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 September 15, 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/
Solar incentives are intended to make renewable energy usage more affordable through financial incentives to help people install solar panels on their homes. Various types of incentives, like discounts, cash back or credit towards your monthly utility bill, may be available to you. Some incentives may be offered by the Alabama government, by your utility company or by county or municipality, while other incentives are federal. Some broad categories of solar incentives include:
- Tax Credits: These credits are dollar-for-dollar reductions (not deductions) in the amount of tax that you owe the federal government.
- Net Metering: Don't forget to speak to your Homewood utility company about signing a net metering agreement. This allows you to receive credit towards your monthly utility bill for the value of excess energy generated by your solar panels. You might receive either a dollar-for-dollar credit or a percentage of the value.
- Rebates: A rebate is a partial refund after the purchase of your solar panels. Rebates may be offered by your local utility company, your state or your county. The cash back that you get from the rebates is normally applied before tax credits are calculated.
- Tax Exemptions: Tax exemptions may come in one of two forms. The first is sales tax exemption, which is applied at the time you purchase your solar panels. The second is property tax exemption, which allows you to exclude the value added by your solar system when calculating property tax for your home.
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Federal Solar Incentives
When people think of solar incentives, federal incentives are likely the first thing that comes to mind. You've likely heard of the Federal Solar Investment Tax Credit, or ITC. The ITC is a tax credit equal to a certain percentage of the money you spend on your solar system.
The ITC applies to the total cost of installing a solar system, including the panels themselves as well as accessories, labor and equipment. You can claim this credit for panels installed after January 1, 2006 on a primary or secondary residence that you own, as long as it is located in the United States. 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 claim amount.
Your local Homewood solar panel installation expert can give you more information about the ITC and how it might apply to your situation.
In August 2022, the ITC (now referred to as the Clean Energy Credit) was expanded and extended by the passage of the Inflation Reduction Act. The Clean Energy Credit lasts until 2035. Solar installation projects started after January 1, 2022 and completed by the end of 2032 may qualify for a 30% tax credit. This amount will decrease slightly each year until the current program ends. Starting in 2023, the expansion to the program will also make claiming credit for energy storage systems easier than ever before.
Click here to learn more about the new Inflation Reduction Act. The best way to fully understand how the new Clean Energy Credit will apply to you is to reach out to your local Homewood solar panel installation expert with your questions.
State & Local Solar Incentives
Some solar incentives are often also provided by state and local governments. Like with federal incentives, these could include tax credits, rebates and more. The incentives — which might be given by the state of Alabama, or by your county or municipality — could be offered on an ongoing basis, or for only a limited time.
Next Steps for Installing Solar in Homewood
Solar incentives might come from your local utility company, the federal government or the Alabama government. The variety of available solar incentives has facilitated the nationwide growth of solar energy use in the last 15 years. Contact 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 Homewood home.
EcoWatch's Homewood, AL Solar Incentives FAQs
What if I add solar panels 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 will fall into this category. There may be other solar incentives available for commercial properties, depending on the details. We recommend speaking with your local solar installer and/or tax professional to fully understand what incentives apply to your specific situation.
How can I learn if I qualify for solar incentives?
Broadly, solar incentives apply to:
- a new solar system
- installed on property that you own
- within the U.S.
- between the dates specified by a particular incentive.
Specific incentives, including those given out by the Alabama government or by your county/municipality, may have additional qualifications. Talk to your local Homewood solar installer to learn more about what incentives your project will qualify for.
How much can I save on my electric bill annually if I install solar panels on my Homewood home?
After adding solar panels to your home in Homewood, you can expect to save about $1,126.60 per year, or about $21,405.40 over 20 years.
What are some environmental benefits of adding solar panels to my house?
You can reduce your carbon footprint by 450 pounds of CO2 a year by installing solar panels. This adds up to approximately 9,000 pounds in 20 years. Solar is also a renewable energy source, which means that switching your home over lessens the drain on our planet's resources.
How long until the federal solar tax credit ends?
The federal solar tax credit, formerly known as the ITC and now titled the Clean Energy Credit, is scheduled to end January 1, 2035. The current 30% credit will end in 2032, replaced by a 26% credit in 2033 and a 22% credit 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.