2024 Solar Incentives Guide for Prichard, AL - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Prichard.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2024 and beyond)
- Ways to optimize your solar investment
Solar installers are experts in maximizing your solar tax credits and rebates.
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What Solar Tax Credits, Incentives, and Rebates are Available in Prichard?
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/
The term "solar incentives" refers to financial incentives that are in place to encourage people to use renewable energy by making solar panels more affordable. Solar incentives can include upfront discounts, cash back or credit towards your monthly utility bill. Some incentives are given by the federal government, some by the state of Alabama and some by your specific utility company, county or municipality. Types of solar incentives might include:
- Tax Exemptions: Sales tax exemptions go into effect at the time of purchase for your solar system. Property tax exemptions allow you to exclude the added value of your solar system when you calculate how much property tax you need to pay on your home.
- Tax Credits: Unlike tax deductions, tax credits reduce, dollar-for-dollar, the amount of income tax that you owe the federal government.
- Rebates: A rebate is a partial refund given after you've purchased your solar system. These 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 calculating tax credits.
- Net Metering: Net metering becomes relevant once your solar panels are up and running. If you've signed a net metering agreement with your Prichard utility company, they will subtract the value of the excess energy produced by your solar system from your utility bill each month. In some places, this credit is dollar-for-dollar, while in other places you may receive a refund equivalent to a percentage of the value.
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Federal Solar Incentives
Federal solar incentives are probably the first thing that comes to mind when you think about solar incentives. A federal incentive many people are likely familiar with is the Federal Solar Investment Tax Credit (ITC). This incentive is a tax credit for a certain percentage of the cost of your solar system.
The ITC can be applied to solar panels installed after January 1, 2006, on a primary or secondary residence in the United States that you own. The credit initially covered 30% of the total cost – for panels, labor, accessories and equipment – although the percentage may range from 26-30%, depending on when your solar system was installed. There is no cap on the amount you can claim.
Have questions about how the ITC applies to your specific situation? Contact your local Prichard solar panel installer to get more information.
In August 2022, the Inflation Reduction Act made revisions to the ITC, now titled the Clean Energy Credit. For solar systems installed between January 1, 2022, and December 31, 2032, homeowners can apply for a credit equal to 30% of the total cost. The percentage will then decrease annually until the Clean Energy Credit ends in 2035. Starting in 2023, the expansion will also make claiming credit for energy storage systems easier than ever before.
More information about the new Inflation Reduction Act can be found here. The easiest way to understand how the new Clean Energy Credit might apply to you is to talk with your local Prichard solar panel installation expert.
State & Local Solar Incentives
Some solar incentives may be provided at the state and local level. Similar to federal incentives, these might include tax credits, rebates and more. These incentives may be distributed by your county or municipality, or by the Alabama government. Certain incentives are ongoing, while others are available for a limited time.
Next Steps for Installing Solar in Prichard
Solar incentives might be provided by your local utility company, the Alabama government or the federal government. The growing number of available solar incentives has contributed to a large increase in solar energy use in the last 15 years. We suggest talking to your local Prichard solar installation company for more information about these incentives and to be sure that you're getting all the money you can for your solar system.
EcoWatch's Prichard, AL Solar Incentives FAQs
I already have solar panels. Are there any incentives that I qualify for?
You should plan to talk to a representative from the company that installed your solar system – or speak to a local Prichard solar installer — to clarify which incentives you may qualify for. If your system was installed after January 1, 2022, you likely qualify for the newly increased 30% tax credit under the Inflation Reduction Act. Solar systems installed between 2006 and 2021 may qualify for a tax credit of 26-30%.
How much will solar panels save me on my electric bill in Prichard annually?
Generally, homeowners in Prichard who install solar panels save around $1,202.87 per year, or approximately $22,854.46 over 20 years after they make the switch.
Can I apply for incentives both towards the initial cost of solar panels, and later as reimbursement?
The order that incentives will be applied in might vary depending on which incentives you are eligible for but typically yes, you can claim multiple types of incentives for your solar project. Check with your solar installer or a local tax professional to make sure you are claiming all the incentives you qualify for and applying them in the correct order.
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 go over your ideas with your local Prichard solar installation expert. They can help you as you 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.