2024 Solar Incentives Guide for Montgomery, AL - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Montgomery.
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 Montgomery?
Local Option- Property Tax Exemption for Renewable Energy Faclities
Alabama Power - Residential Heat Pump Loan Program
Dixie Electric Cooperative - Residential Energy Efficiency Rebate Program
Central Alabama Electric Cooperative - Residential Energy Efficiency Rebate Program
Dual Fuel or Mini-Split Heat pumps: $300- $350/ton
Converting furnace to heat pump in new manufactured homes: $400-$700
Converting furnace to heat pump in existing manufactured homes: $400/ton
Federal Residential Renewable Energy Tax Credit
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. Incentives may include things like discounts, cash back or credit on your utility bill each month. Some incentives are handled federally, while others are provided by the Alabama government or your utility company, county or municipality. Some broad categories of solar incentives include:
- Tax Exemptions: Sales tax exemptions go into effect at the time of purchase for your solar system. Property tax exemptions let you exclude the added value of your solar system when calculating the amount of property tax you need to pay on your home.
- Net Metering: Net metering becomes relevant after your solar system is up and running. If you've signed a net metering agreement with your Montgomery utility company, the company will subtract the value of the excess energy your solar system produces from your monthly utility bill. In some areas, this is a dollar-for-dollar credit, while in other places you may receive a refund equivalent to a percentage of the value.
- Tax Credits: Unlike tax deductions, tax credits reduce, dollar-for-dollar, the amount of income tax that you owe the government.
- Rebates: Your solar installer might help you claim a rebate, or partial refund of your purchase, for your solar panels. Counties or states will also offer limited-time rebates at various times. If you receive a rebate, that amount will usually be deducted from your total price before any tax credits are calculated.
Best National Provider
SunPower
- Most efficient panels on the market
- National coverage
- Cradle to Cradle sustainability certification
- Great warranty coverage
- Expensive
- Customer service varies by local dealer
Best Technology
Tesla Energy
- Price-match guarantee
- Sleek, efficient, and durable solar panels
- Best solar battery on the market
- Some reported issues with customer service
- Customer service varies by local dealer
Federal Solar Incentives
Federal incentives are the kind of incentives that you are most likely to have some knowledge of. You may have heard of the Federal Solar Investment Tax Credit, or ITC. This incentive is a tax credit that reduces your taxes by a certain percentage of the money you spend on solar panels for your home.
The ITC was originally for 30% of the total cost of installing a solar system, although that number has fluctuated slightly over the years between 26-30%. The percentage you qualify for will depend on when your solar system was installed. The total installation cost includes the panels themselves as well as the cost of labor, accessories and equipment. There is no maximum claim amount. The ITC applies to solar panels installed after January 1, 2006, on your primary or secondary residence. The residence must be owned by you and in the United States.
Talking to your local Montgomery solar panel installation expert is the best way to learn more about how the ITC could apply to your situation.
In August 2022, the Inflation Reduction Act expanded and extended the ITC, now titled the Clean Energy Credit. Under the new program, solar installation projects that are completed between 2022 and 2032, may be eligible for a 30% tax credit. This percentage will then see a slight annual decrease until the current Clean Energy Credit expires in 2035. The program expansion also makes claiming credit for energy storage systems easier than ever before, beginning in 2023.
More information about the new Inflation Reduction Act can be found here. The best way to learn more about how the new Clean Energy Credit applies to you is to reach out to your local Montgomery solar panel installers with your questions.
State & Local Solar Incentives
Some solar incentives are often also provided at the state and local level. Similar to federal incentives, these could include tax credits, rebates and more. Some incentives are ongoing, while others are only available for a limited time. They might be provided by your county or municipality, or by the Alabama government.
Next Steps for Installing Solar in Montgomery
You can qualify for solar incentives from the Alabama government and the federal government, as well as from your local utility company. Growing availability of solar initiatives in the past 15 years has helped greatly increase nationwide adoption of solar energy. Reaching out to your local Montgomery solar panel installer is a great first step towards getting all the incentives you qualify for when you switch to solar energy.
EcoWatch's Montgomery, AL Solar Incentives FAQs
How can I find out if I qualify for solar incentives?
It's a good idea to talk to your local Montgomery solar installer to get an understanding of which incentives your project will qualify for. Typically, solar incentives apply to new solar panel systems installed on property you own (in the U.S.) between the dates specified by the incentive. Some incentives, such as those provided at the level of the Alabama government, might have additional requirements.
What are the highest-rated solar panel installation companies near me?
To find a top-rated solar panel installer, check out our guide to Montgomery's best solar panel companies.
What are some of the environmental benefits of switching to solar?
You can decrease your carbon footprint by 450 pounds of CO2 a year by switching to solar panels. This adds up to approximately 9,000 pounds in 20 years. Solar is also a renewable energy source, which means that making the switch lessens the drain on our planet's resources.
How long until the federal solar tax credit ends?
The federal solar tax credit, formerly called the ITC and now titled the Clean Energy Credit, is slated to end on January 1, 2035. The current 30% credit will end in 2032, replaced by a 26% credit in 2033 and a 22% credit in 2034.
Can I receive incentives both towards the initial cost of solar panels, and later as reimbursement?
Yes, you can claim both rebates and tax credits towards the cost of solar panels. Depending on which incentives you are claiming, they may apply in a different order. Make sure that you speak with your solar installer or a local tax professional to ensure that you are claiming the correct incentives and getting the most money you can.
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.