2023 Solar Incentives Guide for Forestdale, AL - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Forestdale.
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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By EcoWatch Local Advisors
Data Analysis: James Savino
Ranking Methodology: Karsten Neumeister
Updated March 14, 2023
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What Solar Tax Credits, Incentives, and Rebates are Available in Forestdale?
Wood-Burning Heating System Deduction
Local Option- Property Tax Exemption for Renewable Energy Faclities
Alabama Power - Residential Heat Pump Loan Program
Federal Residential Renewable Energy Tax Credit
Solar incentives are designed to encourage people to switch their home over to renewable energy by providing incentives that lower the financial burden of solar panel installation and use. Various kinds of incentives, including cash back, discounts or monthly utility bill credits, may be available to you. Certain incentives may be provided via the state of Alabama, by your utility company or by county or municipality, while others are federal. Types of solar incentives might include:
- Net Metering: Don't forget to talk with your Forestdale utility company about signing a net metering contract. This will allow you to get a credit towards your utility bill every month for the value of excess energy generated by your solar panels. You could receive either a dollar-for-dollar credit or a percentage of the value.
- Tax Exemptions: Your solar panel system could qualify for exemptions on both sales and property tax. Sales tax exemptions are effective at the time of purchase. Property tax exemptions let you exclude the value that solar panels add when you are calculating property taxes on your house.
- Rebates: A rebate is a partial refund after the purchase of your solar panels. Rebates might be offered by your local utility company, your state or your county. The discount that rebates offer is normally applied to the price of solar panels before tax credits are calculated.
- Tax Credits: Tax credits lower, dollar-for-dollar, how much income tax you owe the government. These are different from tax deductions.
Federal Solar Incentives
When someone says "solar incentives," you probably think of federal incentives first. You might have heard of the Federal Solar Investment Tax Credit, or ITC. This is a tax credit equal to a predetermined percentage of the money you spend installing solar panels.
The ITC can be applied to solar systems installed after January 1, 2006 and lets you deduct from your taxes a percentage of the total cost of solar panels, equipment, labor and accessories. You can receive this credit for solar panels 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.
Your local Forestdale solar panel installer can give you more information about the ITC and how it might apply to your situation.
The ITC was renewed and increased in scope after the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. The Clean Energy Credit re-raises the credit up to 30% for solar installation projects started after January 1, 2022 and completed by the end of 2032. After this, the percentage will be reduced slightly each year until the end of the program in 2035. Starting in 2023, the expansion to the program will also make credits for energy storage systems even easier to claim.
Click here to learn more about the new Inflation Reduction Act. The best way to understand how the new Clean Energy Credit applies to you is to talk with your local Forestdale solar panel installation expert.
State & Local Solar Incentives
Tax credits, rebates and more might be claimed at multiple levels. Along with federal solar incentives, there are often state and local ones, too. Incentives might be given by your county or municipality, or by the state of Alabama. Some incentives may be available for only a limited time, while others are ongoing.
Next Steps for Installing Solar in Forestdale
You can apply for solar incentives from the Alabama government and the federal government, as well as from your local utility company. Growing availability of solar initiatives in the past 15 years has helped increase nationwide solar energy use enormously. If you're prepared to make the change to solar energy, getting in touch with your local Forestdale solar panel installation expert is an excellent place to start.
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EcoWatch's Forestdale, AL Solar Incentives FAQs
How do I learn if I qualify for different solar incentives?
In most cases, solar incentives apply to:
- a new solar system
- installed on property 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, could have additional qualifications. Talk to your local Forestdale solar installer to learn more about what incentives your project will qualify for.
I already have solar panels. Does my system qualify for any incentives?
Your best bet is to talk to the company that installed your solar system — or speak to a local Forestdale solar installer — to clarify which incentives you might qualify for. If your solar panels were installed after January 1, 2022, you likely qualify for the newly increased 30% tax credit under the Inflation Reduction Act. Solar systems installed between 2006 and 2021 may qualify for a tax credit of 26-30%.
Who installs solar panel systems near me?
To find the best solar panel installer in your area, check out our guide to the best solar companies in Forestdale.
What are the environmental benefits of switching to solar energy?
You can reduce your carbon footprint by 450 pounds of CO2 annually when you switch to solar panels. This adds up to around 9,000 pounds in 20 years. Solar is also a renewable energy source, which means that switching your home over reduces the drain on our planet's resources.
Can I claim incentives both towards the initial cost of solar panels, and later as reimbursement?
The order that incentives will be applied in might vary depending on which incentives you are eligible for but in most cases yes, you can claim multiple types of incentives for your solar project. Check with your solar installer or a local tax professional to verify you are claiming all the incentives you are eligible 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.