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

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

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Solar incentives are intended to make renewable energy usage more affordable via financial incentives for individuals who install solar panels on their homes. Different kinds of incentives, like cash back, discounts or monthly utility bill credits, might be available to you. Some incentives may be offered by the Alabama government, by your utility company or by county or municipality, while others are federal. Some broad categories of solar incentives include:

• Rebates: Rebates, or cash back after a purchase, are usually applied prior to any solar tax credits being calculated. These rebates may be provided by your local utility company, by your county or by your state.
• Net Metering: Don't forget to talk to your Huntsville utility company about signing a net metering agreement. This will allow you to get a 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.
• Tax Exemptions: Tax exemptions can come in two forms. First, there is sales tax exemption, applied when you purchase solar panels. The second is property tax exemption. This allows you to ignore the value added by your solar system when paying property tax on your house.
• Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the government. (This is different from a tax deduction.)

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Federal Solar Incentives

When thinking about solar incentives, federal incentives may be the first thing that comes to mind. The Federal Solar Investment Tax Credit, or ITC, is likely the best-known federal solar incentive. The ITC provides a tax credit for a set percentage of your solar system's cost.

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, accessories, labor and equipment – although that amount may range from 26-30%, depending on when your solar project was undertaken. There is no cap on the amount you can claim.

To know exactly how much the ITC could save you, speak with your local Huntsville solar panel installer.

The ITC has been renewed and expanded following the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. The Clean Energy Credit lasts until 2035. Any solar installation project that is completed between January 1, 2022, and December 31, 2032, may qualify for a 30% tax credit. The amount will decrease slightly each year until the current program ends. Starting in 2023, the program expansion will also make claiming credit for energy storage systems easier than ever before.

Click here to learn more about the new Inflation Reduction Act. Your local Huntsville solar panel company can answer any questions you have and explain how the new Clean Energy Credit applies to you.

State & Local Solar Incentives

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

Next Steps for Installing Solar in Huntsville

You can receive solar incentives from the federal government and the Alabama government, as well as from your local utility company. The growing availability of solar initiatives over the last 15 years has helped increase solar adoption nationwide. Reaching out to your local Huntsville solar panel installer is the best first step towards making sure you get all the incentives you qualify for when you switch to solar energy.