2023 Solar Incentives Guide for Calera, AL - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Calera.
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 Calera?
Local Option- Property Tax Exemption for Renewable Energy Faclities
Alabama Power - Residential Heat Pump Loan Program
Central Alabama Electric Cooperative - Residential Energy Efficiency Rebate Program
Dual Fuel or Mini-Split Heat pumps: $300- $350/ton
Converting furnace to heat pump in new manufactured homes: $400-$700
Converting furnace to heat pump in existing manufactured homes: $400/ton
Federal Residential Renewable Energy Tax Credit
Source: https://www.dsireusa.org/
Solar incentives mitigate the cost of installing solar panels on your home. This category of financial incentives is designed to encourage more people to switch their home over to renewable energy. Incentives might include things like discounts, cash back or credit towards your monthly utility bill. Some incentives are offered federally, while others are offered by the state of Alabama or your specific utility company, county or municipality. Categories of solar incentives include:
- 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 ignore the added value of the solar panels when calculating property taxes on your home.
- Rebates: Solar rebates can be offered by your state or county, or by your local utility company. These rebates work as partial refunds that are applied after you pay for a solar system and before tax credits are calculated.
- Tax Credits: Tax credits are dollar-for-dollar reductions (not deductions) in how much in taxes you owe the federal government.
- Net Metering: Net metering factors in after your solar system is up and running. If you have a net metering agreement in place with your Calera utility company, they will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some areas, this is a dollar-for-dollar credit, while in other areas you may be refunded a percentage of the value.
Federal Solar Incentives
When thinking about solar incentives, federal incentives may be the first thing that comes to mind. One of the incentives many people are likely familiar with is the Federal Solar Investment Tax Credit (ITC). This is a tax credit for a certain percentage of your solar system's cost.
The ITC can be applied to the total cost of solar system installation, including the panels themselves as well as equipment, accessories and labor. You can claim this credit 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. 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.
To better understand how the ITC will apply to your situation, get in touch with your local Calera solar panel installer and ask for more information.
In August 2022, the ITC (now titled the Clean Energy Credit) was bolstered by the passage of the Inflation Reduction Act. Homeowners are now eligible for a credit of 30% of the total solar system installation costs for projects started after January 1, 2022 and completed before the end of 2032. The percentage will then begin to decrease yearly until the Clean Energy Credit expires in 2035. Starting in 2023, the program expansion will also make claiming credit for energy storage systems easier than ever before.
Click here to learn more about the new Inflation Reduction Act. Your local Calera solar panel installation expert is the best person to answer your questions about the new Clean Energy Credit and how it may apply to you.
State & Local Solar Incentives
Federal solar incentives are not your only option; tax credits, rebates and more are often offered at the local or state level. Incentives may be offered by your county or municipality, or by the state of Alabama. Certain incentives might only be available for a limited time, while others are ongoing.
Next Steps for Installing Solar in Calera
The nationwide use of solar energy has gone up tremendously in the last 15 years, in part due to the proliferation of solar incentives. You might receive these incentives from your local utility company, the federal government or the Alabama government. Your local Calera solar panel installer can help you learn more about which incentives you can apply for, and get you on track to switch to renewable energy today.
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EcoWatch's Calera, AL Solar Incentives FAQs
What if I add a solar system to a rental property, vacation home or commercial property? Can I still qualify for incentives?
While we recommend talking to your local solar installer and/or tax professional to best understand what solar incentives apply to you, many incentives can be claimed on a second home, so long as that home is in the United States and owned by you. There may be additional incentives available specifically for commercial properties, depending on the details.
How much can I save on my electric bill annually if I install solar panels on my Calera home?
Generally, Calera homeowners who install solar panels save approximately $1,135.80 per year, or approximately $21,580.20 over 20 years after they make the switch.
When does the federal solar tax credit end?
The federal solar tax credit, formerly known as the ITC and now called the Clean Energy Credit, is scheduled to end January 1, 2035. The current 30% credit will end in 2032, replaced by a 26% credit in 2033 and a 22% credit in 2034.
I want to switch my appliances out for ones that are more energy-efficient. Are there any incentives I can apply for?
Under the new Inflation Reduction Act, there are several new financial incentives for making eco-friendly improvements to your home. More details on these incentives, including information about incentives for purchasing new appliances, can be found here.
Can I use a combination of multiple types of renewable energy to power my home?
Yes, you can employ multiple types of renewable energy to power your home, such as a combination of solar and geothermal. You can also combine renewable energy generation with a non-renewable backup source of energy. You should discuss your proposed plan with your local Calera solar panel installer, to make sure you know what you'll need and what kinds of incentives 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.