2023 Solar Incentives Guide for Southside, AL - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Southside.
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 March 14, 2023
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What Solar Tax Credits, Incentives, and Rebates are Available in Southside?
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" broadly refers to financial incentives put in place by solar companies and the government to encourage the adoption and use renewable energy by making the installation and use of solar panels more affordable. You might qualify for several kinds of incentives, such as discounts, cash back or credit towards your monthly utility bill, depending on your situation. Some incentives come from your specific utility company, county or municipality, some from the Alabama government and others from the federal government. Types of solar incentives might include:
- Tax Credits: Tax credits are dollar-for-dollar reductions (not deductions) in how much income tax you owe the government.
- Tax Exemptions: These may come in the form of property tax exemptions, which can let you exclude the value of your solar system when paying property tax on your house. They may also include exemptions on sales tax at the time of purchase.
- Net Metering: Net metering is an incentive you can get once your solar panels are up and running. If you've signed a net metering agreement with your Southside 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 other places you may make back a percentage of the value.
- Rebates: Solar rebates might be provided by your county or state, or by your local utility company. These rebates are essentially cash back that is applied after you pay for a solar system and before tax credits are calculated.
Federal Solar Incentives
Federal incentives are the type of incentives that you are most likely to have some knowledge of. The Federal Solar Investment Tax Credit, or ITC, is probably the best-known federal solar incentive. The ITC provides a tax credit for a predetermined percentage of your solar system's cost.
The ITC applies to the value of a solar system installed on your primary or secondary residence in the United States. The solar system has to have been installed on a property you own after January 1, 2006 for you to be eligible for the credit. The ITC originally paid out 30% of all costs (panels, accessories, labor and equipment), although the covered amount has fluctuated slightly over time between 26-30%. The installation date of your solar system will determine what percentage you are eligible for. There is no cap on the amount you can claim.
Reaching out to your local Southside solar panel installation expert is the best way to understand how the ITC could apply to you.
In August 2022, the Inflation Reduction Act expanded and extended the ITC, now called the Clean Energy Credit. For solar systems installed between January 1, 2022 and December 31, 2032, homeowners can receive a credit equal to 30% of the total cost. After 2033, the percentage will decrease annually until the Clean Energy Credit ends in 2035. The expansion also makes claiming credit for energy storage systems easier than ever before, beginning in 2023.
More information about the new Inflation Reduction Act can be found here. Your local Southside solar panel installation expert is the best person to answer your questions about the new Clean Energy Credit and how it will apply to you.
State & Local Solar Incentives
Tax credits, rebates and more might be provided at multiple levels. Along with federal solar incentives, there are often state and local ones as well. Certain incentives are offered for only a limited time, while others are ongoing. These local incentives might come from your county or municipality, or from the Alabama government.
Next Steps for Installing Solar in Southside
There are a number of different solar incentives: those provided by local utility companies, those provided by the federal government and those provided by the Alabama government, to name a few. Solar energy use has increased enormously in the last 15 years, partially due to these incentives. Call your local solar panel installation expert today to find out more information and to save the most money possible on solar panels for your Southside home.
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EcoWatch's Southside, AL Solar Incentives FAQs
What if I add a solar system to a rental property, vacation home or commercial property? Will I still qualify for incentives?
Many solar incentives are intended to apply to a property you own that is located within the United States, and most secondary residences fall into this category. There may be other solar incentives available for commercial properties, depending on the details. We recommend reaching out to your local solar installer and/or tax professional to fully understand what incentives will apply to your specific situation.
How do I learn if I qualify for solar incentives?
It's a smart idea to get in touch with your local Southside solar installer for a better understanding of which incentives your project may qualify for. Generally, solar incentives apply to new solar panel systems installed on property you own (in the U.S.) within a specified date range. Some incentives, like those given by the state of Alabama, may have other requirements.
How much will a solar system save me on my electric bill in Southside annually?
Generally, homeowners in Southside who install solar panels save about $1,110.80 per year, or about $21,105.18 over 20 years after making the switch.
Can I apply for incentives both towards the up-front cost of solar panels, and later as reimbursement?
The order that incentives will be applied in may vary depending on which incentives you receive but in most cases yes, you can claim multiple types of incentives for your solar project. Check with your solar installer or a local tax professional to be sure you are claiming all possible incentives and applying them in the correct order.
Can I use a combination of multiple types of renewable energy to power my home?
Yes, you can utilize multiple types of renewable energy to power your home — for example, a combination of geothermal and solar. You can also use both renewable energy sources and a non-renewable backup source of energy. Be sure to discuss your proposed plan with your local Southside solar panel installer, to get an understanding of what will be needed and what kinds of incentives 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.