2025 Solar Incentives Guide for Gardendale, AL - Tax Credits & Rebates

What Solar Tax Credits, Incentives, and Rebates are Available in Gardendale?

Source: https://www.dsireusa.org/

The term "solar incentives" includes a range of financial incentives designed to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. Incentives could include things like discounts, cash back or credit towards your monthly utility bill. Some incentives are provided by the federal government, while others are offered 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 Exemptions: These may come in the form of property tax exemptions, which can let you exclude the value added by your solar panels when calculating the taxes you pay on your home. You may also qualify for an exemption on sales tax at the time of purchase.
• Rebates: Solar companies may help you claim a rebate, or partial refund of your purchase, for your solar system. Counties or states will also offer limited-time rebates at various times. Any rebates you receive will usually come off the total price before any tax credits are calculated.
• Net Metering: Net metering is an incentive you can get once your solar panels are up and running. If you have a net metering agreement in place with your Gardendale utility company, they will subtract the value of the excess energy your solar system produces from your monthly utility bill. In some areas, this credit is dollar-for-dollar, while in others you might be refunded a percentage of the value.
• Tax Credits: Tax credits decrease, dollar-for-dollar, the amount of income tax you owe the government. These are different from tax deductions.

Federal Solar Incentives

Federal incentives are the type of incentives that you are most likely to have some familiarity with. It's likely that you've heard of the Federal Solar Investment Tax Credit, or ITC. The ITC is a tax credit that reduces your taxes by a certain percentage of the money you spend installing solar panels.

The ITC can be applied to the total cost of solar system installation, including the panels themselves as well as equipment, labor and accessories. You can claim this credit for panels installed after January 1, 2006, on a primary or secondary residence located in the United States that you own. From its original value of 30% of the total cost, the credit has fluctuated slightly between 26-30%, and you may qualify for varying percentages depending on when your project was completed. There is no maximum amount you can claim.

Reaching out to your local Gardendale solar panel installation expert is the best way to learn more about how the ITC may apply to you.

In August 2022, the Inflation Reduction Act laid out new provisions for the ITC, now titled the Clean Energy Credit. The new Clean Energy Credit now runs until 2035. American homeowners are now eligible for a 30% credit for solar systems that began installation on or after January 1, 2022, and will be done by December 31, 2032. The credit will then be decreased by a few percentage points every year until the date of expiration. Beginning in 2023, it will also be easier to claim credits for energy storage systems under this new program.

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, speak with your local Gardendale solar installers.

State & Local Solar Incentives

There are often state solar incentives available in addition to federal ones. Tax credits, rebates and more might be available at a more local level. The incentives — which might be handled by the state of Alabama, or by your county or municipality — might be offered on an ongoing basis, or for only a limited time.

Next Steps for Installing Solar in Gardendale

There are many kinds of solar incentives: those offered by local utility companies, those offered by the Alabama government and those given by the federal government, to name a few. The use of solar energy has grown tremendously in the last 15 years, partially due to these incentives. Contact your local solar panel installer today to learn more and to save as much money as possible on solar panels for your Gardendale home.