2023 Solar Incentives Guide for Grand Bay, AL - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Grand Bay.
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 Grand Bay?
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" refers to a 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. Different kinds of incentives, like discounts, cash back or monthly utility bill credits, might be available to you. Some incentives may be offered by the state of Alabama, by your utility company or by county or municipality, while other incentives are federal. Some solar incentives you might qualify for are:
- Rebates: A rebate is a partial refund after the purchase of your solar panels. These might be offered by your local utility company, your state or your county. The rebates are usually applied before tax credits are calculated.
- Tax Exemptions: Sales tax exemptions are applied at the point of sale for your solar panels. Property tax exemptions allow you to exclude the value added by your solar system when you're calculating how much property tax you need to pay on your house.
- Tax Credits: Tax credits decrease, dollar-for-dollar, how much income tax you owe the government. These are different from tax deductions.
- Net Metering: You may be able to sign a net metering agreement with your Grand Bay utility company. This agreement may apply to all or a percentage of the excess electricity that is generated by your solar panels. Your utility company will then subtract this value from your utility bill each month.
Federal Solar Incentives
Federal incentives are the type of incentives that you are most likely to have some familiarity with. The solar incentive that you're most familiar with is probably the Federal Solar Investment Tax Credit (ITC), which gives you a credit on your taxes equal to a certain percentage of your solar system's cost.
The ITC can be applied to solar panels installed on your primary or secondary residence in the United States. The solar system must 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 costs (panels, equipment, labor and accessories), although the covered amount has fluctuated slightly over time between 26-30%. The installation date of your solar system will determine what percentage you are eligible for. There is no cap on the claim amount.
To understand exactly how much money the ITC could save you, contact your local Grand Bay solar panel installer.
In August 2022, the Inflation Reduction Act laid out new provisions for the ITC, now called the Clean Energy Credit. Now, solar installation projects begun after January 1, 2022 and finished by December 31, 2032 may be eligible for a 30% tax credit. This percentage will then decrease slightly each year until the end of the current Clean Energy Credit in 2035. Starting in 2023, the expansion to the program will also make it easier to get credit for energy storage systems.
Click here to learn more about the new Inflation Reduction Act. To better understand how the new Clean Energy Credit will apply to you, speak with your local Grand Bay solar installation expert.
State & Local Solar Incentives
Some solar incentives may be offered at the local or state level. Like with federal incentives, these could include rebates, tax credits and more. Some incentives are offered for only a limited time, while others are ongoing. Local solar incentives may come from the Alabama government, or from your specific county or municipality.
Next Steps for Installing Solar in Grand Bay
The variety of available solar incentives has helped tremendously increase the nationwide adoption of solar energy over the last 15 years. You can get solar incentives from your local utility company, the Alabama government or the federal government. If you're ready to make the switch to solar energy, talking to your local Grand Bay solar panel installation expert is a great first step.
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EcoWatch's Grand Bay, AL Solar Incentives FAQs
If I already have a solar system installed on my house, can I still claim incentives?
An excellent idea would be to talk to someone from the company that installed your solar system — or reach out to a local Grand Bay solar installer — to clarify which incentives you may qualify for. If your system was installed after January 1, 2022, you likely qualify for the newly increased 30% tax credit under the Inflation Reduction Act. Solar panels installed between 2006 and 2021 may qualify for a tax credit of 26-30%.
Who installs solar panels near me?
To find the best solar panel installation companies near you, read our article on the best solar companies in Grand Bay.
How long until the federal solar tax credit ends?
The federal solar tax credit, previously called the ITC and now titled the Clean Energy Credit, is set to end on January 1, 2035. The current 30% credit will end in 2032, replaced by a 26% credit in 2033 and a 22% credit in 2034.
Can I receive incentives both towards the initial cost of solar panels, and later as reimbursement?
Yes, you can claim both tax credits and rebates towards the cost of your solar panels. Depending on precisely which incentives you are claiming, they may apply in a different order. Be sure to speak with your solar installer or a local tax professional to confirm that you are claiming the correct incentives and that you're getting the most money you can.
Can I use a combination of multiple types of renewable energy to power my home?
Yes, you can utilize multiple types of renewable energy to power your home — for example, a combination of solar and geothermal. You can also use both renewable energy sources and a backup source of non-renewable energy. You should discuss your plan with your local Grand Bay solar installation expert, so that you understand what you'll need and what incentives you will or won't 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.