2023 Solar Incentives Guide for Homewood, AL - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Homewood.
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 May 04, 2023
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What Solar Tax Credits, Incentives, and Rebates are Available in Homewood?
Local Option- Property Tax Exemption for Renewable Energy Faclities
Alabama Power - Residential Heat Pump Loan Program
Federal Residential Renewable Energy Tax Credit
Source: https://www.dsireusa.org/
The term "solar incentives" refers to financial incentives put in place by solar companies and the government to encourage increased use of renewable energy by making the installation and use of solar panels more affordable. Different kinds of incentives, such as cash back, discounts or monthly utility bill credits, might be available to you. Certain incentives may be offered by the state of Alabama, by your utility company or by county or municipality, while other incentives are federal. Some broad categories of solar incentives include:
- Tax Credits: Tax credits decrease, dollar-for-dollar, the total amount of tax you owe the federal government. Tax credits are different from tax deductions.
- Rebates: A rebate is a partial refund given after you've purchased your solar panels. These could be offered by your local utility company, your state or your county. The rebates are usually applied before tax credits are calculated.
- Tax Exemptions: These might come in the form of property tax exemptions, which would allow you to exclude the value of your solar system when calculating the taxes you pay on your house. You may also qualify for an exemption on sales tax at the time of purchase.
- Net Metering: You can sign a net metering contract with your Homewood utility company, that may apply to all or a percentage of the excess electricity your solar panels generate. Your utility company will then subtract this value from your monthly utility bill.
Federal Solar Incentives
Federal solar incentives are likely the first thing that you think of when you think about solar incentives. The solar incentive that you're most likely to have heard of is the Federal Solar Investment Tax Credit (ITC), which gives you a credit on your taxes equal to a percentage of your solar system's cost.
The ITC can be applied to the total cost of installing a solar system, including the panels themselves as well as equipment, labor and accessories. You can claim this credit for panels installed after January 1, 2006 on a primary or secondary residence located in the United States that you own. From its original value of 30% of the total cost, the credit has fluctuated slightly between 26-30%, and you may qualify for varying percentages depending on when your project was completed. There is no maximum amount you can claim.
To more fully understand how the ITC could apply to your situation, speak to your local Homewood solar panel installation expert and ask for more information.
In August 2022, the Inflation Reduction Act laid out new provisions for the ITC, now called the Clean Energy Credit. Homeowners can now qualify for a credit of 30% of the total solar system installation costs for projects started after January 1, 2022 and completed before the end of 2032. The percentage will then decrease on a yearly basis until the Clean Energy Credit ends in 2035. Starting in 2023, it will also be easier to obtain credits for energy storage systems under the new laws.
More information about the new Inflation Reduction Act can be found here. To best understand how the new Clean Energy Credit will apply to you, reach out to your local Homewood solar installation company.
State & Local Solar Incentives
Tax credits, rebates and more might be claimed at multiple levels. On top of federal solar incentives, there are often state and local ones, too. These incentives — which might be handled by your county or municipality, or by the state of Alabama — may be offered on an ongoing basis, or for only a limited time.
Next Steps for Installing Solar in Homewood
The large number of solar incentives available has contributed greatly to the increase in the nationwide adoption of solar energy over the past 15 years. You may receive solar incentives from the federal government, the Alabama government or from your local utility company. Talking to your local Homewood solar panel installer is the right first step towards getting the most money possible when you switch to solar energy.
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EcoWatch's Homewood, AL Solar Incentives FAQs
What if I want to add a solar system to a vacation home, rental property or commercial property? Can I still qualify for incentives?
Many solar incentives apply to a property located within the United States that you own; most secondary residences fall into this category. Other solar incentives may be 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 apply to your specific situation.
How can I find out if I qualify for certain solar incentives?
Typically, solar incentives apply to:
- a new solar system
- installed on property you own
- within the U.S.
- within the date range specified by a particular incentive.
Specific incentives, including ones handled by the Alabama government or by your county/municipality, may have additional qualifications. Get in touch with your local Homewood solar installer to learn more about what incentives your project may qualify for.
How much will a solar system save me annually on my electric bill in Homewood?
Once you add solar panels to your home in Homewood, you can expect to save about $1,126.60 per year, or about $21,405.40 over the next 20 years.
How long until the federal solar tax credit ends?
The Clean Energy Credit (previously called the federal solar tax credit, or 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 use multiple types 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 talk through your ideas with your local Homewood solar installer. They can help you as you 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.