2025 Solar Incentives Guide for Clay, AL - Tax Credits & Rebates

What Solar Tax Credits, Incentives, and Rebates are Available in Clay?

Source: https://www.dsireusa.org/

Solar incentives are intended to encourage people to make the switch to renewable energy by offering incentives meant to lower the financial burden of solar panel installation and use. You might qualify for several types of incentives, including discounts, cash back or monthly utility bill credits, depending on your situation. Certain incentives come from your specific utility company, county or municipality, some from the Alabama government and others from the federal government. Some solar incentives you might qualify for are:

• Rebates: Rebates, or cash back after a purchase, are typically applied prior to any solar tax credits being calculated. These rebates may be offered by your local utility company, by your state or by your county.
• Tax Credits: Tax credits lower, dollar-for-dollar, the total amount of tax you owe the government. These are different from tax deductions.
• 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 places, this credit is dollar-for-dollar, while in others 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 allow you to exclude the added value of your solar system when you're calculating the amount of property tax you need to pay.

Federal Solar Incentives

Federal solar incentives are probably the first thing that comes to mind when you think about solar incentives. You've likely heard of the Federal Solar Investment Tax Credit, or ITC. This is a tax credit equal to a predetermined percentage of the money you spend on your solar system.

The ITC applies to the total cost of installing solar panels, including the panels themselves as well as labor, accessories and equipment. 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. The tax credit ranges from 26-30% of total costs depending on when your project was completed. There is no maximum claim amount.

To find out exactly how much the ITC could save you, get in touch with your local Clay solar panel installation expert.

In August 2022, the Inflation Reduction Act made revisions to the ITC, now dubbed the Clean Energy Credit. 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. This percentage will then begin to decrease annually until the Clean Energy Credit ends in 2035. The expansion also makes claiming credit for energy storage systems easier than ever before, beginning in 2023.

More information about the new Inflation Reduction Act can be found here. Your local Clay solar panel company is the best resource for answering your questions regarding the new Clean Energy Credit and how it may apply to you.

State & Local Solar Incentives

Some solar incentives are often also offered at the local or state level. As with federal incentives, these may include rebates, tax credits and more. The incentives — which might be given by your county or municipality, or by the state of Alabama — could be offered for only a limited time, or on an ongoing basis.

Next Steps for Installing Solar in Clay

You can apply for solar incentives from the Alabama government and the federal government, as well as from your local utility company. The increased availability of solar initiatives over the last 15 years has helped greatly increase nationwide adoption of solar energy. Speaking with your local Clay solar panel installation expert is an excellent first step towards making sure you get all the incentives you qualify for when you switch to solar energy.