2024 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 2024 and beyond)
- Ways to optimize your solar investment
Solar installers are experts in maximizing your solar tax credits and rebates.
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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. Financial incentives like these are in place to encourage more people to convert their home partially or fully to renewable energy. These incentives could include cash back, upfront discounts or monthly credits towards your utility bill. Some incentives are offered by the federal government, some by the Alabama government and some by your utility company, county or municipality. You might qualify for any of the following types of solar incentives:
- Tax Exemptions: Tax exemptions can come in two forms. First, there is sales tax exemption, applied at the time you purchase your solar panels. The second is property tax exemption. This allows you to ignore the value added by your solar system when calculating property tax for your house.
- Rebates: Solar rebates might be offered by your local utility company, or by your state or county. These rebates are essentially cash back that is applied after you pay for a solar system and before tax credits are calculated.
- Net Metering: Make sure you speak with your Dothan utility company about signing a net metering agreement. This will allow you to receive credit towards your utility bill every month for the value of excess energy your solar panels generate. You might receive either a dollar-for-dollar credit or a percentage of the value.
- Tax Credits: Tax credits decrease, dollar-for-dollar, the amount of income tax you owe the government. Tax credits are different from tax deductions.
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Federal Solar Incentives
Federal incentives are the type of incentives that you are most likely to have heard of. An incentive that most people are probably familiar with is the Federal Solar Investment Tax Credit (ITC). This incentive is a tax credit for a specific percentage of the cost of your solar system.
The ITC originally covered 30% of the total cost of installing a solar system, and has fluctuated slightly over the last few years between 26-30%. The percentage you qualify for will depend on when your solar system was installed. The total installation cost includes the panels themselves as well as the cost of accessories, equipment and labor. There is no maximum claim amount. The ITC applies to solar systems installed after January 1, 2006, on your primary or secondary residence. The residence must be in the United States and owned by you.
Your local Dothan solar panel installer can give you more information about the ITC and how it applies to your situation.
The Inflation Reduction Act, passed in August 2022, made some changes to the ITC (as well as retitling it the Clean Energy Credit). The new Clean Energy Credit is valid until 2035. You are now eligible for a 30% credit for solar systems that began installation after January 1, 2022, and are completed by the end of 2032. This credit will then decrease annually until the date of expiration. The program expansion also makes claiming credit for energy storage systems easier than ever before, starting in 2023.
More information about the new Inflation Reduction Act can be found here. Your local Dothan solar panel installation experts can answer any questions you have and explain how the new Clean Energy Credit will apply to you.
State & Local Solar Incentives
Tax credits, rebates and more might be provided at multiple levels. In addition to federal solar incentives, there are often state and local ones, too. Some incentives are ongoing, while others are offered for only a limited time. Local solar incentives could come from the Alabama government, or from your specific county or municipality.
Next Steps for Installing Solar in Dothan
Solar incentives may come from the Alabama government, the federal government or your local utility company. The variety of available incentives has facilitated the nationwide growth of solar energy use in the last 15 years. Speaking with your local Dothan solar panel installer is the best first step towards making sure you get all the incentives you qualify for when you switch to solar energy.
EcoWatch's Dothan, AL Solar Incentives FAQs
How can I find out if I qualify for specific solar incentives?
Broadly, solar incentives apply to:
- a new solar panel system
- installed on property that you own
- within the U.S.
- within the date range specified by a particular incentive.
Specific incentives, including ones handled by the Alabama government or by your county/municipality, could have additional qualifications. Speak with your local Dothan solar installer to discover what incentives your project may qualify for.
My home already has solar panels installed. Does my system qualify for any incentives?
If your solar system was installed after January 1, 2022, you may qualify for the newly increased 30% tax credit under the Inflation Reduction Act. If your system was installed between 2006 and 2021, you may qualify for a tax credit between 26% and 30%, depending on the date of installation. Speaking with a representative from the company that installed your solar system, or any local Dothan solar installer, can help you understand what incentives you qualify for.
When does the federal solar tax credit end?
The Clean Energy Credit (formerly called the federal solar tax credit, or the ITC), is slated to end on January 1, 2035. Currently set at 30%, the credit will drop to 26% in 2033 and to 22% in 2034.
I want to switch my appliances out for ones that are more energy-efficient. Are there any credits I can claim?
The recently passed Inflation Reduction Act includes provisions for several incentives designed to reward homeowners for making eco-friendly upgrades. Some of these incentives include rebates and tax credits for installing new electric appliances. You can find more details about these incentives here.
What if I am planning to add a solar system to a vacation home, rental property or commercial property? Will I still qualify for incentives?
Many solar incentives apply to a property located within the United States that you own; most secondary residences fall into this category. There may be other solar incentives available for commercial properties, depending on the specifics. We recommend speaking with your local solar installer and/or tax professional to fully understand what incentives will 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.