2024 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 2024 and beyond)
- Ways to optimize your solar investment
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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 are intended to make renewable energy usage more affordable through financial incentives for those who install solar panels on their homes. Incentives might include things like discounts, cash back or credit towards your monthly utility bill. Some incentives are handled federally, while others are handled by the state of Alabama or by your utility company, county or municipality. Some solar incentives you might qualify for are:
- Tax Exemptions: Sales tax exemptions are applied at the time of purchase for your solar system. Property tax exemptions allow you to exclude the added value of your solar system when you're calculating how much property tax you need to pay on your house.
- Net Metering: Net metering factors in after your solar system is up and running. If you have in place a net metering agreement with your Calera utility company, it will subtract the value of the excess energy produced by your solar system from your utility bill each month. In some places, this credit is dollar-for-dollar, while in other places you may receive a refund equivalent to a percentage of the value.
- Tax Credits: Tax credits lower, dollar-for-dollar, the total amount of tax you owe the government. Tax credits are different from tax deductions.
- Rebates: Solar companies may help you claim a rebate, or partial refund of your purchase, for your solar system. Counties or states will also sometimes offer limited-time rebates. Any rebates you receive will usually come off your total price before any tax credits are calculated.
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Federal Solar Incentives
When you hear the term "solar incentives," federal incentives might be the first thing that comes to mind. You've likely heard of the Federal Solar Investment Tax Credit, or ITC. This incentive is a tax credit equal to a specified percentage of the money you spend on solar panels for your home.
The ITC initially applied to 30% of the total cost of installing a solar system, and has fluctuated slightly over time between 26-30%. The installation date of your solar system will determine what percentage you qualify for. The total cost of installation includes the panels themselves as well as the cost of accessories, equipment and labor. There is no maximum amount you can claim. The ITC can be applied to solar panels installed after January 1, 2006, on your primary or secondary residence. The residence must be in the United States and owned by you.
Your local Calera solar panel installer can provide you with more information about the ITC and how it may apply to your situation.
In August 2022, the ITC (now titled the Clean Energy Credit) was bolstered by the passage of the Inflation Reduction Act. For solar systems installed between January 1, 2022, and December 31, 2032, homeowners can apply for a credit for 30% of the total cost. This percentage will decrease annually after 2032 until the Clean Energy Credit expires in 2035. The expansion also makes claiming credit for energy storage systems easier than ever before, starting in 2023.
More information about the new Inflation Reduction Act can be found here. The easiest way to fully understand how the new Clean Energy Credit will apply to you is to talk with your local Calera solar panel company.
State & Local Solar Incentives
There are often state solar incentives available in addition to federal ones. Rebates, tax credits and more might be available at a more local level. These incentives may be distributed by your county or municipality, or by the Alabama government. Certain incentives are ongoing, while others are available for a limited time.
Next Steps for Installing Solar in Calera
Nationwide solar energy use has gone up tremendously in the past 15 years, in part thanks to the proliferation of solar incentives. You may get these incentives from the federal government, the Alabama government or your local utility company. Speaking with your local Calera solar panel installation company is the right first step towards getting all the incentives you qualify for when you switch to solar energy.
EcoWatch's Calera, AL Solar Incentives FAQs
My home already has solar panels. Do I qualify for any incentives?
If your solar system was installed after January 1, 2022, you may qualify for the recently increased 30% tax credit under the Inflation Reduction Act. If you installed your system between 2006 and 2021, you may qualify for a tax credit between 26% and 30%, depending on the date of installation. Talking to the company that installed your solar system, or any local Calera solar installer, can help you understand what incentives you might want to apply for.
How much will solar panels save me on my electric bill in Calera annually?
Generally, Calera homeowners who install solar panels save around $1,135.80 per year, or about $21,580.20 over 20 years after making the switch.
When does the federal solar tax credit end?
The Clean Energy Credit (previously called the federal solar tax credit, or ITC), currently ends on January 1, 2035. Currently set at 30%, the credit will drop to 26% in 2033 and to 22% in 2034.
If I switch my appliances out for ones that can utilize solar energy, are there any credits that I can claim?
The recently passed Inflation Reduction Act includes provisions for a number of incentives that reward homeowners who make eco-friendly upgrades. Some of these incentives include rebates and tax credits for installing new electric appliances. You can find more details about these incentives here.
Can I use a combination of multiple types of renewable energy to power my home?
Yes, you can utilize multiple types of renewable energy to power your home, such as a combination of geothermal and solar. You can also use both renewable energy sources and a backup source of non-renewable energy. Be sure to discuss your plan with your local Calera solar installation expert, 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.