2024 Solar Incentives Guide for Florence, AL - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Florence.
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 Florence?
Local Option- Property Tax Exemption for Renewable Energy Faclities
Federal Residential Renewable Energy Tax Credit
Source: https://www.dsireusa.org/
The phrase "solar incentives" refers broadly to financial incentives put in place by solar companies and the government to encourage people to use renewable energy by making solar panels more affordable. Incentives may include things like discounts, cash back or monthly utility bill credits. Some incentives are handled federally, while others are handled by the Alabama government or your specific utility company, county or municipality. You might qualify for any of the following types of solar incentives:
- Tax Credits: Tax credits lower, dollar-for-dollar, the amount of income tax you owe the government. These differ from tax deductions.
- Rebates: Solar rebates may be provided by your county or state, or by your local utility company. These rebates are essentially cash back that is applied after your purchase of a solar system and before tax credits are calculated.
- Net Metering: Net metering becomes relevant after your solar panels are up and running. If you have a net metering agreement with your Florence utility company, the company will subtract the value of the excess energy your solar system produces from your monthly utility bill. In some locations, this is a dollar-for-dollar credit, while in other places you might be refunded a percentage of the value.
- Tax Exemptions: Sales tax exemptions are effective at the point of sale for your solar panels. Property tax exemptions let you exclude the added value of your solar system when you're calculating how much property tax you need to pay on your home.
Best National Provider
SunPower
- Most efficient panels on the market
- National coverage
- Cradle to Cradle sustainability certification
- Great warranty coverage
- Expensive
- Customer service varies by local dealer
Best Technology
Tesla Energy
- Price-match guarantee
- Sleek, efficient, and durable solar panels
- Best solar battery on the market
- Some reported issues with customer service
- Customer service varies by local dealer
Federal Solar Incentives
When you hear the term "solar incentives," federal incentives might be the first thing that comes to mind. An incentive many people are probably familiar with is the Federal Solar Investment Tax Credit (ITC). The ITC is a tax credit for a specified percentage of your solar system's cost.
The ITC originally covered 30% of the cost of installing solar panels, although that number 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 amount you can claim. The ITC applies to solar systems installed after January 1, 2006, on your primary or secondary residence. The residence must be owned by you and in the United States.
Reaching out to your local Florence solar panel installer is the best way to understand how the ITC applies to your situation.
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. The Clean Energy Credit bolsters the current credit, increasing it up to 30% for solar installations undertaken between January 1, 2022, and December 31, 2032. At this point, the percentage will be reduced slightly each year until the end of the program in 2035. Starting in 2023, the expansion will also make it easier to get credit for energy storage systems.
More information about the new Inflation Reduction Act can be found here. The easiest way to understand how the new Clean Energy Credit applies to you is to reach out to your local Florence solar panel installation expert with your questions.
State & Local Solar Incentives
Some solar incentives may be offered at the local or state level. Like with federal incentives, these can include tax credits, rebates and more. The incentives — which may be provided by your county or municipality, or by the state of Alabama — could be offered for only a limited time, or on an ongoing basis.
Next Steps for Installing Solar in Florence
The nationwide use of solar energy has gone up tremendously in the past 15 years, in part thanks to the increase in availability of solar incentives. You might receive these incentives from your local utility company, the Alabama government or the federal government. When you're prepared to switch over to solar energy, reaching out to your local Florence solar panel installation expert is an excellent place to start.
EcoWatch's Florence, AL Solar Incentives FAQs
What are some environmental benefits of adding solar panels to my house?
You can reduce your carbon footprint by 0 pounds of CO2 a year when you switch to solar panels. This adds up to approximately 0 pounds in 20 years. Solar is also a renewable energy source, which means that switching your home over lessens the drain on our planet's resources.
When does the federal solar tax credit end?
The federal solar tax credit, formerly called the ITC and now titled the Clean Energy Credit, is scheduled to end January 1, 2035. The current 30% credit will end in 2032, replaced by a 26% credit in 2033 and a 22% credit in 2034.
If I switch my appliances out for ones that can use solar energy, are there credits that I can claim?
Under the new Inflation Reduction Act, there are a number of new financial incentives for making eco-friendly improvements to your home. More details about these incentives, including information about incentives for purchasing new appliances, can be found here.
Can I claim incentives both towards the initial cost of solar panels, and later as reimbursement?
Yes, you can receive both rebates and tax credits towards the cost of your solar panels. Depending on which incentives you are applying for, they may apply in a different order. Make sure that you speak with your solar installer or a local tax professional to verify that you are claiming incentives correctly and that you're getting the most money possible.
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.