2023 Solar Incentives Guide for Clay, AL - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Clay.
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 Clay?
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 for those who install solar panels on their homes. Incentives may include things like discounts, cash back or credit towards your monthly utility bill. Some incentives are handled federally, while others are offered by the state of Alabama or by your utility company, county or municipality. Some broad categories of solar incentives include:
- Net Metering: Net metering is an incentive you can get after your solar panels are up and running. If you've signed a net metering agreement with your Clay utility company, the company will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some locations, this is a dollar-for-dollar credit, while in other areas you might receive a refund equivalent to a percentage of the value.
- Tax Exemptions: Sales tax exemptions are effective at the point of sale for your solar system. Property tax exemptions let you ignore the value that your solar panels add when you're calculating the amount of property tax you need to pay on your home.
- Rebates: Rebates, or partial refunds after a purchase, are normally given before any solar tax credits are calculated. Rebates can be given by your local utility company, by your county or by your state.
- Tax Credits: Tax credits are dollar-for-dollar reductions (not deductions) in the amount of tax that you owe the federal government.
Federal Solar Incentives
Federal solar incentives are likely the first thing that comes to mind when thinking about solar incentives. You might have heard of the Federal Solar Investment Tax Credit, or ITC. The ITC is a tax credit that reduces your taxes by a certain percentage of the money you spend on solar panels for your home.
The ITC applies to solar panels installed after January 1, 2006 on a primary or secondary residence in the United States that you own. Initially, the credit applied to 30% of the total cost — for panels, accessories, equipment and labor — although the percentage may range from 26-30%, depending on the installation date of your solar system. There is no cap on the amount you can claim.
Contacting your local Clay solar panel installer is the best way to understand how the ITC applies to you.
In August 2022, the ITC (now titled the Clean Energy Credit) was expanded and extended by the passing of the Inflation Reduction Act. For solar systems installed between January 1, 2022 and December 31, 2032, homeowners may be eligible for a credit for 30% of the total cost. The percentage will then decrease annually until the Clean Energy Credit expires in 2035. Starting in 2023, it will also be easier to obtain credits for energy storage systems under the new laws.
More information about the new Inflation Reduction Act can be found here. Your local Clay solar panel company can answer any questions you have and explain how the new Clean Energy Credit applies 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. Certain incentives are ongoing, while others are offered for only a limited time. Local solar incentives might come from your county or municipality, or from the Alabama government.
Next Steps for Installing Solar in Clay
There are a variety of solar incentives: those offered by local utility companies, those offered by the Alabama government and those offered by the federal government, to name a few. The use of solar energy has increased tremendously in the last 15 years, partially thanks to these incentives. Talking to your local Clay solar panel installation company is the right first step towards getting all the incentives you qualify for when you switch to solar energy.
- Price-match guarantee
- Sleek, efficient, and durable solar panels
- Best solar battery on the market
- Some reported issues with customer service
- Customer service varies by local dealer
EcoWatch's Clay, AL Solar Incentives FAQs
Can I get any financial incentives when I add solar panels to a rental property, vacation home or commercial property?
Many solar incentives are intended to apply to a property you own that is located within the United States; most secondary residences will fall under this distinction. There may be other solar incentives available for commercial properties, depending on the details. We recommend speaking with your local solar installer and/or tax professional to best understand what incentives may apply to your specific situation.
How much will solar panels save me annually on my electric bill in Clay?
On average, Clay homeowners who install solar panels save around $1,126.60 per year, or around $21,405.40 over 20 years after making the switch.
What are the top solar panel installation companies near me?
To learn about the top solar panel installers near you, take a look at our article on the best solar companies in Clay.
What are the environmental benefits of switching to solar energy?
Solar energy is renewable — by switching where you get your energy, you can help lessen the strain on our planet's resources. Solar panels can also reduce your home's CO2 emissions by 450 pounds annually, or around 9,000 pounds over 20 years.
Can I qualify for incentives both towards the up-front cost of solar panels, and later as reimbursement?
The order your incentives will be applied in may vary depending on which incentives you receive but in most cases yes, you can receive multiple types of incentives for your solar project. Speak to your solar installer or a local tax professional to confirm you are claiming all possible incentives and applying them in the correct order.
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.