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
Solar installers are experts in maximizing your solar tax credits and rebates.
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Updated March 14, 2023
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What Solar Tax Credits, Incentives, and Rebates are Available in Dothan?
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
Source: https://www.dsireusa.org/
Solar incentives mitigate the cost of installing a solar panel system on your home. These financial incentives are designed to encourage more people to make the switch to renewable energy. Different kinds of incentives, including cash back, discounts or credit towards your monthly utility bill, may be available to you. Some incentives may be provided via the state of Alabama, by your utility company or by county or municipality, while other incentives are federal. You might qualify for any of the following types of solar incentives:
- Tax Exemptions: Sales tax exemptions are applied at the point of sale for your solar panels. Property tax exemptions allow you to exclude the added value of your solar system when calculating the amount of property tax you need to pay on your home.
- Rebates: Solar rebates might be offered by your local utility company, or by your state or county. These rebates work as cash back that is applied after you pay for a solar system and before tax credits are calculated.
- Tax Credits: Tax credits are dollar-for-dollar reductions (not deductions) in how much income tax you owe the government.
- Net Metering: Net metering is an incentive you can get once your solar panels are up and running. If you've signed a net metering agreement with your Dothan utility company, they will subtract the value of the excess energy your solar system produces from your utility bill each month. In some areas, this credit is dollar-for-dollar, while in other areas you might be refunded a percentage of the value.
Federal Solar Incentives
Federal solar incentives are likely to be the first thing that comes to mind when you think about solar incentives. The solar incentive that you're most likely to have heard of is the Federal Solar Investment Tax Credit (ITC), which gives you a credit on your taxes equal to a predetermined percentage of your solar system's cost.
The ITC applies to solar systems 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 when your solar system was installed. There is no cap on the claim amount.
Speaking with your local Dothan solar panel installer is the best way to understand how the ITC may apply to you.
The Inflation Reduction Act, passed in August 2022, added more provisions to the ITC (as well as renaming it to the Clean Energy Credit). The Clean Energy Credit runs until 2035. Solar installation projects started after January 1, 2022 and completed by the end of 2032 may qualify for a 30% tax credit. This amount will be decreased slightly on a yearly basis until the current program ends. The expansion also makes it easier to get credit for energy storage systems, beginning in 2023.
Click here to learn more about the new Inflation Reduction Act. Your local Dothan solar panel company can answer any questions you have and explain how the new Clean Energy Credit may apply to you.
State & Local Solar Incentives
There are often state solar incentives available in addition to federal ones. Rebates, tax credits and more might be available at a more local level. Certain incentives are ongoing, while others might only be available for a limited time. Solar incentives might be offered by the Alabama government, or by your county or municipality.
Next Steps for Installing Solar in Dothan
You can apply for solar incentives from the federal government and the Alabama government, as well as from your local utility company. The increased availability of solar initiatives in the past 15 years has helped increase solar adoption nationwide. Your local Dothan solar panel installer can give you more information about which incentives you can apply for, and get you on track to switch to renewable energy today.
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EcoWatch's Dothan, AL Solar Incentives FAQs
How do I know if I qualify for solar incentives?
Generally, solar incentives apply to:
- a new solar system
- installed on property that you own
- within the U.S.
- within the date range specified by a particular incentive.
Specific incentives, including those run by the Alabama government or by your county/municipality, may have additional qualifications. Get in touch with your local Dothan solar installer to learn more about what incentives your project will qualify for.
How much can I save on my electric bill annually if I install solar panels on my Dothan home?
Typically, Dothan homeowners who install solar panels save around $1,100.65 per year, or around $20,912.35 over 20 years after they make the switch.
What are some environmental benefits of adding solar panels to my house?
You can lower your carbon footprint by 450 pounds of CO2 annually when you switch to solar panels. This adds up to approximately 9,000 pounds over 20 years. Solar is also a renewable energy source, meaning that making the switch lessens the drain on our planet's resources.
Can I apply for incentives both towards the up-front cost of solar panels, and later as reimbursement?
The order in which incentives are applied may vary depending on which incentives you receive but typically yes, you can receive multiple types of incentives for your solar project. Speak to your solar installer or a local tax professional to ensure you are claiming all of the incentives you qualify for and applying them in the correct order.
Can I use a combination of multiple types 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 geothermal. You can also combine renewable energy generation with a backup source of non-renewable energy. Be sure to discuss the details of your plan with your local Dothan solar installation expert, to get an understanding of what will be needed and what incentives you may or may not qualify for.
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.