2024 Solar Incentives Guide for Fairhope, AL - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Fairhope.
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 Fairhope?
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/
Solar incentives are intended to encourage people to make the switch to renewable energy by offering incentives meant to lower the financial burden of solar panel installation and use. These incentives might include upfront discounts, cash back or monthly credits towards your utility bill. Some incentives are provided by the federal government, some by the Alabama government and some by your specific utility company, county or municipality. Categories of solar incentives include:
- Tax Exemptions: Tax exemptions may come in one of two forms. The first is sales tax exemption, applied when you purchase 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 home.
- Rebates: Rebates, or cash back after a purchase, are normally applied before any solar tax credits are calculated. Rebates can be offered by your local utility company, by your county or by your state.
- Tax Credits: These credits are dollar-for-dollar reductions (not deductions) in the amount of tax that you owe the federal government.
- Net Metering: Net metering is an incentive you can get after your solar system is up and running. If you have a net metering agreement in place with your Fairhope utility company, the company will subtract the value of the excess energy your solar system produces from your monthly utility bill. In some areas, this is a dollar-for-dollar credit, while in others you might make back a percentage of the value.
Federal Solar Incentives
Federal solar incentives are likely to be the first thing that you think of 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 provides a credit on your taxes equal to a specified percentage of your solar system's cost.
The ITC can be applied to the total cost of installing a solar system, including the panels themselves as well as labor, equipment and accessories. This credit can be claimed for panels installed after January 1, 2006, on a primary or secondary residence that you own, as long as it is located in the United States. From its original value of 30% of the total cost, the credit has fluctuated slightly between 26-30%, and you may qualify for varying percentages depending on when your project was completed. There is no maximum amount you can claim.
Wondering how the ITC applies to your specific situation? Contact your local Fairhope solar panel installation expert to get more information.
In August 2022, the Inflation Reduction Act laid out new provisions for the ITC, now called the Clean Energy Credit. The new Clean Energy Credit extends until 2035. Homeowners can now apply for a 30% credit for solar systems installed between 2022 and 2032. The total credit will then see a slight annual decrease until it expires. Starting in 2023, the expansion to the program will also make credits for energy storage systems even easier to claim.
More information about the new Inflation Reduction Act can be found here. The best way to fully understand how the new Clean Energy Credit will apply to you is to speak with your local Fairhope solar panel installers directly.
State & Local Solar Incentives
Not all solar incentives are federal; tax credits, rebates and more may be offered at the local or state level. These incentives might be given out by your county or municipality, or by the Alabama government. Some are available for a limited time, while others are ongoing.
Next Steps for Installing Solar in Fairhope
Solar incentives might be provided by the Alabama government, the federal government or your local utility company. The growing number of available incentives has helped nationwide use of solar energy increase greatly in the last 15 years. Reach out to your local solar panel installation company today to discover more about the various programs and to save as much money as possible on solar panels for your Fairhope home.
EcoWatch's Fairhope, AL Solar Incentives FAQs
How do I know if I qualify for different solar incentives?
Generally, solar incentives apply to:
- a new solar panel system
- installed on a property that you own
- within the U.S.
- between the dates specified by a particular incentive.
Specific incentives, including ones handled by the Alabama government or by your county/municipality, may have additional qualifications. Talk to your local Fairhope solar installer to discover what incentives your project will qualify for.
Who installs solar panel systems near me?
To discover the top solar panel installation companies near you, read our article on the best solar companies in Fairhope.
How long until the federal solar tax credit ends?
The Clean Energy Credit (previously called the federal solar tax credit, or the ITC), is scheduled 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 trade in my old appliances for ones that are more energy-efficient. Are there any benefits I can claim?
With the passage of the new Inflation Reduction Act, there are a number of new financial incentives to encourage you to make eco-friendly improvements to your home. More details regarding these incentives, including information about incentives for purchasing new appliances, can be found here.
Can I qualify for incentives both towards the initial cost of solar panels, and later as reimbursement?
The order in which incentives are applied may vary depending on which incentives you are eligible for but generally yes, you can receive multiple types of incentives for your solar project. Talk with your solar installer or a local tax professional to verify you are claiming all the incentives you qualify for and applying them in the correct order.
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.