2023 Solar Incentives Guide for Midfield, AL - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Midfield.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2023 and beyond)
- Ways to optimize your solar investment
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What Solar Tax Credits, Incentives, and Rebates are Available in Midfield?
Wood-Burning Heating System Deduction
Local Option- Property Tax Exemption for Renewable Energy Faclities
Alabama Power - Residential Heat Pump Loan Program
Federal Residential Renewable Energy Tax Credit
Solar incentives help mitigate the cost of installing solar panels on your home. Financial incentives like these are intended to encourage more homeowners to convert their home partially or fully to renewable energy. The incentives could include cash back, upfront discounts or monthly credits towards your utility bill. Some incentives are offered by the federal government, some by the state of Alabama and some by your specific utility company, county or municipality. Some broad categories of solar incentives include:
- Net Metering: Net metering becomes relevant once your solar panels are up and running. If you have a net metering agreement in place with your Midfield utility company, they will subtract the value of the excess energy produced by your solar system from your utility bill each month. In some areas, this credit is dollar-for-dollar, while in others you may be refunded a percentage of the value.
- Tax Credits: Unlike tax deductions, tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the federal government.
- Rebates: Rebates, or partial refunds after a purchase, are normally given before any solar tax credits are calculated. These rebates might be offered by your local utility company, by your state or by your county.
- Tax Exemptions: Your solar system may qualify for both sales tax and property tax exemptions. Sales tax exemptions come into effect at the time of purchase. Property tax exemptions allow you to ignore the value that solar panels add when calculating property taxes on your house.
Federal Solar Incentives
Federal incentives are the kind of incentives that you are most likely to have some knowledge of. The solar incentive that you may be most familiar with is the Federal Solar Investment Tax Credit (ITC), which provides a credit on your taxes equal to a percentage of your solar system's cost.
The ITC covers solar systems installed after January 1, 2006 and under this program you can deduct from your taxes a percentage of the total cost of solar panels, equipment, labor and accessories. This credit can be claimed on solar panels installed on a primary or secondary residence in the United States that you own. Originally, you could claim 30% of the total cost, although depending on when the project was completed, your credit may range from 26-30%. There is no maximum claim amount.
Your local Midfield solar panel installation expert can provide more information about the ITC and how it applies to your situation.
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 has increased the current credit up to 30% for solar installation projects started after January 1, 2022 and completed by the end of 2032. After 2032, the percentage will be reduced slightly each year until the end of the program in 2035. Starting in 2023, the expansion to the program will also make claiming credit for energy storage systems easier than ever before.
More information about the new Inflation Reduction Act can be found here. Your local Midfield solar panel installation experts can answer your questions and explain how the new Clean Energy Credit applies to you.
State & Local Solar Incentives
Some solar incentives are often also provided at the state and local level. Similar to federal incentives, these might include tax credits, rebates and more. Some incentives are ongoing, while others are offered for only a limited time. Local solar incentives might come from the Alabama government, or from your specific county or municipality.
Next Steps for Installing Solar in Midfield
Nationwide solar energy use has gone up significantly in the last 15 years, in part thanks to the proliferation of solar incentives. You might receive these incentives from the Alabama government, the federal government or your local utility company. Call your local solar panel installer today to discover more about the various programs and to save as much money as possible on solar panels for your Midfield home.
EcoWatch's Midfield, AL Solar Incentives FAQs
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