2023 Solar Incentives Guide for Phenix City, AL - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Phenix City.
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 September 15, 2023
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What Solar Tax Credits, Incentives, and Rebates are Available in Phenix City?
Local Option- Property Tax Exemption for Renewable Energy Faclities
Alabama Power - Residential Heat Pump Loan Program
Federal Residential Renewable Energy Tax Credit
Source: https://www.dsireusa.org/
Solar incentives are meant to encourage homeowners to make the switch to renewable energy by offering financial incentives meant to lower the burden of solar panel installation and use. Different types of incentives, including discounts, cash back or credit towards your monthly utility bill, might be available to you. Certain incentives may be handled by the state of Alabama, by your utility company or by county or municipality, while other incentives are federal. Categories of solar incentives include:
- Net Metering: Net metering becomes relevant once your solar panels are up and running. If you have in place a net metering agreement with your Phenix City utility company, it will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some places, this is a dollar-for-dollar credit, while in others you may receive a refund equivalent to a percentage of the value.
- Tax Exemptions: Your solar panel system may qualify for exemptions on both sales and property tax. Sales tax exemptions are effective at the time of purchase. Property tax exemptions let you exclude the value that solar panels add when you are calculating property taxes on your house.
- Rebates: Solar rebates may be provided by your local utility company, or by your state or county. These rebates work as partial refunds that are applied after you pay for a solar system and before tax credits are calculated.
- Tax Credits: Tax credits lower, dollar-for-dollar, how much income tax you owe the government. Tax credits differ from tax deductions.
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Federal Solar Incentives
When someone says "solar incentives," you likely think of federal incentives first. It's likely that you've heard of the Federal Solar Investment Tax Credit, or ITC. This is a tax credit that reduces your taxes by a predetermined percentage of the money you spend installing solar panels.
The ITC can be applied to 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, labor and equipment. This credit can be claimed on solar panels installed on a primary or secondary residence that you own in the United States. The original amount you could claim 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 Phenix City solar panel installation expert is the best way to learn more about how the ITC applies to your situation.
The ITC was renewed and increased in scope after the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. The Clean Energy Credit has increased the current credit up to 30% for solar installations undertaken between January 1, 2022 and December 31, 2032. After 2032, the percentage will see a slight decrease annually until the program expires in 2035. Starting in 2023, the expansion to the program will also make credits for energy storage systems even easier to claim.
More information about the new Inflation Reduction Act can be found here. The best way to understand how the new Clean Energy Credit will apply to you is to speak with your local Phenix City solar panel installation expert directly.
State & Local Solar Incentives
Federal solar incentives are not your only option; rebates, tax credits and more may be offered at the state and local level. Some incentives are ongoing, while others are only available for a limited time. They may be offered by the Alabama government, or by your county or municipality.
Next Steps for Installing Solar in Phenix City
You can qualify for solar incentives from the Alabama government and the federal government, as well as from your local utility company. The increased availability of solar initiatives in the past 15 years has helped increase solar adoption nationwide. We recommend talking to your local Phenix City solar installation company to learn more about these incentives and to ensure that you're getting the most money possible for your solar system.
EcoWatch's Phenix City, AL Solar Incentives FAQs
Can I receive any incentives when I add solar panels to a rental property, vacation home or commercial property?
While we recommend getting in touch with your local solar installer and/or tax professional to fully understand what solar incentives apply to you, many incentives apply to a second home, as long as it is in the United States and owned by you. There may be additional incentives available for commercial properties specifically, depending on the specifics.
How much can I save on my electric bill annually if I add solar panels to my Phenix City home?
After adding solar panels to your house in Phenix City, you can expect to save around $1,125.48 per year, or around $21,384.05 over 20 years.
What are some environmental benefits of installing solar panels on my home?
Solar energy is renewable — by switching where you get your energy, you help reduce the strain on our planet's resources. Solar panels can also reduce the CO2 emissions from your home by 450 pounds annually, or around 9,000 pounds in 20 years.
If I trade in my appliances for ones that can utilize solar energy, are there credits that I can claim?
The new Inflation Reduction Act creates several new financial incentives to encourage you to make eco-friendly improvements to your home. More details regarding these incentives, including information about incentives for purchasing new appliances, can be found here.
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.