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
Solar installers are experts in maximizing your solar tax credits and rebates.
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By EcoWatch Local Advisors
Data Analysis: James Savino
Ranking Methodology: Karsten Neumeister
Updated March 14, 2023
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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
Solar incentives are meant to encourage homeowners to make the switch to renewable energy by providing incentives that lower the financial burden of solar panel installation and use. The incentives could include upfront discounts, cash back or monthly credits towards your utility bill. Some incentives are provided by the federal government, some by the state of Alabama and some by your utility company, county or municipality. Some solar incentives you might qualify for are:
- Tax Exemptions: These can come in the form of property tax exemptions, which can let you exclude the value added by your solar panels when paying property tax on your house. They may also include exemptions on sales tax at the time of purchase.
- Rebates: Solar companies may help you claim a rebate, or partial refund after purchase, for your solar system. Counties or states will also offer limited-time rebates at various times. If you receive a rebate, that amount will usually come off the total price before any tax credits are calculated.
- Net Metering: Make sure you talk with your Alabaster utility company about signing a net metering contract. This allows you to receive credit towards your monthly utility bill for the value of excess energy your solar panels generate. You may receive either a dollar-for-dollar credit or a percentage of the value.
- Tax Credits: Tax credits lower, dollar-for-dollar, how much income tax you owe the federal government. Tax credits are different from tax deductions.
Federal Solar Incentives
Federal solar incentives are likely to be the first thing that you think of when thinking about solar incentives. You've likely heard of the Federal Solar Investment Tax Credit, or ITC. The ITC is a tax credit that reduces your taxes by a predetermined percentage of the money you spend on solar panels for your home.
The ITC initially applied to 30% of the total cost of solar panel installation, although it has fluctuated slightly over the last few years between 26-30%. The percentage you qualify for will depend on when your solar system was installed. The total installation cost includes the panels themselves as well as the cost of accessories, labor and equipment. There is no maximum amount you can claim. The ITC applies to solar panels installed after January 1, 2006 on your primary or secondary residence. The residence must be in the United States and owned by you.
Wondering how the ITC applies to your specific situation? Contact your local Alabaster solar panel installer to get more information.
The Inflation Reduction Act, passed in August 2022, expanded and extended the ITC (as well as renaming it to the Clean Energy Credit). Homeowners are now eligible for a credit equal to 30% of the total costs of solar system installation for projects started after January 1, 2022 and completed before the end of 2032. The percentage will then begin to decrease yearly until the Clean Energy Credit ends in 2035. The program expansion also makes claiming credit for energy storage systems easier than ever before, starting 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
Some solar incentives may be offered at the local or state level. Like with federal incentives, these may include tax credits, rebates and more. Certain incentives are offered for only a limited time, while others are ongoing. Local solar incentives could come from the Alabama government, or from your specific county or municipality.
Next Steps for Installing Solar in Alabaster
The variety of solar incentives available has enormously increased the nationwide adoption of solar energy over the last 15 years. You may receive solar incentives from your local utility company, the federal government or the Alabama government. We suggest talking to your local Alabaster solar installer to learn more about these incentives and to ensure that you're getting the most money possible for your solar system.
- Price-match guarantee
- Sleek, efficient, and durable solar panels
- Best solar battery on the market
- Some reported issues with customer service
- Customer service varies by local dealer
EcoWatch's Alabaster, AL Solar Incentives FAQs
What if I want to add a solar system to a rental property, vacation home or commercial property? Do I still qualify for incentives?
Many solar incentives are intended to apply to a property you own that is located within the United States, and most secondary residences will fall under this distinction. Other solar incentives may be available for commercial properties, depending on the details. We recommend speaking with your local solar installer and/or tax professional to best understand what incentives apply to your specific situation.
How do I learn if I qualify for certain solar incentives?
Broadly, solar incentives apply to:
- a new solar system
- installed on property that you own
- within the U.S.
- within the date range specified by a particular incentive.
Specific incentives, including those given out by the Alabama government or by your county/municipality, could have additional qualifications. Talk to your local Alabaster solar installer to find out what incentives your project will qualify for.
What are the environmental benefits of switching to solar?
Solar energy is a renewable energy source — by changing where you get your energy, you help reduce the strain on our planet's resources. Solar panels can also reduce the CO2 emissions from your home by 450 pounds a year, or roughly 9,000 pounds over 20 years.
Can I claim incentives both towards the up-front cost of solar panels, and later as reimbursement?
Yes, you can claim both rebates and tax credits towards the cost of solar panels. Depending on precisely which incentives you are eligible for, they may apply in a different order. Be sure to talk to your solar installer or a local tax professional to verify that you are claiming incentives correctly and getting the most money possible.
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.
Solar incentive research was conducted by Melissa Smith and Karsten Neumeister. Local data analysis was conducted by James Savino. See something we missed or could do better? Email the editor.