2023 Solar Incentives Guide for Gulf Shores, AL - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Gulf Shores.
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 May 04, 2023
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What Solar Tax Credits, Incentives, and Rebates are Available in Gulf Shores?
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 make renewable energy usage more affordable through financial incentives to help people install solar panels on their homes. 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 by your specific utility company, county or municipality. Some broad categories of solar incentives include:
- Tax Credits: Tax credits lower, dollar-for-dollar, how much income tax you owe the federal government. Tax credits are different from tax deductions.
- Net Metering: Don't forget to talk with your Gulf Shores utility company about signing a net metering agreement. This allows you to receive credit towards your utility bill every month for the value of excess energy generated by your solar panels. You may receive either a dollar-for-dollar credit or a percentage of the value.
- Tax Exemptions: These might come in the form of property tax exemptions, which allow you to exclude the value added by your solar panels when paying property tax on your house. You could also look for exemptions on sales tax at the time of purchase.
- Rebates: Some solar companies will 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. If you receive a rebate, that amount will usually be deducted from your total price before any tax credits are calculated.
Federal Solar Incentives
Federal incentives are the kind of incentives that you are most likely to have some knowledge of. The Federal Solar Investment Tax Credit, or ITC, is the most well-known federal solar incentive. The ITC provides you with a tax credit for a specific percentage of your solar system's cost.
The ITC can be applied to solar panels installed after January 1, 2006 on a primary or secondary residence in the United States that you own. The credit initially covered 30% of the total cost — for panels, accessories, equipment and labor — although the percentage may range from 26-30%, depending on when your solar project was undertaken. There is no cap on the amount you can claim.
Contacting your local Gulf Shores solar panel installer is the best way to understand how the ITC could apply to you.
In August 2022, the ITC (now called the Clean Energy Credit) was expanded and extended by the passage of the Inflation Reduction Act. The new Clean Energy Credit now runs until 2035. Homeowners can now receive a 30% credit for solar systems installed between 2022 and 2032. This new credit will then be decreased by a few percentage points every year until it expires. Beginning in 2023, it will also be easier to claim credits for energy storage systems under the new laws.
More information about the new Inflation Reduction Act can be found here. The best way to fully understand how the new Clean Energy Credit applies to you is to speak with your local Gulf Shores solar panel company directly.
State & Local Solar Incentives
Some solar incentives are often also provided at the state and local level. As with federal incentives, these may include tax credits, rebates and more. These solar incentives — which might be handled by the state of Alabama, or by your county or municipality — might be offered for only a limited time, or on an ongoing basis.
Next Steps for Installing Solar in Gulf Shores
You can apply for solar incentives from the federal government and the Alabama government, as well as from your local utility company. The growing availability of solar initiatives in the past 15 years has helped greatly increase nationwide adoption of solar energy. Call your local solar panel installer today to discover more about the various programs and to save the most money possible on solar panels for your Gulf Shores home.
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EcoWatch's Gulf Shores, AL Solar Incentives FAQs
My home already has solar panels installed. Are there any incentives that I qualify for?
If your solar panels were installed after January 1, 2022, you may qualify for the newly increased 30% tax credit under the Inflation Reduction Act. If you had your system installed between 2006 and 2021, you might qualify for a tax credit between 26% and 30%, depending on the date of installation. Speaking with the company that installed your solar system, or any local Gulf Shores solar installer, can help you learn more about what incentives you might want to apply for.
How much will a solar system save me annually on my electric bill in Gulf Shores?
On average, Gulf Shores homeowners who install solar panels save about $1,109.96 per year, or about $21,089.32 over 20 years after they make the switch.
What are the best solar panel installation companies near me?
To learn about the top solar panel installers near you, read our article on Gulf Shores' top solar panel companies.
What are the environmental benefits of switching to solar energy?
You can reduce your carbon footprint by 450 pounds of CO2 a year when you switch to solar panels. This adds up to roughly 9,000 pounds over 20 years. In addition, solar power is a renewable energy source, meaning that making the switch lessens the drain on our planet's resources.
When does the federal solar tax credit end?
The Clean Energy Credit (formerly called the federal solar tax credit, or ITC), is slated to end on January 1, 2035. Currently set at 30%, the credit will drop to 26% in 2033 and to 22% in 2034.
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.