2025 Solar Incentives Guide for Selma, AL - Tax Credits & Rebates

In this guide, we'll cover the latest solar incentives and rebates available in Selma.

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.
Get a free quote from one of our trusted Selma solar installers to see how much you can save.

By EcoWatch Local Advisors

Data Analysis: James Savino

Ranking Methodology: Karsten Neumeister

Updated January 24, 2025

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We work with a panel of solar experts to create unbiased reviews that empower you to make the right choice for your home. No other site has covered renewables as long as us, which means we have more data and insider information than other sites. Our rankings are never affected by revenue or partnerships.

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

Wood-Burning Heating System Deduction

Incentive Type:
Personal Tax Deduction

Local Option- Property Tax Exemption for Renewable Energy Faclities

Incentive Type:
Property Tax Incentive

Alabama Power - Residential Heat Pump Loan Program

Incentive Type:
Loan Program
Varies, up to 100% of project cost for qualifying customers

Central Alabama Electric Cooperative - Residential Energy Efficiency Rebate Program

Incentive Type:
Rebate Program
Water Heater: $235 - $375
Dual Fuel or Mini-Split Heat pumps: $300- $350/ton
Converting furnace to heat pump in new manufactured homes: $400-$700
Converting furnace to heat pump in existing manufactured homes: $400/ton

Federal Residential Renewable Energy Tax Credit

Incentive Type:
Personal Tax Credit
30% federal tax credit for systems placed in service after 12/31/2021 and before 01/01/2033. Good for: solar water heat, solar photovoltaics, biomass, geothermal heat pumps, wind (small), fuel cells using renewable fuels.

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


Solar incentives are designed to make renewable energy usage more affordable via financial incentives for those who install solar panels on their homes. Different types of incentives, like discounts, cash back or credit towards your monthly utility bill, may be available to you. Certain incentives may be provided via the Alabama government, by your utility company or by county or municipality, while others are federal. Categories of solar incentives include:

  • Tax Exemptions: These may come in the form of property tax exemptions, which let you ignore the value added by your solar panels when paying taxes on your home. They may also include exemptions on sales tax at the time of purchase.
  • Tax Credits: Tax credits decrease, dollar-for-dollar, how much income tax you owe the government. Tax credits are different from tax deductions.
  • Rebates: Solar rebates might be provided by your county or state, or by your local utility company. These rebates work as partial refunds that are applied after your purchase of solar panels and before tax credits are calculated.
  • Net Metering: Net metering factors in after your solar panels are up and running. If you've signed a net metering agreement with your Selma utility company, the company will subtract the value of the excess energy produced by your solar system from your utility bill each month. In some areas, this credit is dollar-for-dollar, while in others you might 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. One of the incentives many people are likely familiar with is the Federal Solar Investment Tax Credit (ITC). This is a tax credit for a certain percentage of your solar system's cost.

The ITC was originally for 30% of the cost of solar system installation, although it has fluctuated slightly over time between 26-30%. The installation date of your solar system will determine what percentage you qualify for. The total installation cost includes the panels themselves as well as the cost of equipment, labor and accessories. There is no maximum amount you can claim. The ITC applies to solar systems installed after January 1, 2006, on your primary or secondary residence. The residence must be in the United States and owned by you.

Your local Selma solar panel installer can offer more information about the ITC and how it might apply to your situation.

The Inflation Reduction Act, passed in August 2022, added more provisions to the ITC (as well as retitling it the Clean Energy Credit). For solar systems installed between January 1, 2022, and December 31, 2032, homeowners may be eligible for a credit for 30% of the total cost. The percentage will then decrease annually until the Clean Energy Credit ends in 2035. The program expansion also makes it easier to get credit for energy storage systems, starting in 2023.

Click here to learn more about the new Inflation Reduction Act. The easiest way to learn more about how the new Clean Energy Credit might apply to you is to get in touch with your local Selma solar panel installation expert.

State & Local Solar Incentives

Some solar incentives are often also provided by state and local governments. As with federal incentives, these may include tax credits, rebates and more. The incentives — which might be handled 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 Selma

There are a variety of solar incentives: those offered by local utility companies, those offered by the federal government and those given by the Alabama government, to name a few. The use of solar energy has increased tremendously in the last 15 years, partially due to these incentives. Getting in touch with your local Selma solar panel installer is the best first step towards getting all the incentives you qualify for when you switch to solar energy.

EcoWatch's Selma, AL Solar Incentives FAQs

How do I learn if I qualify for certain solar incentives?

Typically, solar incentives apply to:

  1. a new solar panel system
  2. installed on a property that you own
  3. within the U.S.
  4. between the dates specified by a particular incentive.

Specific incentives, including those run by the Alabama government or by your county/municipality, may have additional qualifications. Get in touch with your local Selma solar installer to discover what incentives your project will qualify for.

How much can I save on my electric bill annually if I add solar panels to my Selma home?

On average, Selma homeowners who install solar panels save about $1,255.01 per year, or around $23,845.14 over 20 years after making the switch.

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 Selma.

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 scheduled to end January 1, 2035. The current 30% credit will end in 2032, replaced by a 26% credit in 2033 and a 22% credit in 2034.

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.

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