2025 Solar Incentives Guide for Gadsden, AL - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Gadsden.
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 Gadsden?
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 term "solar incentives" covers a wide range of financial incentives put in place to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. You may qualify for various types of incentives, including cash back, discounts 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. Some solar incentives you might qualify for are:
- Tax Exemptions: Your solar panel system could qualify for exemptions on both sales and property tax. Sales tax exemptions are applied at the time of purchase. Property tax exemptions allow you to ignore the value added by your solar panels when you are calculating property taxes on your home.
- Rebates: Rebates, or cash back after a purchase, are usually given before any solar tax credits are calculated. Solar rebates can be provided by your local utility company, by your state or by your county.
- Tax Credits: Tax credits reduce, dollar-for-dollar, the total amount of tax you owe the federal government. Tax credits differ from tax deductions.
- Net Metering: Net metering factors in after your solar system is up and running. If you've signed a net metering agreement with your Gadsden utility company, the company will subtract the value of the excess energy your solar system produces from your monthly utility bill. In some areas, this is a dollar-for-dollar credit, while in other areas you may receive a refund equivalent to a percentage of the value.
Federal Solar Incentives
Federal incentives are the kind of incentives that you are most likely to have some knowledge of. It's likely that you've heard of the Federal Solar Investment Tax Credit, or ITC. The ITC is a tax credit equal to a predetermined percentage of the money you spend on your solar system.
The ITC applies to solar systems installed after January 1, 2006, on a primary or secondary residence that you own in the United States. The credit initially covered 30% of the total cost – for panels, equipment, labor and accessories – although it may range from 26-30%, depending on when your solar project was undertaken. There is no cap on the claim amount.
Speaking with your local Gadsden solar panel installer is the best way to learn more about how the ITC could apply to you.
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 has increased the current credit up to 30% for solar installations undertaken between January 1, 2022, and December 31, 2032. At this point, the percentage will see a slight decrease annually until the program expires in 2035. Starting in 2023, the program 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. To best understand how the new Clean Energy Credit might apply to you, get in touch with your local Gadsden solar installation company.
State & Local Solar Incentives
In addition to federal solar incentives, there are often also state ones. Tax credits, rebates and more can be offered at a more local level. These incentives might be distributed by your county or municipality, or by the Alabama government. Certain incentives are available for a limited time, while others are ongoing.
Next Steps for Installing Solar in Gadsden
Solar incentives can come from your local utility company, the federal government or the Alabama government. The variety of available incentives has facilitated the nationwide growth of solar energy use in the last 15 years. When you're ready to make the switch to solar energy, getting in touch with your local Gadsden solar panel installation expert is an excellent place to start.
EcoWatch's Gadsden, AL Solar Incentives FAQs
I already have solar panels. Do I qualify for any incentives?
If your solar system was installed after January 1, 2022, you may qualify for the recently increased 30% tax credit under the Inflation Reduction Act. If you installed your system between 2006 and 2021, you might qualify for a tax credit between 26% and 30%, depending on the year it was installed. Talking to the company that installed your system, or any local Gadsden solar installer, can help you understand what incentives you might want to apply for.
How much can I save annually on my electric bill if I add solar panels to my house in Gadsden?
Generally, Gadsden homeowners who install solar panels save approximately $1,098.74 per year, or around $20,876.06 over 20 years after they make the switch.
Can I use both solar and another type of renewable energy to power my home?
Yes, you can employ multiple types of renewable energy to power your home — for example, a combination of solar and wind power. You can also combine renewable energy generation with a backup source of non-renewable energy. Be sure to discuss the details of your plan with your local Gadsden solar panel installer, so that you understand what you'll need and what types of incentives you might or might not qualify for.
Can I receive any incentives when I add solar panels to a vacation home, rental property or commercial property?
Many solar incentives apply to a property you own that is located within the United States, and most secondary residences will fall into this category. Other solar incentives may be available for commercial properties, depending on the specifics. We recommend speaking with your local solar installer and/or tax professional to best understand what incentives may apply to your specific situation.
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