2023 Solar Incentives Guide for Andalusia, AL - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Andalusia.
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 Andalusia?
Wood-Burning Heating System Deduction
Local Option- Property Tax Exemption for Renewable Energy Faclities
Wiregrass Electric Cooperative - H2O Plus Program
Federal Residential Renewable Energy Tax Credit
Solar incentives help mitigate the cost of installing a solar panel system on your home. This category of financial incentives is intended to encourage more Americans to make the switch to renewable energy. You may qualify for different kinds of incentives, including discounts, cash back or monthly utility bill credits, depending on your situation. Some incentives come from your specific utility company, county or municipality, some from the state of Alabama and others from the federal government. Categories of solar incentives include:
- Tax Exemptions: Sales tax exemptions are applied at the point of sale for your solar system. Property tax exemptions allow you to ignore the value that your solar panels add when you calculate how much property tax you need to pay.
- Net Metering: Be sure to speak to your Andalusia utility company about signing a net metering contract. This allows you to get a credit towards your monthly utility bill for the value of excess energy generated by your solar panels. You may receive either a dollar-for-dollar credit or a percentage of the value.
- Tax Credits: These credits are dollar-for-dollar reductions (not deductions) in the amount of tax that you owe the federal government.
- Rebates: A rebate is a partial refund given after you've purchased your solar panels. Rebates may be offered by your local utility company, your state or your county. The rebates are usually applied before calculating tax credits.
Federal Solar Incentives
Federal solar incentives are probably the first thing that comes to mind when you think about solar incentives. You've likely heard of the Federal Solar Investment Tax Credit, or ITC. The ITC is a tax credit equal to a specified percentage of the money you spend on solar panels for your home.
The ITC applies to the value of solar panels installed on your primary or secondary residence in the United States. The solar panels have to have been installed after January 1, 2006 on a property owned by you for you to be eligible for the credit. The ITC originally paid out 30% of all system costs (panels, labor, equipment and accessories), although the total amount has fluctuated slightly over the years between 26-30%. The amount you qualify for will depend on when your solar system was installed. There is no cap on the claim amount.
Your local Andalusia solar panel installer can offer more information about the ITC and how it applies to your situation.
In August 2022, the ITC (now called the Clean Energy Credit) was bolstered by the passage of the Inflation Reduction Act. The Clean Energy Credit has increased the current credit up to 30% for solar installations undertaken between January 1, 2022 and December 31, 2032. At this point, the credit percentage will decrease slightly each year until the end of the program in 2035. The expansion also makes credits for energy storage systems even easier to claim, beginning in 2023.
Click here to learn more about the new Inflation Reduction Act. The easiest way to fully understand how the new Clean Energy Credit might apply to you is to speak with your local Andalusia solar panel installers directly.
State & Local Solar Incentives
There are often also state solar incentives in addition to those provided by the federal government. Tax credits, rebates and more may be available at a more local level. Some incentives are offered for only a limited time, while others are ongoing. Local solar incentives might come from your county or municipality, or from the Alabama government.
Next Steps for Installing Solar in Andalusia
Solar incentives can be provided by your local utility company, the federal government or the Alabama government. The growing number of available solar incentives has helped nationwide use of solar energy increase greatly in the last 15 years. It is a good idea to talk to your local Andalusia solar installation expert to learn more about these incentives and to ensure that you're getting all of the money you can for your solar system.
EcoWatch's Andalusia, 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.