2025 Solar Incentives Guide for Jacksonville, AL - Tax Credits & Rebates

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

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

Solar incentives are intended to make renewable energy usage more affordable through financial incentives for those who install solar panels on their homes. You may qualify for several kinds of incentives, such as 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 state of Alabama and others from the federal government. Categories of solar incentives include:

• Net Metering: Net metering becomes relevant once your solar system is up and running. If you have a net metering agreement in place with your Jacksonville utility company, they will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some locations, this credit is dollar-for-dollar, while in other places you might make back a percentage of the value.
• Rebates: Solar rebates may be provided by your local utility company, or by your county or state. These rebates work as cash back that is applied after you pay for solar panels and before tax credits are calculated.
• Tax Credits: Tax credits lower, dollar-for-dollar, the amount of income tax you owe the federal government. Tax credits differ from tax deductions.
• Tax Exemptions: Tax exemptions can come in two forms. First, there 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 ignore the added value of your solar system when calculating property tax for your home.

Federal Solar Incentives

Federal solar incentives are probably the first thing that comes to mind when you think about solar incentives. The Federal Solar Investment Tax Credit, or ITC, is probably the most commonly known federal solar incentive. The ITC provides you with a tax credit for a set percentage of your solar system's cost.

The ITC applies to the value of solar panels installed on your primary or secondary residence in the United States. The solar system has to have been installed after January 1, 2006, on a property owned by you for you to be eligible for the credit. The ITC initially covered 30% of all installation costs (panels, equipment, labor and accessories), although the amount has fluctuated slightly over the last few years between 26-30%. The installation date of your solar system will determine what percentage you are eligible for. There is no cap on the amount you can claim.

Your local Jacksonville solar panel installer can provide more information about the ITC and how it might apply to your situation.

The Inflation Reduction Act, passed in August 2022, expanded and extended the ITC (as well as retitling it the Clean Energy Credit). The Clean Energy Credit bolsters the current credit, increasing it up to 30% for solar installations undertaken between January 1, 2022, and December 31, 2032. After this, the credit percentage will be reduced slightly each year until the end of the program in 2035. The expansion to the program also makes credits for energy storage systems even easier to claim, starting in 2023.

Click here to learn more about the new Inflation Reduction Act. To fully understand how the new Clean Energy Credit will apply to you, talk to your local Jacksonville solar installation expert.

State & Local Solar Incentives

In addition to those provided at the federal level, there are often also state solar incentives. Rebates, tax credits and more may be available at a more local level. Certain incentives are ongoing, while others might only be available for a limited time. These incentives might be provided by your county or municipality, or by the Alabama government.

Next Steps for Installing Solar in Jacksonville

The large number of solar incentives available has enormously increased the adoption of solar energy nationwide over the last 15 years. You may receive solar incentives from your local utility company, the Alabama government or the federal government. Reaching out to your local Jacksonville solar panel installer is the best first step towards getting the most money possible when you switch to solar energy.