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
The phrase "solar incentives" refers broadly to financial incentives designed to encourage people to use renewable energy by making solar panels more affordable. Incentives could include things like discounts, cash back or credit on your utility bill each month. Some incentives are offered by the federal government, while others are handled by the state of Alabama or your specific utility company, county or municipality. Some solar incentives you might qualify for are:
- Net Metering: Net metering factors in after your solar panels are up and running. If you have a net metering agreement with your Midfield utility company, the company will subtract the value of the excess energy your solar system produces from your monthly utility bill. In some locations, this is a dollar-for-dollar credit, while in others you might make back a percentage of the value.
- Tax Exemptions: Your solar panels might qualify for exemptions on both sales and property tax. Sales tax exemptions are effective at the time of purchase. Property tax exemptions allow you to ignore the value added by your solar panels when you are calculating property taxes on your house.
- Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the federal government. (This is different from a tax deduction.)
- Rebates: A solar rebate is a partial refund after the purchase of your solar system. Rebates might be offered by your local utility company, your county or your state. The cash back that you get from the rebates is normally applied before tax credits are calculated.
Federal Solar Incentives
Federal incentives are the kind of incentives that you are most likely to have heard of. The solar incentive that you may be most familiar with is the Federal Solar Investment Tax Credit (ITC), which gives you a credit on your taxes equal to a percentage of your solar system's cost.
The ITC originally covered 30% of the total cost of solar panel installation, and has fluctuated slightly over the last few years between 26-30%. The installation date of your solar system will determine what percentage you qualify for. The total cost of installation includes the panels themselves as well as the cost of accessories, labor and equipment. There is no maximum amount you can claim. The ITC can be applied to solar systems installed after January 1, 2006 on your primary or secondary residence. The residence must be owned by you and in the United States.
Your local Midfield solar panel installation expert can offer more information about the ITC and how it might apply to your situation.
In August 2022, the Inflation Reduction Act laid out new provisions for the ITC, now referred to as the Clean Energy Credit. The new Clean Energy Credit extends until 2035. You can now apply for a 30% credit for solar systems installed between 2022 and 2032. This new credit will then be decreased by a few percentage points every year until it expires. Starting in 2023, the expansion to the program will also make it easier to get credit for energy storage systems.
Click here to learn more about the new Inflation Reduction Act. To better understand how the new Clean Energy Credit applies to you, speak with your local Midfield solar installation company.
State & Local Solar Incentives
There are often state solar incentives available in addition to federal ones. Rebates, tax credits and more can be offered at a more local level. The 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 Midfield
There are a number of different solar incentives: those provided by the federal government, those provided by the Alabama government and those provided by local utility companies, to name a few. Solar energy utilization has increased tremendously in the last 15 years, thanks to these incentives. Your local Midfield solar panel installer can give you more information about which incentives you may qualify for, and get you on track to switch to renewable energy today.
EcoWatch's Midfield, AL Solar Incentives FAQs
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.