2023 Solar Incentives Guide for Auburn, AL - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Auburn.
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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Updated May 04, 2023
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What Solar Tax Credits, Incentives, and Rebates are Available in Auburn?
Local Option- Property Tax Exemption for Renewable Energy Faclities
Alabama Power - Residential Heat Pump Loan Program
Dixie Electric Cooperative - Residential Energy Efficiency Rebate Program
Federal Residential Renewable Energy Tax Credit
Source: https://www.dsireusa.org/
Solar incentives are designed to mitigate the cost of installing a solar panel system on your home. Financial incentives like these are in place to encourage more homeowners to switch their home over to renewable energy. Solar incentives might include upfront discounts, cash back or monthly credits towards your utility bill. Some incentives are offered by the federal government, some by the Alabama government and some by your utility company, county or municipality. Types of solar incentives might include:
- Tax Exemptions: Tax exemptions can come in two forms. The first is sales tax exemption, applied at the time you purchase your solar panels. The second is property tax exemption. This allows you to ignore the value added by your solar system when calculating property tax for your house.
- Net Metering: You can sign a net metering agreement with your Auburn utility company that will apply to all or a percentage of the excess electricity your solar panels generate. They will then subtract this value from your utility bill each month.
- Rebates: A solar rebate is a partial refund credited to your account after you've paid for your solar system. These may be offered by your local utility company, your county or your state. The discount that rebates offer is normally applied to the price of solar panels before tax credits are calculated.
- Tax Credits: Tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the federal government. (This is different from a tax deduction.)
Federal Solar Incentives
Federal incentives are the type of incentives that you are most likely to have heard of. A federal incentive that most people are probably familiar with is the Federal Solar Investment Tax Credit (ITC). The ITC is a tax credit for a given percentage of the cost of your solar system.
The ITC can be applied to the total cost of solar panel installation, including the panels themselves as well as accessories, equipment and labor. This credit can be claimed for panels installed after January 1, 2006 on a primary or secondary residence located in the United States that you own. From its original value of 30% of the total cost, the credit has fluctuated slightly between 26-30%, and you may qualify for varying percentages depending on when your project was completed. There is no maximum amount you can claim.
Wondering how the ITC applies to your specific situation? Get in touch with your local Auburn solar panel installer to get 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. The new Clean Energy Credit now runs until 2035. Homeowners are now eligible for a 30% credit for solar systems that began installation after January 1, 2022 and are completed by the end of 2032. The credit will then decrease annually until the date of expiration. Starting in 2023, it will also be easier to qualify for credits for energy storage systems with the new act.
More information about the new Inflation Reduction Act can be found here. The best way to learn more about how the new Clean Energy Credit will apply to you is to talk with your local Auburn solar panel installation expert.
State & Local Solar Incentives
Rebates, tax credits and more can be claimed at multiple levels. On top of federal solar incentives, there are often state and local ones, too. Incentives might be provided by your county or municipality, or by the state of Alabama. Some incentives might only be available for a limited time, while others are ongoing.
Next Steps for Installing Solar in Auburn
Solar incentives might be provided by your local utility company, the federal government or the Alabama government. The growing number of incentives available has facilitated the nationwide growth of solar energy use in the last 15 years. We suggest talking to your local Auburn solar installation company to learn more about these incentives and to be sure that you're getting the largest number possible for your solar system.
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EcoWatch's Auburn, 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 apply to a property you own that is located within the United States, and most secondary residences will fall under this distinction. There may be other solar incentives available for commercial properties, depending on the specifics. We recommend getting in touch with your local solar installer and/or tax professional to fully understand what incentives may apply to your specific situation.
My home already has solar panels installed. Does my system qualify for any incentives?
An excellent idea would be to talk to someone from the company that installed your system — or call a local Auburn solar installer — to learn about which incentives you may qualify for. If your system was installed after January 1, 2022, you likely qualify for the newly increased 30% tax credit under the Inflation Reduction Act. Solar panels installed between 2006 and 2021 may qualify for a tax credit of 26-30%.
How much can I save on my electric bill annually if I add solar panels to my house in Auburn?
On average, Auburn homeowners who install solar panels save approximately $1,093.31 per year, or approximately $20,772.82 over 20 years after they make the switch.
What are some environmental benefits of installing solar panels on my house?
Solar energy is a renewable energy source — by switching where you get your energy, you help lessen the strain on our planet's resources. Solar panels can also lower the CO2 emissions from your home by 450 pounds annually, or roughly 9,000 pounds over 20 years.
Can I use multiple types of renewable energy to power my home?
You can use multiple types of renewable energy, or a combination of renewable and non-renewable energy, to power your home. Make sure you discuss your ideas with your local Auburn solar installation expert. They can help you plan your project and also help you understand the various incentives that you will or won't qualify for.
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.