2023 Solar Incentives Guide for Alabaster, AL - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Alabaster.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2023 and beyond)
- Ways to optimize your solar investment
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What Solar Tax Credits, Incentives, and Rebates are Available in Alabaster?
Wood-Burning Heating System Deduction
Local Option- Property Tax Exemption for Renewable Energy Faclities
Alabama Power - Residential Heat Pump Loan Program
Central Alabama Electric Cooperative - Residential Energy Efficiency Rebate Program
Dual Fuel or Mini-Split Heat pumps: $300- $350/ton
Converting furnace to heat pump in new manufactured homes: $400-$700
Converting furnace to heat pump in existing manufactured homes: $400/ton
Federal Residential Renewable Energy Tax Credit
The phrase "solar incentives" refers broadly to financial incentives that are in place to encourage people to use renewable energy by making solar panels more affordable. Incentives may include things like discounts, cash back or monthly utility bill credits. Some incentives are handled federally, while others are offered by the state of Alabama or your utility company, county or municipality. Categories of solar incentives include:
- Rebates: Rebates, or cash back after a purchase, are usually given prior to any solar tax credits being calculated. Rebates can be offered by your local utility company, by your state or by your county.
- Net Metering: You can sign a net metering agreement with your Alabaster utility company. This agreement may apply to all or a percentage of the excess electricity that is generated by your solar panels. Your utility company will then subtract this value from your utility bill each month.
- Tax Credits: Tax credits are dollar-for-dollar reductions (not deductions) in the amount of tax that you owe the government.
- Tax Exemptions: Your solar system may qualify for exemptions on both sales and property tax. Sales tax exemptions are effective at the time of purchase. Property tax exemptions let you ignore the value that solar panels add when you are calculating property taxes on your house.
Federal Solar Incentives
Federal incentives are the type of incentives that you are most likely to have heard of. The solar incentive that you're most likely to have heard of is the Federal Solar Investment Tax Credit (ITC), which provides a credit on your taxes equal to a percentage of your solar system's cost.
The ITC initially applied to 30% of the total cost of solar panel installation, although that number has fluctuated slightly over time between 26-30%. The installation date of your solar system will determine what percentage you qualify for. The total cost of installation includes the panels themselves as well as the cost of accessories, labor and equipment. There is no maximum claim amount. The ITC can be applied to solar systems installed after January 1, 2006 on your primary or secondary residence. The residence must be in the United States and owned by you.
To more fully understand how the ITC may apply to you, get in touch with your local Alabaster solar panel installer and request more information.
The ITC was renewed and increased in scope after the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. Homeowners can now receive a credit equal to 30% of the total solar system installation costs for projects that began after January 1, 2022 and will be finished by the end of 2032. This percentage will then decrease yearly until the Clean Energy Credit expires in 2035. The expansion also makes credits for energy storage systems even easier to claim, beginning in 2023.
More information about the new Inflation Reduction Act can be found here. To fully understand how the new Clean Energy Credit might apply to you, reach out to your local Alabaster solar installation company.
State & Local Solar Incentives
There are more than just federal solar incentives; rebates, tax credits and more are often offered at the local or state level. Some incentives are ongoing, while others are offered for only a limited time. Your local incentives might come from the Alabama government, or from your specific county or municipality.
Next Steps for Installing Solar in Alabaster
You can apply for and receive solar incentives from the federal government and the Alabama government, as well as from your local utility company. Growing availability of solar initiatives in the past 15 years has helped increase solar adoption nationwide. Your local Alabaster solar panel installer can help you learn more about which incentives you can apply for, and get you on track to switch to renewable energy today.
EcoWatch's Alabaster, AL Solar Incentives FAQs
Our goal is to reach as many people as we can with sensible solutions like solar energy. Our team of full-time local researchers collects solar price and installation data for every city in America then compiles it to create these digestible city guides. If you want to read our solar expert's opinion on the top solar companies featured here, follow this link.