2025 Solar Incentives Guide for Alexander City, AL - Tax Credits & Rebates

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

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

The term "solar incentives" refers to financial incentives designed to encourage the use of renewable energy by making the installation and use of solar panels more affordable. Incentives can include things like discounts, cash back or credit on your utility bill each month. Some incentives are offered by the federal government, while others are offered by the Alabama government or by your utility company, county or municipality. You might qualify for any of the following types of solar incentives:

• Rebates: Solar rebates can be offered by your county or state, or by your local utility company. These rebates work as cash back that is applied after you pay for a solar system and before tax credits are calculated.
• Tax Credits: Tax credits lower, dollar-for-dollar, the amount of income tax you owe the government. These are different from tax deductions.
• Tax Exemptions: These could come in the form of property tax exemptions, which let you ignore the value added by your solar panels when paying taxes on your house. They may also include exemptions on sales tax at the time of purchase.
• Net Metering: Net metering becomes relevant after your solar panels are up and running. If you've signed a net metering agreement with your Alexander City utility company, the company will subtract the value of the excess energy your solar system produces from your monthly utility bill. In some areas, this credit is dollar-for-dollar, while in others you may make back a percentage of the value.

Federal Solar Incentives

When thinking about solar incentives, federal incentives may be the first thing that comes to mind. The solar incentive that you may be most familiar with is the Federal Solar Investment Tax Credit (ITC), which gives you a credit on your taxes equal to a certain percentage of the cost of your solar system.

The ITC applies to solar panels installed after January 1, 2006, on a primary or secondary residence in the United States that you own. Initially, the credit applied to 30% of the total cost – for panels, accessories, labor and equipment – although the percentage may range from 26-30%, depending on when your solar system was installed. There is no cap on the amount you can claim.

To best understand how the ITC could apply to you, speak to your local Alexander City solar panel installer and ask for more information.

In August 2022, the ITC (now titled the Clean Energy Credit) was bolstered by the passage of the Inflation Reduction Act. The new Clean Energy Credit is valid until 2035. American homeowners can now apply for a 30% credit for solar systems installed between January 1, 2022, and December 31, 2032. The total credit will then be decreased by a few percentage points every year until it expires. The expansion also makes it easier to get credit for energy storage systems, beginning in 2023.

Click here to learn more about the new Inflation Reduction Act. Your local Alexander City solar panel installer can answer your questions and explain how the new Clean Energy Credit may apply to you.

State & Local Solar Incentives

Some solar incentives may be provided by state and local governments. As with federal incentives, these can include tax credits, rebates and more. These incentives may be given out by your county or municipality, or by the Alabama government. Certain incentives are ongoing, while others are available for a limited time.

Next Steps for Installing Solar in Alexander City

Solar incentives may come from the Alabama government, the federal government or your local utility company. The variety of incentives available has helped nationwide use of solar energy increase greatly in the last 15 years. Your local Alexander City solar panel installation expert can help you learn more about which incentives you may qualify for, and get you started on the path to switching to renewable energy today.