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
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What Solar Tax Credits, Incentives, and Rebates are Available in Bessemer?
Wood-Burning Heating System Deduction
Local Option- Property Tax Exemption for Renewable Energy Faclities
Alabama Power - Residential Heat Pump Loan Program
Federal Residential Renewable Energy Tax Credit
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.
EcoWatch's Bessemer, AL Solar Incentives FAQs
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