rates through 2027. The filing includes commitments to freeze certain adjustable rate factors, utilize federal nuclear production tax credits, and apply potential customer refunds to the Natural Disaster Reserve. The PSC is expected to consider this proposal in December 2025, with implications extending into 2026 and beyond.

For businesses focused on consumer-side energy solutions, distributed generation, or energy efficiency services, Alabama's regulatory climate presents unique challenges. The state ranks 51st nationally for rooftop solar capacity and second-to-last in energy efficiency efforts according to the American Council for an Energy-Efficient Economy. A successful market strategy in Alabama often requires sophisticated navigation of the state's political and regulatory landscape.

Alabama HVAC Licensing Requirements for 2026

The Alabama Board of Heating, Air Conditioning & Refrigeration Contractors (HACR) governs all HVAC licensing in the state. Alabama maintains strict statewide standards for HVAC contractors, beginning at the apprentice level. Performing HVAC work without proper licensure is a misdemeanor subject to a $2,000 penalty per violation.

There are four main HVAC license types in Alabama:

HVAC Contractor License: Required for installing, servicing, or repairing heating and air conditioning systems including forced air systems, heat pumps, mini-splits, gas piping, and ventilation equipment.

Refrigeration Contractor License: Required for work on refrigeration systems that control temperature and humidity for purposes other than human comfort (commercial refrigeration, cold storage, etc.).

Apprentice Registration: Required for individuals working under supervision of a licensed contractor while gaining experience.

Inactive Status: For license holders not actively performing HVAC work who wish to maintain their certification.

Pathways to Alabama HVAC Licensure

To qualify for the Alabama HVAC contractor exam, applicants must meet one of these requirements:

Apprenticeship Path: Complete two years of registered apprenticeship under a licensed HVAC contractor. Registration fee is $25 per certificate ($50 for both HVAC and refrigeration).

Education Path: Graduate from an approved HVAC program at an Alabama community college or technical school, such as J.F. Drake State or Wallace State Community College.

Experience Path: Document at least 3,000 hours (approximately 18 months) of supervised work experience under a licensed contractor within the past five years, verified with W-2 forms and notarized affidavits.

HVAC License Fees and Requirements

The following fees apply to Alabama HVAC licensing in 2026:

Exam Fee: $150 per exam ($300 for both HVAC and Refrigeration)
Active License Fee: $190-$220 annually
Inactive License Fee: $95-$110 annually
Performance Bond: $15,000 (required for active licenses)
License Reinstatement: $250 (for expired licenses)

All Alabama HVAC contractors must complete four hours of approved continuing education annually. Licenses expire on December 31st each year and must be renewed before that date to avoid lapse. Contractors with five or more employees must maintain workers' compensation coverage per the Alabama Department of Labor.

EPA Section 608 Certification is also required for any technician who handles refrigerants, conducts pressure tests, or services equipment that could release refrigerants into the atmosphere.

Agency: Alabama Board of Heating, Air Conditioning & Refrigeration Contractors
Address: 100 N. Union Street, Suite 314, Montgomery, AL 36104
Phone: (334) 242-5550
Email: staff@hacr.alabama.gov
Website: https://hacr.alabama.gov/

Reciprocal HVAC Licensing Agreements

Alabama has reciprocal licensing agreements with several states. Out-of-state contractors holding valid HVAC licenses may apply for Alabama licensure without examination if they meet these tenure requirements:

South Carolina Residential Builders Commission: 5 years minimum
Tennessee Board for Licensing Contractors: 3 years minimum
Mississippi Board of Contractors: 1 year minimum
Louisiana State Licensing Board: No waiting period
West Virginia Contractor Licensing Board: No waiting period
Ohio Construction Industry Licensing Board: Varies

Directory of Alabama Electric Companies

Alabama's electricity market includes one major investor-owned utility, numerous electric cooperatives, and several municipal utilities. Understanding the utility landscape is essential for HVAC contractors and energy service providers operating across the state.

Investor-Owned Utility

Alabama Electric Cooperatives

Alabama Municipal Utilities

Energy Policy and Renewable Energy in Alabama

Alabama's energy policy landscape presents both challenges and opportunities for HVAC contractors and energy service providers. The state does not have a Renewable Portfolio Standard (RPS) or mandatory renewable energy targets. Alabama ranks 39th nationally for installed solar capacity (862 MW) and 51st for rooftop solar.

Key energy policy considerations for 2026 include:

Solar Capacity Charge: Alabama Power charges rooftop solar customers a capacity reservation fee of $5.41 per kW, which significantly impacts the economics of residential solar installations.

Net Metering: Alabama has no statewide net metering requirement. Alabama Power's Purchase of Alternative Energy (PAE) program pays approximately $0.03 per kWh for excess solar generation, well below retail rates.

Property Tax Exemption: Alabama offers a 100% property tax exemption for solar installations, meaning solar panels won't increase property tax assessments.

Federal Tax Credits: The 30% federal Investment Tax Credit (ITC) remains available through December 31, 2025, making immediate solar installations more attractive.

In May 2025, Governor Kay Ivey signed the "Powering Growth" act, an "all-of-the-above" energy plan focused on expanding energy capacity and streamlining permitting for energy infrastructure projects. This legislation established the Alabama Energy Infrastructure Bank to provide funding support for energy projects.