2023 Solar Incentives Guide for Pelham, AL - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Pelham.
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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By EcoWatch Local Advisors
Data Analysis: James Savino
Ranking Methodology: Karsten Neumeister
Updated May 04, 2023
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What Solar Tax Credits, Incentives, and Rebates are Available in Pelham?
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 implemented by the government and by solar companies to encourage the use of renewable energy by making installing and using solar panels more affordable. Solar incentives may 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 solar incentives you might qualify for are:
- Tax Exemptions: Sales tax exemptions go into effect at the point of sale for your solar panels. Property tax exemptions let you exclude the value added by your solar system when calculating the amount of property tax you need to pay on your house.
- Net Metering: Don't forget to talk with your Pelham utility company about signing a net metering agreement. This will allow you to get a credit towards your utility bill every month for the value of excess energy your solar panels generate. You might receive either a dollar-for-dollar credit or a percentage of the value.
- Rebates: Solar companies may help you claim a rebate, or partial refund after purchase, for your solar panels. States or counties will also sometimes offer limited-time rebates. The value of a rebate will usually be deducted from your total price before any tax credits are calculated.
- Tax Credits: Different from tax deductions, tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the government.
Federal Solar Incentives
Federal incentives are the type of incentives that you are most likely to have heard of. The Federal Solar Investment Tax Credit, or ITC, is probably the best-known federal solar incentive. The ITC offers a tax credit for a predetermined percentage of your solar system's cost.
The ITC covers solar systems installed after January 1, 2006 and lets you deduct from your taxes a percentage of the total cost of solar panels, labor, accessories and equipment. This credit can be claimed on a solar panel system installed on a primary or secondary residence that you own in the United States. 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.
To better understand how the ITC will apply to you, reach out to your local Pelham solar panel installer and ask for more information.
In August 2022, the Inflation Reduction Act laid out new provisions for the ITC, now dubbed the Clean Energy Credit. The Clean Energy Credit bolsters the current credit, increasing it up to 30% for solar installations undertaken between January 1, 2022 and December 31, 2032. At this point, the credit percentage will be reduced slightly each year until the end of the program in 2035. Starting in 2023, the program expansion will also make it easier to get credit for energy storage systems.
Click here to learn more about the new Inflation Reduction Act. To fully understand how the new Clean Energy Credit will apply to you, talk to your local Pelham solar installers.
State & Local Solar Incentives
In addition to federal solar incentives, there are often also state ones. Tax credits, rebates and more can be offered at a more local level. These solar incentives — which may be provided by your county or municipality, or by the state of Alabama — could be offered on an ongoing basis, or for only a limited time.
Next Steps for Installing Solar in Pelham
The large number of available solar incentives has contributed greatly to the increase in the adoption of solar energy nationwide over the last 15 years. You can get solar incentives from your local utility company, the Alabama government or the federal government. If you're prepared to make the change to solar energy, calling your local Pelham solar panel installation expert is a great first step.
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- Best solar battery on the market
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EcoWatch's Pelham, AL Solar Incentives FAQs
How do I learn if I qualify for different solar incentives?
In most cases, solar incentives apply to:
- a new solar panel system
- installed on property you own
- within the U.S.
- between the dates specified by a particular incentive.
Specific incentives, including those run by the Alabama government or by your county/municipality, might have additional qualifications. Speak with your local Pelham solar installer to learn more about what incentives your project may qualify for.
How much will a solar system save me on my electric bill in Pelham annually?
When you add solar panels to your Pelham home, you can expect to save around $1,108.35 per year, or around $21,058.71 over the next 20 years.
Who installs solar panel systems near me?
To find the right solar panel installer for you, check out our guide to the top solar companies in Pelham.
What are the environmental benefits of switching to solar energy?
You can lower your carbon footprint by 450 pounds of CO2 a year 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 lessens the drain on our planet's resources.
Can I use both 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. Make sure you talk through your ideas with your local Pelham solar installer. They can help you with the plan for your project and educate you on the various incentives that you will or won't 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.