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.
Get a free quote from one of our trusted Alabaster solar installers to see how much you can save.

By EcoWatch Local Advisors

Data Analysis: James Savino

Ranking Methodology: Karsten Neumeister

Updated September 15, 2023

Why you can trust EcoWatch

We work with a panel of solar experts to create unbiased reviews that empower you to make the right choice for your home. No other site has covered renewables as long as us, which means we have more data and insider information than other sites. Our rankings are never affected by revenue or partnerships.

What Solar Tax Credits, Incentives, and Rebates are Available in Alabaster?

Wood-Burning Heating System Deduction

Incentive Type:
Personal Tax Deduction

Local Option- Property Tax Exemption for Renewable Energy Faclities

Incentive Type:
Property Tax Incentive

Alabama Power - Residential Heat Pump Loan Program

Incentive Type:
Loan Program
Varies, up to 100% of project cost for qualifying customers

Central Alabama Electric Cooperative - Residential Energy Efficiency Rebate Program

Incentive Type:
Rebate Program
Water Heater: $235 - $375
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

Incentive Type:
Personal Tax Credit
30% federal tax credit for systems placed in service after 12/31/2021 and before 01/01/2033. Good for: solar water heat, solar photovoltaics, biomass, geothermal heat pumps, wind (small), fuel cells using renewable fuels.

Source: https://www.dsireusa.org/


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.

Best National Provider

SunPower

★★★★★
5.0

  • Most efficient panels on the market
  • National coverage
  • Cradle to Cradle sustainability certification
  • Great warranty coverage
  • Expensive
  • Customer service varies by local dealer

Best Technology

Tesla Energy

★★★★★
3.2

  • 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

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

How can I learn if I qualify for solar incentives?

It's a smart idea to get in touch with your local Alabaster solar installer for a better understanding of which incentives your project will qualify for. Usually, solar incentives apply to new solar panel systems installed on a property you own (in the U.S.) between the dates specified by the incentive. Some incentives, such as those provided by the Alabama government, might have other requirements.

If I installed solar panels on my house a few years ago, can I still claim incentives?

If your solar panels were installed after January 1, 2022, you may qualify for the recently increased 30% tax credit under the Inflation Reduction Act. If your system was installed between 2006 and 2021, you may qualify for a tax credit between 26% and 30%, depending on the date of installation. Speaking with a representative from the company that installed your solar system, or any local Alabaster solar installer, can help you learn more about what incentives you can apply for.

How much can I save annually on my electric bill if I add solar panels to my Alabaster home?

Typically, homeowners in Alabaster who install solar panels save approximately $1,109.02 per year, or approximately $21,071.41 over 20 years after making the switch.

How long until the federal solar tax credit ends?

The Clean Energy Credit (previously referred to as the federal solar tax credit, or ITC), is slated to end on January 1, 2035. Currently set at 30%, the credit will drop to 26% in 2033 and to 22% in 2034.

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.

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