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
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 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/
The phrase "solar incentives" refers broadly to financial incentives designed to encourage the use of renewable energy by making solar panels more affordable. Various kinds of incentives, including discounts, cash back or monthly utility bill credits, 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 others are federal. Some solar incentives you might qualify for are:
- Tax Exemptions: These could come in the form of property tax exemptions, which would allow you to exclude the value of your solar system when paying property tax on your home. You may also qualify for an exemption on sales tax at the time of purchase.
- Rebates: Your solar installer might help you claim a rebate, or partial refund of your purchase, for your solar system. States or counties will also offer limited-time rebates at various times. Any rebates you receive will usually be deducted from the total price before tax credits are calculated.
- Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the government. (A tax credit is different from a tax deduction.)
- Net Metering: Don't forget to speak with your Fairhope utility company about signing a net metering contract. This will allow you to receive credit towards your utility bill every month for the value of excess energy your solar panels generate. You could receive either a dollar-for-dollar credit or a percentage of the value.
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Federal Solar Incentives
Federal incentives are the type of incentives that you are most likely to have heard of. You might have heard of the Federal Solar Investment Tax Credit, or ITC. This incentive is a tax credit equal to a certain percentage of the money you spend on solar panels for your home.
The ITC covers solar systems installed after January 1, 2006, and under this program you can deduct from your taxes a percentage of the total cost of solar panels, equipment, labor and accessories. This credit can apply towards a solar panel system installed on a primary or secondary residence that you own in the United States. Originally, you could claim 30% of the total cost, although the amount you can claim may range between 26-30%. There is no maximum amount you can claim.
To best understand how the ITC may apply to your situation, call your local Fairhope solar panel installation expert and ask for more information.
The ITC was both renewed and expanded by the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. Homeowners are now eligible for a credit equal to 30% of the total costs of solar system installation for projects started after January 1, 2022, and completed before the end of 2032. The credit percentage will then begin to decrease annually until the Clean Energy Credit ends in 2035. Starting in 2023, it will also be easier to qualify for credits for energy storage systems under the new laws.
Click here to learn more about the new Inflation Reduction Act. The easiest way to understand how the new Clean Energy Credit might apply to you is to get in touch with your local Fairhope solar panel installers.
State & Local Solar Incentives
There are often also state solar incentives in addition to those provided by the federal government. Rebates, tax credits and more might be available at a more local level. Incentives might be handled by your county or municipality, or by the state of Alabama. Certain incentives may be available for only a limited time, while others are ongoing.
Next Steps for Installing Solar in Fairhope
Nationwide solar energy use has gone up tremendously in the last 15 years, in part thanks to the proliferation of solar incentives. You can obtain these incentives from the federal government, the Alabama government or your local utility company. Your local Fairhope solar panel installation expert can give you more information about which incentives you should apply for, and get you started on the path to switching to renewable energy today.
EcoWatch's Fairhope, AL Solar Incentives FAQs
How can I learn if I qualify for solar incentives?
In most cases, 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, sometimes 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.
When does the federal solar tax credit end?
The Clean Energy Credit (previously referred to as 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 switch my appliances out for ones that use solar energy, are there benefits that I can claim?
The new Inflation Reduction Act introduces several incentives that reward homeowners who make eco-friendly upgrades. Some incentives include rebates and tax credits for installing new electric appliances. You can find more details about these incentives here.
Can I qualify for incentives both towards the up-front cost of solar panels, and later as reimbursement?
The order your incentives will be applied in could vary depending on which incentives you are claiming but usually yes, you can claim multiple types of incentives for your solar project. Get in touch with your solar installer or a local tax professional to be sure 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.