2024 Solar Incentives Guide for Leeds, AL - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Leeds.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2024 and beyond)
- Ways to optimize your solar investment
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What Solar Tax Credits, Incentives, and Rebates are Available in Leeds?
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" broadly refers to financial incentives implemented by the government and by solar companies to encourage the adoption and use renewable energy by making installing and using solar panels more affordable. You might qualify for different kinds of incentives, including discounts, cash back or credit towards your monthly utility bill, depending on your situation. Certain incentives come from your specific utility company, county or municipality, some from the Alabama government and others from the federal government. You might qualify for any of the following types of solar incentives:
- 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 your purchase of a solar system and before tax credits are calculated.
- Tax Exemptions: These may come in the form of property tax exemptions, which allow you to exclude the value added by your solar panels when paying property tax on your home. You could also look for exemptions on sales tax at the time of purchase.
- Tax Credits: Tax credits are dollar-for-dollar reductions (not deductions) in how much in taxes you owe the federal government.
- Net Metering: Net metering factors in once your solar panels are up and running. If you have in place a net metering agreement with your Leeds utility company, it will subtract the value of the excess energy produced by your solar system from your utility bill each month. In some locations, this is a dollar-for-dollar credit, while in others you might receive a refund equivalent to a percentage of the value.
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Federal Solar Incentives
When thinking about solar incentives, federal incentives are likely the first thing that comes to mind. The Federal Solar Investment Tax Credit, or ITC, is probably the most well-known federal solar incentive. The ITC provides a tax credit for a set percentage of the cost of your solar system.
The ITC applies to solar systems installed after January 1, 2006, on a primary or secondary residence that you own in the United States. Initially, the credit applied to 30% of the total cost – for panels, labor, accessories and equipment – although it may range from 26-30%, depending on the installation date of your solar system. There is no cap on the claim amount.
Your local Leeds solar panel installation expert can offer more information about the ITC and how it may 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 runs until 2035. Solar installation projects started after January 1, 2022, and completed by the end of 2032 may qualify for a 30% tax credit. The amount will then decrease slightly on a yearly basis until the current program ends. Starting in 2023, the program expansion will also make it easier to get credit for energy storage systems.
Click here to learn more about the new Inflation Reduction Act. Your local Leeds solar panel company can answer any questions you have and explain how the new Clean Energy Credit may apply to you.
State & Local Solar Incentives
Rebates, tax credits and more can be provided at multiple levels. In addition to federal solar incentives, there are often state and local ones as well. Some incentives are ongoing, while others may only be available for a limited time. Solar incentives might be given by the Alabama government, or by your county or municipality.
Next Steps for Installing Solar in Leeds
You can apply for solar incentives from the federal government and the Alabama government, as well as from your local utility company. This increase in availability of solar initiatives over the last 15 years has helped increase solar adoption nationwide. Reach out to your local solar panel installation expert today to find out more information and to save as much money as possible on solar panels for your Leeds home.
EcoWatch's Leeds, AL Solar Incentives FAQs
If I already have a solar system installed on my house, can I still claim incentives?
If your solar system was installed after January 1, 2022, you may qualify for the recently increased 30% tax credit under the Inflation Reduction Act. If your system was installed between 2006 and 2021, you might qualify for a tax credit between 26% and 30%, depending on the year it was installed. Reaching out to the company that installed your solar system, or any local Leeds solar installer, can help you learn what incentives you qualify for.
How much can I save on my electric bill annually if I add solar panels to my house in Leeds?
On average, Leeds homeowners who install solar panels save around $1,126.68 per year, or about $21,406.84 over 20 years after making the switch.
What are the highest-rated solar panel installation companies near me?
To find the right solar panel installer for you, check out our guide to the best solar companies in Leeds.
Can I qualify for incentives both towards the up-front cost of solar panels, and later as reimbursement?
Yes, you can receive both rebates and tax credits towards the cost of your solar panels. Depending on which incentives you are receiving, they may apply in a different order. Be sure to speak with your solar installer or a local tax professional to ensure that you are claiming the correct incentives and getting the most money possible.
Can I use solar and another type of renewable energy in combination to power my home?
You can use multiple types of renewable energy, or a combination of renewable and non-renewable energy, to power your home. Make sure you go over your ideas with your local Leeds solar installer. They can help you plan your project and educate you on the 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.