2024 Solar Incentives Guide for Huntsville, AL - Tax Credits & Rebates

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

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

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 on your utility bill each month. Some incentives are offered federally, while others are provided by the state of Alabama or your utility company, county or municipality. Types of solar incentives might include:

• Rebates: Your solar installer might help you claim a rebate, or partial refund of your purchase, for your solar panels. States or counties will also sometimes offer limited-time rebates. The value of a rebate will usually come off the total price before any tax credits are calculated.
• Net Metering: Be sure to talk to your Huntsville utility company about signing a net metering agreement. This allows you to get a credit towards your utility bill every month for the value of excess energy your solar panels generate. 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 let you ignore the value added by your solar panels when calculating the taxes you pay on your home. You could also look for exemptions on sales tax at the time of purchase.
• Tax Credits: Unlike tax deductions, tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the federal government.

Federal Solar Incentives

Federal incentives are the kind of incentives that you are most likely to have some familiarity with. The solar incentive that you're most familiar with is probably the Federal Solar Investment Tax Credit (ITC), which provides a credit on your taxes equal to a predetermined percentage of the cost of your solar system.

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. Originally, the tax credit was for 30% of the total cost – for panels, labor, equipment and accessories – 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.

Your local Huntsville solar panel installer can offer more information about the ITC and how it applies 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). For solar system installations that begin after January 1, 2022, and are completed by the end of 2032, homeowners can apply for a credit equal to 30% of the total cost. This percentage will decrease annually after 2032 until the Clean Energy Credit expires in 2035. Starting in 2023, the expansion will also make credits for energy storage systems even easier to claim.

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 Huntsville solar panel company with your questions.

State & Local Solar Incentives

Some solar incentives may be provided at the state and local level. As with federal incentives, these may include tax credits, rebates and more. These incentives — which might be given 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 Huntsville

There are many types of solar incentives: those provided by local utility companies, those offered by the Alabama government and those offered by the federal government, to name a few. The use of solar energy has increased tremendously in the last 15 years, thanks to these incentives. Getting in touch with your local Huntsville solar panel installation company is a great first step towards getting all the incentives you qualify for when you switch to solar energy.