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

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

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

Solar incentives are designed to mitigate the cost of installing solar panels on your home. These financial incentives are designed to encourage more people to convert their home partially or fully to renewable energy. Solar incentives could include cash back, upfront discounts or credit towards your monthly utility bill. Some incentives are handled by the federal government, some by the Alabama government and some by your specific utility company, county or municipality. Some broad categories of solar incentives include:

• Tax Exemptions: These can come in the form of property tax exemptions, which allow you to ignore 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.
• Net Metering: You can sign a net metering agreement with your Auburn utility company, that may apply to all or a percentage of the excess electricity that is generated by your solar panels. They will then subtract this value from your monthly utility bill.
• Rebates: Solar rebates might be offered by your local utility company, or by your county or state. These rebates work as cash back that is applied after your purchase of a solar system and before tax credits are calculated.
• Tax Credits: Different from tax deductions, tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the government.

Federal Solar Incentives

When someone says "solar incentives," you probably think of federal incentives first. You may have 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 your solar system.

The ITC is applied to the total cost of solar panel installation, including the panels themselves as well as labor, accessories and equipment. This credit can be claimed for panels installed after January 1, 2006, on a primary or secondary residence that you own, as long as it is located in the United States. The tax credit ranges from 26-30% of total costs depending on when your project was completed. There is no maximum claim amount.

Your local Auburn solar panel installation expert can give you more information about the ITC and how it might apply to your situation.

In August 2022, the ITC (now called the Clean Energy Credit) was bolstered by the passage of the Inflation Reduction Act. Now, solar installation projects begun after January 1, 2022, and finished by December 31, 2032, might qualify for a 30% tax credit. This percentage will then decrease slightly each year until the end of the current Clean Energy Credit in 2035. Starting in 2023, the program expansion will also make it easier to get credit for energy storage systems.

More information about the new Inflation Reduction Act can be found here. Your local Auburn solar panel company is the best resource for answering your questions regarding the new Clean Energy Credit and how it will apply to you.

State & Local Solar Incentives

Some solar incentives may be provided by state and local governments. As with federal incentives, these might include tax credits, rebates and more. Incentives may be offered by the state of Alabama, or by your county or municipality. Some incentives may be available for only a limited time, while others are ongoing.

Next Steps for Installing Solar in Auburn

Solar incentives may come from the federal government, the Alabama government or your local utility company. The large number of available incentives has contributed to a large increase in solar energy use in the last 15 years. It is a good idea to talk to your local Auburn solar installation company to learn more about these incentives and to be sure that you're getting the most money possible for your solar system.