2023 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 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 September 15, 2023
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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 make renewable energy usage more affordable through financial incentives for those who install solar panels on their homes. You might qualify for different types of incentives, including discounts, cash back or credit towards your monthly utility bill, depending on your situation. Some incentives come from your specific utility company, county or municipality, some from the state of Alabama and others from the federal government. Categories of solar incentives include:
- Net Metering: You can sign a net metering contract with your Fairhope utility company that will apply to all or a percentage of the excess electricity that is generated by your solar panels. They will then subtract this value from your monthly utility bill.
- Tax Exemptions: Sales tax exemptions are effective at the point of sale for your solar system. Property tax exemptions let you ignore the value added by your solar system when you calculate the amount of property tax you need to pay on your house.
- Rebates: Some solar companies will help you claim a rebate, or partial refund after purchase, for your solar panels. Counties or states will also offer limited-time rebates at various times. The value of a rebate will usually come off the total price before any tax credits are calculated.
- Tax Credits: Tax credits are dollar-for-dollar reductions (not deductions) in the amount of tax that you owe the government.
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Federal Solar Incentives
When thinking about solar incentives, federal incentives might be the first thing that comes to mind. The solar incentive that you may be most familiar with is the Federal Solar Investment Tax Credit (ITC), which gives you a credit on your taxes equal to a percentage of the cost of your solar system.
The ITC can be applied to solar systems installed after January 1, 2006 on a primary or secondary residence that you own in the United States. 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 the installation date of your solar system. There is no cap on the amount you can claim.
Your local Fairhope solar panel installer can offer more information about the ITC and how it may apply to your situation.
In August 2022, the Inflation Reduction Act expanded and extended the ITC, now dubbed the Clean Energy Credit. Homeowners can now receive a credit of 30% of the total solar system installation costs for projects started after January 1, 2022 and completed before the end of 2032. The credit percentage will then begin to decrease on a yearly basis until the Clean Energy Credit ends in 2035. Starting in 2023, the expansion will also make claiming credit for energy storage systems easier than ever before.
More information about the new Inflation Reduction Act can be found here. To fully understand how the new Clean Energy Credit applies to you, talk to your local Fairhope solar installation expert.
State & Local Solar Incentives
There are often state solar incentives available in addition to federal ones. Rebates, tax credits and more can be offered at a more local level. These solar incentives — which might be handled by your county or municipality, or by the state of Alabama — might be offered for only a limited time, or on an ongoing basis.
Next Steps for Installing Solar in Fairhope
Solar incentives may be provided by the federal government, the Alabama government or your local utility company. The variety of available incentives has helped nationwide use of solar energy increase greatly in the last 15 years. Reaching out to your local Fairhope solar panel installation company is the best first step towards getting the most money possible when you switch to solar energy.
EcoWatch's Fairhope, AL Solar Incentives FAQs
How can I learn 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 those given out by the Alabama government or by your county/municipality, might have additional qualifications. Talk to your local Fairhope solar installer to find out what incentives your project may qualify for.
What are the best solar panel installation companies near me?
To find a top-rated solar panel installer, check out our guide to Fairhope's best solar panel companies.
How long until the federal solar tax credit ends?
The Clean Energy Credit (formerly 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.
If I trade in my appliances for ones that use solar energy, are there any benefits I can claim?
Under the new Inflation Reduction Act, there are several new financial incentives for making 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 use solar and another type of renewable energy in combination to power my home?
You can use multiple types of renewable energy, or a combination of renewable and non-renewable energy, to power your home. Make sure you discuss your plan with your local Fairhope solar installation expert. They can help you as you plan for your project and also help you understand the various incentives that 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.