2023 Solar Incentives Guide for Fairfield, AL - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Fairfield.
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 October 25, 2023
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What Solar Tax Credits, Incentives, and Rebates are Available in Fairfield?
Local Option- Property Tax Exemption for Renewable Energy Faclities
Alabama Power - Residential Heat Pump Loan Program
Federal Residential Renewable Energy Tax Credit
Source: https://www.dsireusa.org/
The term "solar incentives" refers broadly to financial incentives implemented by the government and by solar companies to encourage the adoption and use renewable energy by making installing and using solar panels more affordable. Different kinds of incentives, such as cash back, discounts or monthly utility bill credits, might be available to you. Certain incentives may be provided via the state of Alabama, by your utility company or by county or municipality, while others are federal. Some solar incentives you might qualify for are:
- Tax Exemptions: These can come in the form of property tax exemptions, which would allow you to exclude the value added by your solar panels when paying taxes on your home. They may also include exemptions on sales tax at the time of purchase.
- Tax Credits: Tax credits are dollar-for-dollar reductions (not deductions) in the amount of tax that you owe the federal government.
- Rebates: A solar rebate is a partial refund credited to your account after you've paid for your solar system. These might be offered by your local utility company, your state or your county. The discount that rebates offer is normally applied to the price of solar panels before calculating tax credits.
- Net Metering: Net metering becomes relevant once your solar panels are up and running. If you've signed a net metering agreement with your Fairfield utility company, the company will subtract the value of the excess energy produced by your solar system from your utility bill each month. In some areas, this is a dollar-for-dollar credit, while in other places you might be refunded a percentage of the value.
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Federal Solar Incentives
Federal solar incentives are likely to be the first thing that you think of when you think about solar incentives. An incentive that most people are likely to be familiar with is the Federal Solar Investment Tax Credit (ITC). This incentive is a tax credit for a specific 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, equipment, accessories and labor – although it may range from 26-30%, depending on when your solar project was undertaken. There is no cap on the amount you can claim.
Your local Fairfield solar panel installation expert can offer more information about the ITC and how it applies to your situation.
The Inflation Reduction Act, passed in August 2022, expanded and extended the ITC (as well as retitling it the Clean Energy Credit). Homeowners can now qualify for a credit equal to 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 decrease on a yearly basis until the Clean Energy Credit ends in 2035. Starting in 2023, the expansion will also make credits for energy storage systems even easier to claim.
More information about the new Inflation Reduction Act can be found here. Your local Fairfield solar panel installers are the best people to answer your questions regarding the new Clean Energy Credit and how it will apply to you.
State & Local Solar Incentives
Some solar incentives are often also provided at the state and local level. Similar to federal incentives, these may include tax credits, rebates and more. Incentives might be handled by the state of Alabama, or by your county or municipality. Some incentives may be available for only a limited time, while others are ongoing.
Next Steps for Installing Solar in Fairfield
There are many kinds of solar incentives: those given by local utility companies, those provided by the Alabama government and those provided by the federal government, to name a few. Solar energy utilization has grown tremendously in the last 15 years, partially thanks to these incentives. If you're prepared to make the switch to solar energy, getting in touch with your local Fairfield solar panel installation expert is a great first step.
EcoWatch's Fairfield, AL Solar Incentives FAQs
When does the federal solar tax credit end?
The Clean Energy Credit (formerly named the federal solar tax credit, or 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.
If I trade in my appliances for ones that can utilize solar energy, are there any credits that I can claim?
Under the new Inflation Reduction Act, there are a variety of new financial incentives to encourage you to make eco-friendly improvements to your home. More details on these incentives, including information about incentives for purchasing new appliances, can be found here.
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 might vary depending on which incentives you are claiming but typically yes, you can receive multiple types of incentives for your solar project. Get in touch with 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 both solar and another type of renewable energy to power my home?
Yes, you can employ multiple types of renewable energy to power your home — for example, a combination of geothermal and solar. You can also combine renewable energy generation with a non-renewable backup source of energy. Make sure that you discuss the details of your plan with your local Fairfield solar panel installer, to make sure you know what you'll need and what kinds of incentives you will or won't 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.