2023 Solar Incentives Guide for Mountain Brook, AL - Tax Credits & Rebates

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

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

Solar incentives are meant to encourage homeowners to switch to renewable energy by providing incentives that lower the financial burden of solar panel installation and use. Solar incentives might include upfront discounts, cash back or credit towards your monthly utility bill. Some incentives are offered by the federal government, some by the Alabama government and some by your specific utility company, county or municipality. Types of solar incentives might include:

• Rebates: Solar rebates might be offered by your local utility company, or by your county or state. These rebates are essentially partial refunds that are applied after you purchase a solar system and before tax credits are calculated.
• Tax Credits: Tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the government. (A tax credit is different from a tax deduction.)
• Tax Exemptions: Sales tax exemptions go into effect at the time of purchase for your solar panels. Property tax exemptions let you exclude the value added by your solar system when you're calculating the amount of property tax you need to pay.
• Net Metering: You can sign a net metering agreement with your Mountain Brook utility company, that may apply to all or a percentage of the excess electricity your solar panels generate. They will then deduct this value from your monthly utility bill.

Federal Solar Incentives

When thinking about solar incentives, you likely think of federal incentives first. 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 certain percentage of the cost of your solar system.

The ITC applies towards solar systems installed after January 1, 2006 and lets you deduct from your taxes a percentage of the total cost of solar panels, accessories, equipment and labor. This credit can be claimed on a solar panel system installed on a primary or secondary residence in the United States that you own. The original claim amount was 30% of the total cost, although the amount you can claim may range between 26-30%. There is no maximum claim amount.

To find out exactly how much the ITC could save you, talk to your local Mountain Brook solar panel installation expert.

In August 2022, the ITC (now referred to as the Clean Energy Credit) was bolstered by the passage of the Inflation Reduction Act. Homeowners can now receive a credit equal to 30% of the total costs of solar system installation for projects that began after January 1, 2022 and will be finished by the end of 2032. The percentage will then begin to decrease annually until the Clean Energy Credit expires in 2035. The program expansion also makes credits for energy storage systems even easier to claim, beginning in 2023.

More information about the new Inflation Reduction Act can be found here. To fully understand how the new Clean Energy Credit will apply to you, reach out to your local Mountain Brook solar installation company.

State & Local Solar Incentives

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

Next Steps for Installing Solar in Mountain Brook

You can qualify for solar incentives from the Alabama government and the federal government, as well as from your local utility company. The growing availability of solar initiatives over the last 15 years has helped increase solar adoption nationwide. Getting in touch with your local Mountain Brook solar panel installation company is the right first step towards getting all the incentives you qualify for when you switch to solar energy.