2023 Solar Incentives Guide for Northport, AL - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Northport.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2023 and beyond)
- Ways to optimize your solar investment
Solar installers are experts in maximizing your solar tax credits and rebates.
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Updated May 04, 2023
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What Solar Tax Credits, Incentives, and Rebates are Available in Northport?
Local Option- Property Tax Exemption for Renewable Energy Faclities
Alabama Power - Residential Heat Pump Loan Program
Federal Residential Renewable Energy Tax Credit
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Solar incentives are meant to encourage people to switch their home over to renewable energy by offering incentives meant to lower the financial burden of solar panel installation and use. Solar incentives may include upfront discounts, cash back or credit towards your monthly utility bill. Some incentives are provided by the federal government, some by the Alabama government and some by your specific utility company, county or municipality. Categories of solar incentives include:
- Net Metering: Net metering factors in after your solar panels are up and running. If you've signed a net metering agreement with your Northport utility company, the company will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some areas, this credit is dollar-for-dollar, while in others you may make back a percentage of the value.
- Tax Credits: Tax credits lower, dollar-for-dollar, how much income tax you owe the government. These differ from tax deductions.
- Rebates: A rebate is a partial refund after the purchase of your solar system. Rebates could be offered by your local utility company, your state or your county. The cash back that you get from the rebates is normally applied before tax credits are calculated.
- Tax Exemptions: Your solar panels might qualify for both sales tax and property tax exemptions. Sales tax exemptions are applied at the time of purchase. Property tax exemptions allow you to ignore the added value of the solar panels when calculating property taxes on your home.
Federal Solar Incentives
When you hear the term "solar incentives," federal incentives are likely the first thing that comes to mind. The solar incentive that you're most likely to have heard of is the Federal Solar Investment Tax Credit (ITC), which gives you a credit on your taxes equal to a specified percentage of your solar system's cost.
The ITC applies towards 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, accessories, equipment and labor. This credit can apply towards a solar panel system installed on a primary or secondary residence that you own in the United States. The original claim amount was 30% of the total cost, although depending on when the project was completed, your credit may range from 26-30%. There is no maximum amount you can claim.
Talking to your local Northport solar panel installation expert is the best way to learn more about how the ITC applies to your situation.
In August 2022, the ITC (now titled the Clean Energy Credit) was expanded and extended by the passing of the Inflation Reduction Act. The new Clean Energy Credit is valid until 2035. American homeowners are now eligible for a 30% credit for solar systems that began installation after January 1, 2022 and are completed by the end of 2032. The total credit will then decrease annually until the date of expiration. Beginning in 2023, it will also be easier to claim credits for energy storage systems under this new program.
More information about the new Inflation Reduction Act can be found here. Your local Northport solar panel installation experts can answer your questions and explain how the new Clean Energy Credit may apply to you.
State & Local Solar Incentives
Some solar incentives are often also provided by state and local governments. Like with federal incentives, these could include tax credits, rebates and more. Certain incentives are offered for only a limited time, while others are ongoing. Your local solar incentives might come from your county or municipality, or from the Alabama government.
Next Steps for Installing Solar in Northport
The large number of available solar incentives has helped tremendously increase the nationwide adoption of solar energy over the last 15 years. You might qualify for solar incentives from your local utility company, the Alabama government or the federal government. When you're ready to make the change to solar energy, getting in touch with your local Northport solar panel installation expert is an excellent place to start.
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EcoWatch's Northport, AL Solar Incentives FAQs
My home already has solar panels. Are there any incentives that I qualify for?
If your solar panels were installed after January 1, 2022, you may qualify for the recently increased 30% tax credit under the Inflation Reduction Act. If you had your system installed between 2006 and 2021, you might qualify for a tax credit between 26% and 30%, depending on the exact installation date. Reaching out to the company that installed your system, or any local Northport solar installer, can help you understand what incentives you can apply for.
What are the best solar panel installation companies near me?
To discover the best solar panel installers near you, take a look at our article on Northport's best solar panel companies.
What are some of the environmental benefits of switching to solar energy?
You can decrease your carbon footprint by 450 pounds of CO2 annually when you switch to solar panels. This adds up to around 9,000 pounds in 20 years. Solar is also a renewable energy source, which means that switching your home over reduces the drain on our planet's resources.
When does the federal solar tax credit end?
The federal solar tax credit, formerly called the ITC and now called 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 use a combination of solar and another type of renewable energy to power my home?
You can power your home with multiple types of renewable energy, or a combination of renewable and non-renewable energy. Be sure to talk through your plan with your local Northport solar installation expert. They can help you plan your project and also help you understand 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.