2023 Solar Incentives Guide for Hamilton, AL - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Hamilton.
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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Updated March 14, 2023
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What Solar Tax Credits, Incentives, and Rebates are Available in Hamilton?
Local Option- Property Tax Exemption for Renewable Energy Faclities
Alabama Power - Residential Heat Pump Loan Program
Federal Residential Renewable Energy Tax Credit
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Solar incentives are designed to make renewable energy usage more affordable through financial incentives for those who install solar panels on their homes. These incentives could include upfront discounts, cash back or monthly credits towards your utility bill. Some incentives are given by the federal government, some by the state of Alabama and some by your utility company, county or municipality. Categories of solar incentives include:
- Net Metering: Net metering becomes relevant after your solar panels are up and running. If you have a net metering agreement in place with your Hamilton utility company, they will subtract the value of the excess energy your solar system produces from your monthly utility bill. In some places, this credit is dollar-for-dollar, while in other areas you may be refunded a percentage of the value.
- Tax Exemptions: Sales tax exemptions are effective at the time of purchase for your solar system. Property tax exemptions allow you to exclude the value added by your solar system when you calculate how much property tax you need to pay on your home.
- Rebates: A solar rebate is a partial refund credited to your account after you've paid for your solar system. These 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 are dollar-for-dollar reductions in the amount of income tax that you owe the federal government. (This is different from a tax deduction.)
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. This is a tax credit equal to a certain percentage of the money you spend on solar panels for your home.
The ITC can be applied to solar systems installed after January 1, 2006 on a primary or secondary residence in the United States that you own. Initially, the credit applied to 30% of the total cost — for panels, accessories, labor and equipment — although it may range from 26-30%, depending on when your solar system was installed. There is no cap on the claim amount.
To best understand how the ITC might apply to you, speak to your local Hamilton solar panel installation expert and ask for more information.
In August 2022, the ITC (now called the Clean Energy Credit) was bolstered by the passage of the Inflation Reduction Act. Now, solar installation projects started after January 1, 2022 and completed by the end of 2032 can qualify for a 30% tax credit. This credit amount will then see a slight annual decrease until the end of the current Clean Energy Credit in 2035. Starting in 2023, the expansion will also make it easier to get credit for energy storage systems.
Click here to learn more about the new Inflation Reduction Act. The best way to learn more about how the new Clean Energy Credit will apply to you is to talk with your local Hamilton solar panel company.
State & Local Solar Incentives
Tax credits, rebates and more can be provided at multiple levels. Along with federal solar incentives, there are often state and local ones, too. Incentives may be provided by the state of Alabama, or by your county or municipality. Certain incentives are available for only a limited time, while others are ongoing.
Next Steps for Installing Solar in Hamilton
There are many kinds of solar incentives: those given by local utility companies, those given by the Alabama government and those given by the federal government, to name a few. Solar energy use has grown tremendously in the last 15 years, partially thanks to these incentives. Reaching out to your local Hamilton solar panel installation company is an excellent first step towards getting all the incentives you qualify for when you switch to solar energy.
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EcoWatch's Hamilton, AL Solar Incentives FAQs
If I already have a solar system installed on my house, can I still claim incentives?
If your solar panels were 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 Hamilton solar installer, can help you learn more about what incentives you can apply for.
How much will solar panels save me annually on my electric bill in Hamilton?
On average, Hamilton homeowners who install solar panels save approximately $1,124.25 per year, or approximately $21,360.70 over 20 years after they make the switch.
What are some of the environmental benefits of switching to solar?
You can reduce your carbon footprint by 450 pounds of CO2 annually by switching to solar panels. This adds up to roughly 9,000 pounds in 20 years. Solar is also a renewable energy source, meaning that making the switch lessens the drain on our planet's resources.
I want to change out my appliances for ones that are more energy-efficient. Are there any credits I can claim?
With the passage of the new Inflation Reduction Act, there are a number of new financial incentives that are available when you make eco-friendly improvements to your home. More details on these incentives, including information about incentives for purchasing new appliances, can be found here.
Can I claim incentives both towards the initial cost of solar panels, and later as reimbursement?
The order in which incentives are applied may vary depending on which incentives you are claiming but generally yes, you can receive multiple types of incentives for your solar project. Get in touch with your solar installer or a local tax professional to be sure you are claiming all the incentives you are eligible for and applying them in the correct order.
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.