2023 Solar Incentives Guide for Gardendale, AL - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Gardendale.
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 Gardendale?
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
The term "solar incentives" covers 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 may include things like discounts, cash back or monthly utility bill credits. Some incentives are offered federally, while others are handled by the state of Alabama or your specific utility company, county or municipality. Categories of solar incentives include:
- Rebates: A solar rebate is a partial refund credited to your account after you've paid for your solar system. Rebates could 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 calculating tax credits.
- Tax Credits: Tax credits reduce, dollar-for-dollar, how much income tax you owe the federal government. These are different from tax deductions.
- Net Metering: You can sign a net metering agreement with your Gardendale utility company, that may apply to all or a percentage of the excess electricity that is generated by your solar panels. They will then deduct this value from your utility bill each month.
- Tax Exemptions: Tax exemptions can come in one of two forms. The first is sales tax exemption, which is applied when you purchase solar panels. The second is property tax exemption. This allows you to ignore the value added by your solar system when paying property tax on your house.
Federal Solar Incentives
When someone says "solar incentives," you likely think of federal incentives first. A federal incentive many people are probably familiar with is the Federal Solar Investment Tax Credit (ITC). This incentive is a tax credit for a predetermined percentage of your solar system's cost.
The ITC originally covered 30% of the total cost of solar panel installation, although it has fluctuated slightly over the years between 26-30%. The percentage you qualify for will depend on when your solar system was installed. The total cost of installation includes the panels themselves as well as the cost of labor, accessories and equipment. There is no maximum amount you can claim. The ITC can be applied to solar systems installed after January 1, 2006 on your primary or secondary residence. The residence must be in the United States and owned by you.
To more fully understand how the ITC could apply to your situation, speak to your local Gardendale solar panel installation expert and request more information.
The Inflation Reduction Act, passed in August 2022, added more provisions to the ITC (as well as renaming it to 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 see a slight decrease annually until the end of the program in 2035. Starting in 2023, the expansion will also make credits for energy storage systems even easier to claim.
More information about the new Inflation Reduction Act can be found here. The best way to understand how the new Clean Energy Credit applies to you is to talk with your local Gardendale solar panel installation expert.
State & Local Solar Incentives
Not all solar incentives are federal; tax credits, rebates and more might also be offered at the state and local level. Certain incentives are ongoing, while others are offered for only a limited time. Your local solar incentives might come from the Alabama government, or from your specific county or municipality.
Next Steps for Installing Solar in Gardendale
Solar energy use nationwide has gone up significantly in the last 15 years, in part due to the proliferation of solar incentives. You may get these incentives from the federal government, the Alabama government or your local utility company. Contact your local solar panel installation company today to discover more about the various programs and to save the most money possible on a solar system for your Gardendale home.
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EcoWatch's Gardendale, AL Solar Incentives FAQs
Can I claim incentives for adding solar panels to a rental property, vacation home or commercial property?
Many solar incentives apply to a property located within the United States that you own; most secondary residences fall under this distinction. There may be other solar incentives available for commercial properties, depending on the details. We recommend reaching out to your local solar installer and/or tax professional to best understand what incentives may apply to your specific situation.
How much can I save annually on my electric bill if I add solar panels to my Gardendale home?
Typically, homeowners in Gardendale who install solar panels save approximately $1,105.32 per year, or approximately $21,001.09 over 20 years after making the switch.
How long until the federal solar tax credit ends?
The Clean Energy Credit (previously called the federal solar tax credit, or the ITC), currently ends on January 1, 2035. Currently set at 30%, the credit will drop to 26% in 2033 and to 22% in 2034.
Can I claim incentives both towards the initial cost of solar panels, and later as reimbursement?
The order your incentives will be applied in might vary depending on which incentives you are claiming 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 ensure you are claiming all of the incentives you qualify for and applying them in the correct order.
Can I use a combination of solar and another type of renewable energy to power my home?
You can power your home with multiple types of renewable energy, or a combination of renewable and non-renewable energy. Be sure to go over your plan with your local Gardendale solar installer. They can help you with the plan for your project and give you an understanding of various incentives that you may or may not qualify for.
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.