2023 Solar Incentives Guide for Dothan, AL - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Dothan.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2023 and beyond)
- Ways to optimize your solar investment
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What Solar Tax Credits, Incentives, and Rebates are Available in Dothan?
Wood-Burning Heating System Deduction
Local Option- Property Tax Exemption for Renewable Energy Faclities
Alabama Power - Residential Heat Pump Loan Program
Wiregrass Electric Cooperative - H2O Plus Program
Federal Residential Renewable Energy Tax Credit
Solar incentives are designed to make renewable energy usage more affordable through financial incentives for those who install solar panels on their homes. Solar incentives can include cash back, upfront discounts or monthly credits towards your utility bill. Some incentives are offered by the federal government, some by the state of Alabama and some by your utility company, county or municipality. Categories of solar incentives include:
- Tax Credits: Tax credits reduce, dollar-for-dollar, the total amount of tax you owe the federal government. Tax credits differ from tax deductions.
- Net Metering: Be sure to speak with your Dothan utility company about signing a net metering contract. This will allow you to receive credit towards your monthly utility bill for the value of excess energy generated by your solar panels. You may receive either a dollar-for-dollar credit or a percentage of the value.
- Tax Exemptions: Sales tax exemptions go into effect at the time of purchase for your solar system. Property tax exemptions let you ignore the value added by your solar system when calculating how much property tax you need to pay on your home.
- Rebates: Solar rebates might be offered by your county or state, or by your local utility company. These rebates work as partial refunds that are applied after you pay for a solar system and before tax credits are calculated.
Federal Solar Incentives
Federal solar incentives are likely the first thing that you think of when thinking about solar incentives. 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 given percentage of your solar system's cost.
The ITC can be credited towards the value of a solar system installed on your primary or secondary residence in the United States. The solar panels must have been installed after January 1, 2006 on a property you own for you to be eligible for the credit. Initially, the ITC applied to 30% of all system costs (panels, accessories, equipment and labor), although the covered amount has fluctuated slightly over the last few years between 26-30%. The amount you qualify for will depend on when your solar system was installed. There is no cap on the claim amount.
To better understand exactly how much money the ITC could save you, speak with your local Dothan solar panel installer.
The Inflation Reduction Act, passed in August 2022, added more provisions to the ITC (as well as renaming it to the Clean Energy Credit). For solar system installations that begin after January 1, 2022 and are completed by the end of 2032, homeowners may be eligible for a credit for 30% of the total cost. This percentage will decrease annually after 2032 until the Clean Energy Credit expires in 2035. Starting in 2023, the expansion to the program will also make claiming credit for energy storage systems easier than ever before.
Click here to learn more about the new Inflation Reduction Act. Your local Dothan solar panel installation expert is the best person to answer your questions regarding the new Clean Energy Credit and how it will apply to you.
State & Local Solar Incentives
Federal solar incentives are not your only option; rebates, tax credits and more are often offered at the local or state level. These solar incentives — which might be provided by your county or municipality, or by the state of Alabama — may be offered for only a limited time, or on an ongoing basis.
Next Steps for Installing Solar in Dothan
Solar incentives may come from your local utility company, the federal government or the Alabama government. The growing number of incentives available has facilitated the nationwide growth of solar energy use in the last 15 years. If you're ready to switch over to solar energy, calling your local Dothan solar panel installation expert is an excellent place to start.
EcoWatch's Dothan, AL Solar Incentives FAQs
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.