2023 Solar Incentives Guide for Bessemer, AL - Tax Credits & Rebates

In this guide, we'll cover the latest solar incentives and rebates available in Bessemer.

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 Bessemer solar installers to see how much you can save.

By EcoWatch Local Advisors

Data Analysis: James Savino

Ranking Methodology: Karsten Neumeister

Updated January 20, 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 Bessemer?

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

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/


Solar incentives are designed to make renewable energy usage more affordable via financial incentives to help people install solar panels on their homes. Different types of incentives, like cash back, discounts or monthly utility bill credits, might be available to you. Certain incentives may be provided via the state of Alabama, by your utility company or by county or municipality, while other incentives are federal. Some solar incentives you might qualify for are:

  • Rebates: Solar rebates might be provided by your state or county, or by your local utility company. These rebates are essentially cash back that is applied after your purchase of solar panels and before tax credits are calculated.
  • Tax Exemptions: Your solar system may qualify for both sales tax and property tax exemptions. Sales tax exemptions come into effect at the time of purchase. Property tax exemptions allow you to exclude the added value of the solar panels when calculating property taxes on your house.
  • Net Metering: Net metering factors in after your solar panels are up and running. If you've signed a net metering agreement with your Bessemer utility company, it will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some areas, this credit is dollar-for-dollar, while in other places you may get refunded a percentage of the value.
  • Tax Credits: Tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the government. (A tax credit is different from a tax deduction.)

Federal Solar Incentives

When thinking about solar incentives, federal incentives may be the first thing that comes to mind. The Federal Solar Investment Tax Credit, or ITC, is probably the best-known federal solar incentive. The ITC offers a tax credit for a predetermined percentage of the cost of your solar system.

The ITC can be applied to the total cost of installing solar panels, including the panels themselves as well as labor, equipment and accessories. You can claim this credit for panels installed after January 1, 2006 on a primary or secondary residence located in the United States that you own. Originally set at 30% of total costs, the credit has fluctuated over time, and you may qualify for different amounts depending on when your project was completed. There is no maximum amount you can claim.

To better understand how the ITC might apply to you, speak to your local Bessemer solar panel installation expert and request more information.

In August 2022, the ITC (now called the Clean Energy Credit) was expanded and extended by the passage of the Inflation Reduction Act. The Clean Energy Credit re-raises the credit up to 30% for solar systems installed between 2022 and 2032. After 2032, the credit percentage will decrease slightly each year until the program expires in 2035. Starting in 2023, the 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 Bessemer solar panel installation experts can answer any questions you have and explain how the new Clean Energy Credit applies to you.

State & Local Solar Incentives

Rebates, tax credits and more might be provided at multiple levels. On top of federal solar incentives, there are often state and local ones as well. These incentives may be distributed by the Alabama government, or by your county or municipality. Some incentives may be ongoing, while others are available for a limited time.

Next Steps for Installing Solar in Bessemer

Solar energy use nationwide has significantly increased in the last 15 years, in part due to the increase in availability of solar incentives. You can obtain these incentives from your local utility company, the Alabama government or the federal government. We recommend talking to your local Bessemer solar installer to learn more about these incentives and to make sure that you're getting all of the money you can for your solar system.

Best National Provider

SunPower

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Tesla Energy

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EcoWatch's Bessemer, AL Solar Incentives FAQs

How do I learn if I qualify for different solar incentives?

Typically, solar incentives apply to:

  1. a new solar panel system
  2. installed on a property that you own
  3. within the U.S.
  4. within the date range specified by a particular incentive.

Specific incentives, including those run by the Alabama government or by your county/municipality, may have additional qualifications. Speak with your local Bessemer solar installer to find out what incentives your project will qualify for.

Who installs solar panels near me?

To find a top-rated solar panel installer, check out our guide to Bessemer's best solar panel companies.

What are some environmental benefits of adding solar panels to my house?

Solar energy is a renewable energy source — by switching where you get your energy, you can help reduce 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 in 20 years.

How long until the federal solar tax credit ends?

The federal solar tax credit, formerly known as the ITC and now called the Clean Energy Credit, is set to end on January 1, 2035. The current 30% credit will end in 2032, replaced by a 26% credit in 2033 and a 22% credit in 2034.

Can I use a combination of multiple types of renewable energy to power my home?

Yes, you can use multiple types of renewable energy to power your home — for example, a combination of solar and geothermal. You can also use both renewable energy sources and a non-renewable backup source of energy. Be sure to discuss the details of your plan with your local Bessemer solar panel installer, to get an understanding of what will be needed and what incentives you may or may not 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.

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