2024 Solar Incentives Guide for Decatur, AL - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Decatur.
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 Decatur?
Local Option- Property Tax Exemption for Renewable Energy Faclities
Federal Residential Renewable Energy Tax Credit
Source: https://www.dsireusa.org/
Solar incentives help mitigate the cost of installing a solar panel system on your home. This category of financial incentives is designed to encourage more homeowners to switch their home over to renewable energy. Solar incentives may include upfront discounts, cash back or credit towards your monthly utility bill. Some incentives are given by the federal government, some by the Alabama government and some by your utility company, county or municipality. Some solar incentives you might qualify for are:
- Net Metering: Net metering factors in once your solar system is up and running. If you have in place a net metering agreement with your Decatur utility company, it will subtract the value of the excess energy produced by your solar system from your utility bill each month. In some areas, 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 decrease, dollar-for-dollar, the amount of income tax you owe the government. These are different from tax deductions.
- Tax Exemptions: Your solar system could qualify for both sales tax and property tax exemptions. Sales tax exemptions are applied at the time of purchase. Property tax exemptions let you ignore the added value of the solar panels when calculating property taxes on your house.
- Rebates: A rebate is a partial refund after the purchase of your solar panels. Rebates may be offered by your local utility company, your county or your state. The discount that rebates offer is normally applied to the price of solar panels before calculating tax credits.
Federal Solar Incentives
When thinking about solar incentives, you likely think of federal incentives first. You've likely heard of the Federal Solar Investment Tax Credit, or ITC. This is a tax credit that reduces your taxes by a certain percentage of the money you spend installing solar panels.
The ITC can be applied to solar panels installed after January 1, 2006, on a primary or secondary residence that you own in the United States. The credit initially covered 30% of the total cost – for panels, labor, accessories and equipment – although it may range from 26-30%, depending on when your solar system was installed. There is no cap on the amount you can claim.
Your local Decatur solar panel installer can offer more information about the ITC and how it applies to your situation.
The Inflation Reduction Act, passed in August 2022, added more provisions to the ITC (as well as retitling it the Clean Energy Credit). For solar systems installed between January 1, 2022, and December 31, 2032, homeowners can receive a credit for 30% of the total cost. After 2033, the percentage will decrease annually until the Clean Energy Credit expires in 2035. Beginning in 2023, it will also be easier to qualify for 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 will apply to you, get in touch with your local Decatur solar installation expert.
State & Local Solar Incentives
Some solar incentives are often also offered at the local or state level. Like with federal incentives, these could include rebates, tax credits and more. Incentives might be given by your county or municipality, or by the state of Alabama. Certain incentives may be available for only a limited time, while others are ongoing.
Next Steps for Installing Solar in Decatur
Solar energy use nationwide has significantly increased in the last 15 years, in part thanks to the proliferation of solar incentives. You can obtain these incentives from your local utility company, the Alabama government or the federal government. Speak with your local solar panel installation company today to learn more and to save the most money possible on a solar system for your Decatur home.
EcoWatch's Decatur, AL Solar Incentives FAQs
I want to trade in my old appliances for ones that are more energy-efficient. Are there any benefits I can claim?
The new Inflation Reduction Act introduces several incentives meant to reward homeowners who make eco-friendly upgrades. Some incentives include rebates and tax credits for installing new electric appliances. You can find more details about these incentives here.
Can I claim incentives both towards the initial cost of solar panels, and later as reimbursement?
Yes, you can receive both tax credits and rebates towards the cost of your solar panels. Depending on which incentives you are claiming, they may apply in a different order. Make sure that you talk to your solar installer or a local tax professional to verify that you are claiming the correct incentives and that you're getting the most money you can.
Can I use a combination of solar and another type 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 solar and wind power. You can also use both renewable energy sources and a non-renewable backup source of energy. Be sure to discuss the details of your plan with your local Decatur solar panel installer, to get an understanding of what will be needed and what incentives you will or won't qualify for.
Can I receive any incentives when I add solar panels to a vacation home, rental property or commercial property?
Many solar incentives are intended to apply to a property located within the United States that you own, and most secondary residences fall under this distinction. Other solar incentives may be available for commercial properties, depending on the details. We recommend talking to your local solar installer and/or tax professional to better understand what incentives apply to your specific situation.
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.