2023 Solar Incentives Guide for Helena, AL - Tax Credits & Rebates

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

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

The phrase "solar incentives" broadly refers to financial incentives implemented by the government and by solar companies to encourage the use of renewable energy by making solar panels more affordable. You may be eligible for various kinds of incentives, including cash back, discounts or monthly utility bill credits, depending on your situation. Some incentives come from your specific utility company, county or municipality, some from the Alabama government and others from the federal government. Some broad categories of solar incentives include:

• Rebates: Solar rebates may be offered by your state or county, or by your local utility company. These rebates work as partial refunds that are applied after your purchase of a solar system and before tax credits are calculated.
• Net Metering: Net metering factors in after your solar panels are up and running. If you've signed a net metering agreement with your Helena utility company, they will subtract the value of the excess energy your solar system produces from your utility bill each month. In some locations, this is a dollar-for-dollar credit, while in others you may make back a percentage of the value.
• Tax Credits: Tax credits lower, dollar-for-dollar, the amount of income tax you owe the government. These differ from tax deductions.
• Tax Exemptions: These might come in the form of property tax exemptions, which let you exclude the value of your solar system when calculating the taxes you pay on your house. They may also include exemptions on sales tax at the time of purchase.

Federal Solar Incentives

Federal incentives are the type of incentives that you are most likely to have some knowledge of. You might have heard of the Federal Solar Investment Tax Credit, or ITC. The ITC is a tax credit that reduces your taxes by a specified percentage of the money you spend on your solar system.

The ITC applies to solar panels installed after January 1, 2006 on a primary or secondary residence that you own in the United States. Initially, the credit applied to 30% of the total cost — for panels, labor, equipment and accessories — although the percentage may range from 26-30%, depending on the installation date of your solar system. There is no cap on the claim amount.

Your local Helena solar panel installer can offer more information about the ITC and how it may apply to your situation.

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 is valid until 2035. Your solar installation project undertaken between 2022 and 2032 may qualify for a 30% tax credit; this amount will decrease slightly each year until the current program ends. The expansion also makes credits for energy storage systems even easier to claim, starting in 2023.

More information about the new Inflation Reduction Act can be found here. To understand how the new Clean Energy Credit might apply to you, talk to your local Helena solar installers.

State & Local Solar Incentives

Some solar incentives are often also provided at the state and local level. Like with federal incentives, these could include tax credits, rebates and more. Incentives might be given by the state of Alabama, or by your county or municipality. Certain incentives may be available for only a limited time, while others are ongoing.

Next Steps for Installing Solar in Helena

There are many types of solar incentives: those given by the federal government, those given by the Alabama government and those given by local utility companies, to name a few. The use of solar energy has increased enormously in the last 15 years, thanks to these incentives. Reaching out to your local Helena solar panel installer is the right first step towards getting the most money possible when you switch to solar energy.