2023 Solar Incentives Guide for Centre, AL - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Centre.
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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By EcoWatch Local Advisors
Data Analysis: James Savino
Ranking Methodology: Karsten Neumeister
Updated May 04, 2023
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What Solar Tax Credits, Incentives, and Rebates are Available in Centre?
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
The term "solar incentives" generally refers to financial incentives designed to encourage increased use of renewable energy by making solar panels more affordable. You might be eligible for several kinds of incentives, such as discounts, cash back or credit towards your monthly utility bill, depending on your situation. Some incentives come from your specific utility company, county or municipality, some from the Alabama government and others from the federal government. You might qualify for any of the following types of solar incentives:
- Tax Exemptions: Sales tax exemptions go into effect at the time of purchase for your solar panels. Property tax exemptions allow you to exclude the added value of your solar system when you calculate how much property tax you need to pay.
- 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.)
- Rebates: A rebate is a partial refund given after you've purchased your solar panels. Rebates might be offered by your local utility company, your state or your county. The discount that rebates offer is normally applied to the price of solar panels before calculating tax credits.
- Net Metering: Don't forget to talk to your Centre utility company about signing a net metering agreement. This allows you to receive credit towards your monthly utility bill for the value of excess energy your solar panels generate. You may receive either a dollar-for-dollar credit or a percentage of the value.
Federal Solar Incentives
When thinking about solar incentives, you likely think of federal incentives first. A federal incentive that most people are likely to be familiar with is the Federal Solar Investment Tax Credit (ITC). This is a tax credit for a certain percentage of the cost of your solar system.
The ITC can be applied to solar systems installed after January 1, 2006 and lets you deduct from your taxes a percentage of the total cost of solar panels, accessories, labor and equipment. This credit can apply towards a solar panel system installed on a primary or secondary residence that you own in the United States. The original claim amount was 30% of the total cost, although depending on when the project was completed, your credit may range from 26-30%. There is no maximum amount you can claim.
To better understand how the ITC may apply to your situation, reach out to your local Centre solar panel installer and ask for more information.
In August 2022, the Inflation Reduction Act expanded and extended the ITC, now dubbed the Clean Energy Credit. The Clean Energy Credit re-raises the credit up to 30% for solar installations undertaken between January 1, 2022 and December 31, 2032. After this, the credit percentage will decrease slightly each year until the program expires in 2035. Starting in 2023, it will also be easier to claim credits for energy storage systems with the new act.
Click here to learn more about the new Inflation Reduction Act. To fully understand how the new Clean Energy Credit applies to you, speak with your local Centre solar installation company.
State & Local Solar Incentives
Some solar incentives are often also provided at the state and local level. As with federal incentives, these might include rebates, tax credits and more. Incentives might be handled 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 Centre
The expanding number of available solar incentives has contributed greatly to the increase in the adoption of solar energy nationwide over the past 15 years. You can get solar incentives from the Alabama government, the federal government or your local utility company. Your local Centre solar panel installer can give you more information about which incentives you should apply for, and get you feeling good about making the change to renewable energy today.
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- Best solar battery on the market
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- Customer service varies by local dealer
EcoWatch's Centre, AL Solar Incentives FAQs
Can I receive any incentives when I add solar panels to a vacation home, rental property or commercial property?
While we recommend talking to your local solar installer and/or tax professional to fully understand what solar incentives apply to you, many incentives apply to a second home, provided that it is in the United States and owned by you. There may be additional incentives available for commercial properties specifically, depending on the specifics.
My home already has solar panels. Does my system 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 had your system installed between 2006 and 2021, you may qualify for a tax credit between 26% and 30%, depending on the date of installation. Speaking with a representative from the company that installed your system, or any local Centre solar installer, can help you understand what incentives you might want to apply for.
What are the best solar panel installation companies near me?
To find a top-rated solar panel installer, check out our guide to the best solar companies in Centre.
How long until the federal solar tax credit ends?
The federal solar tax credit, formerly called 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.
I want to trade in my old appliances for ones that are more energy-efficient. Are there any incentives I can get?
The recently passed Inflation Reduction Act includes provisions for a number of incentives that reward homeowners for making eco-friendly upgrades. Some of these incentives include tax credits and rebates for installing new electric appliances. You can find more details about these incentives here.
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.