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/
Solar incentives are intended to encourage people to make the switch to renewable energy by providing financial incentives meant to lower the burden of solar panel installation and use. The incentives may include upfront discounts, cash back or credit towards your monthly 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. Some solar incentives you might qualify for are:
- Tax Credits: Tax credits decrease, dollar-for-dollar, the total amount of tax you owe the government. Tax credits differ from tax deductions.
- Rebates: Solar rebates might be provided by your local utility company, or by your county or state. These rebates are essentially cash back that is applied after your purchase of solar panels and before tax credits are calculated.
- Net Metering: Be sure to speak with your Florence utility company about signing a net metering agreement. This allows you to receive credit towards your monthly utility bill for the value of excess energy generated by your solar panels. You might receive either a dollar-for-dollar credit or a percentage of the value.
- Tax Exemptions: These might come in the form of property tax exemptions, which would allow you to exclude the value of your solar system when calculating the taxes you pay on your house. You may also qualify for an exemption on sales tax at the time of purchase.
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Federal Solar Incentives
When you hear the term "solar incentives," federal incentives might be the first thing that comes to mind. You may have heard of the Federal Solar Investment Tax Credit, or ITC. The ITC is a tax credit that reduces your taxes by a specified percentage of the money you spend on solar panels for your home.
The ITC can be applied to solar panels installed on your primary or secondary residence in the United States. The solar panels have to have been installed on a property you own after January 1, 2006, for you to claim the credit. Originally, the ITC covered 30% of all installation costs (panels, equipment, labor and accessories), although the amount has fluctuated over the last few years between 26-30%. The amount you qualify for will depend on when your solar system was installed. There is no cap on the amount you can claim.
To more fully understand how the ITC may apply to your situation, get in touch with your local Florence solar panel installation expert and ask for more information.
In August 2022, the ITC (now referred to as the Clean Energy Credit) was bolstered by the passing of the Inflation Reduction Act. Homeowners can now qualify for a credit equal to 30% of the total solar system installation costs for projects that began after January 1, 2022, and will be finished by the end of 2032. This percentage will then decrease annually until the Clean Energy Credit ends in 2035. Beginning in 2023, it will also be easier to obtain credits for energy storage systems with the new act.
Click here to learn more about the new Inflation Reduction Act. The easiest way to fully understand how the new Clean Energy Credit applies to you is to get in touch with your local Florence solar panel installers.
State & Local Solar Incentives
Some solar incentives are often also provided at the state and local level. Similar to federal incentives, these can include tax credits, rebates and more. Certain incentives are ongoing, while others are only available for a limited time. Solar incentives might be given by the Alabama government, or by your county or municipality.
Next Steps for Installing Solar in Florence
There are a variety of solar incentives: those given by local utility companies, those provided by the Alabama government and those offered by the federal government, to name a few. The use of solar energy has grown enormously in the last 15 years, partially due to these incentives. When you're prepared to make the change to solar energy, reaching out to your local Florence solar panel installation expert is a great first step.
EcoWatch's Florence, AL Solar Incentives FAQs
How much will a solar system save me on my electric bill in Florence annually?
Once you add solar panels to your house in Florence, you can expect to save around $525.56 per year, or around $10,511.28 over the next 20 years.
What are some environmental benefits of adding solar panels to my home?
You can reduce your carbon footprint by 0 pounds of CO2 annually by switching to solar panels. This adds up to around 0 pounds over 20 years. In addition, solar power is a renewable energy source, which means that making the switch reduces the drain on our planet's resources.
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.
I want to trade in my old appliances for ones that are more energy-efficient. Are there any incentives 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.