2025 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 2024 and beyond)
- Ways to optimize your solar investment
Solar installers are experts in maximizing your solar tax credits and rebates.
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What Solar Tax Credits, Incentives, and Rebates are Available in Alabaster?
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
Source: https://www.dsireusa.org/
Solar incentives are designed to make renewable energy usage more affordable via financial incentives for those who install solar panels on their homes. Different kinds of incentives, including discounts, cash back or credit towards your monthly utility bill, may be available to you. Some incentives may be handled by the Alabama government, by your utility company or by county or municipality, while other incentives are federal. You might qualify for any of the following types of solar incentives:
- Tax Credits: Unlike tax deductions, tax credits reduce, dollar-for-dollar, the amount of income tax that you owe the government.
- Rebates: Some solar companies will help you claim a rebate, or partial refund of your purchase, for your solar panels. Counties or states will also offer limited-time rebates at various times. The value of a rebate will usually come off the total price before tax credits are calculated.
- Tax Exemptions: Sales tax exemptions are effective at the time of purchase for your solar system. Property tax exemptions allow you to exclude the value that your solar panels add when calculating how much property tax you need to pay.
- Net Metering: You can sign a net metering contract with your Alabaster utility company that will apply to all or a percentage of the excess electricity your solar panels generate. They will then subtract this value from your monthly utility bill.
Federal Solar Incentives
When thinking about solar incentives, federal incentives might be the first thing that comes to mind. The Federal Solar Investment Tax Credit, or ITC, is the most well-known federal solar incentive. The ITC provides you with a tax credit for a predetermined percentage of your solar system's cost.
The ITC can be applied to the total cost of solar system installation, including the panels themselves as well as equipment, labor and accessories. You can claim this credit for panels installed after January 1, 2006, on a primary or secondary residence that you own and that is located in the United States. From its original value of 30% of the total cost, the credit has fluctuated slightly between 26-30%, and you may qualify for varying percentages depending on when your project was completed. There is no maximum claim amount.
Your local Alabaster solar panel installation expert can provide more information about the ITC and how it applies to your situation.
In August 2022, the Inflation Reduction Act made revisions to the ITC, now titled the Clean Energy Credit. For solar system installations that begin after January 1, 2022, and are completed by the end of 2032, homeowners can apply for a credit for 30% of the total cost. After 2033, the percentage will decrease annually until the Clean Energy Credit ends in 2035. The expansion to the program also makes it easier to get credit for energy storage systems, beginning in 2023.
More information about the new Inflation Reduction Act can be found here. The easiest way to understand how the new Clean Energy Credit might apply to you is to reach out to your local Alabaster solar panel installation expert with your questions.
State & Local Solar Incentives
There are often also state solar incentives in addition to those provided by the federal government. Rebates, tax credits and more may be available at a more local level. Incentives might be handled by the state of Alabama, or by your county or municipality. Some incentives might only be available for a limited time, while others are ongoing.
Next Steps for Installing Solar in Alabaster
There are many types of solar incentives: those offered by the federal government, those given by the Alabama government and those provided by local utility companies, to name a few. Solar energy utilization has grown enormously in the last 15 years, partially thanks to these incentives. If you're ready to make the change to solar energy, getting in touch with your local Alabaster solar panel installation expert is an excellent place to start.
EcoWatch's Alabaster, AL Solar Incentives FAQs
How much will solar panels save me annually on my electric bill in Alabaster?
When you add solar panels to your Alabaster home, you can anticipate savings of approximately $1,109.02 per year, or about $21,071.41 over the next 20 years.
If I switch my appliances out for ones that utilize solar energy, are there credits that I can claim?
The new Inflation Reduction Act creates a number of new financial incentives that are available when you make eco-friendly improvements to your home. More details regarding these incentives, including information about incentives for purchasing new appliances, can be found here.
Can I use a combination of solar and another type of renewable energy to power my home?
You can use multiple types of renewable energy, or a combination of renewable and non-renewable energy, to power your home. Be sure to go over your plan with your local Alabaster solar installation expert. They can help you as you plan for your project and give you an understanding of various incentives that you might or might not qualify for.
What if I add a solar system to a rental property, vacation home or commercial property? Can I still qualify for incentives?
Many solar incentives apply to a property located within the United States that you own; most secondary residences fall into this category. Other solar incentives may be available for commercial properties, depending on the details. We recommend talking to your local solar installer and/or tax professional to best understand what incentives will apply to your specific situation.
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