2024 Solar Incentives Guide for Troy, AL - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Troy.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2024 and beyond)
- Ways to optimize your solar investment
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What Solar Tax Credits, Incentives, and Rebates are Available in Troy?
Local Option- Property Tax Exemption for Renewable Energy Faclities
Alabama Power - Residential Heat Pump Loan Program
Dixie Electric Cooperative - Residential Energy Efficiency Rebate Program
South Alabama Electric Cooperative - Residential Energy Efficiency Loan Program
Federal Residential Renewable Energy Tax Credit
Source: https://www.dsireusa.org/
The term "solar incentives" refers broadly to financial incentives implemented by the government and by solar companies to encourage increased use of renewable energy by making solar panels more affordable. These incentives might include cash back, upfront discounts or monthly credits towards your utility bill. Some incentives are handled 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 are applied at the point of sale for your solar panels. Property tax exemptions let you ignore the added value of your solar system when you calculate the amount of property tax you need to pay on your house.
- Net Metering: You may be able to sign a net metering contract with your Troy utility company, that may apply to all or a percentage of the excess electricity that is generated by your solar panels. Your utility company will then deduct this value from your utility bill each month.
- Tax Credits: Tax credits are dollar-for-dollar reductions (not deductions) in the amount of tax that you owe the federal government.
- Rebates: Rebates, or cash back after a purchase, are normally applied prior to any solar tax credits being calculated. Rebates can be given by your local utility company, by your state or by your county.
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Federal Solar Incentives
Federal incentives are the type of incentives that you are most likely to have some familiarity with. The Federal Solar Investment Tax Credit, or ITC, is the most commonly known federal solar incentive. The ITC offers a tax credit for a specific percentage of your solar system's cost.
The ITC covers solar systems installed after January 1, 2006, and allows you to deduct from your taxes a percentage of the total cost of solar panels, equipment, labor and accessories. You can claim this credit for a solar panel system installed on a primary or secondary residence in the United States that you own. Originally, you could claim 30% of the total cost, although the amount you can claim may range between 26-30%. There is no maximum amount you can claim.
To better understand how the ITC may apply to you, reach out to your local Troy solar panel installer and request more information.
In August 2022, the Inflation Reduction Act laid out new provisions for the ITC, now referred to as the Clean Energy Credit. For solar system installations that begin after January 1, 2022, and are completed by the end of 2032, homeowners can receive a credit for 30% of the total cost. After 2033, the percentage will decrease annually until the Clean Energy Credit expires in 2035. Starting in 2023, the expansion to the program will also make claiming credit for energy storage systems easier than ever before.
Click here to learn more about the new Inflation Reduction Act. To better understand how the new Clean Energy Credit applies to you, get in touch with your local Troy solar installation company.
State & Local Solar Incentives
Not all solar incentives are federal; tax credits, rebates and more may be offered at the local or state level. Incentives might be given by your county or municipality, or by the state of Alabama. Some incentives may be available for only a limited time, while others are ongoing.
Next Steps for Installing Solar in Troy
There are many kinds of solar incentives: those offered by local utility companies, those given by the federal government and those provided by the Alabama government, to name a few. Solar energy utilization has grown tremendously in the last 15 years, partially due to these incentives. Reaching out to your local Troy solar panel installation expert is an excellent first step towards making sure you get all the incentives you qualify for when you switch to solar energy.
EcoWatch's Troy, AL Solar Incentives FAQs
What are the top solar panel installation companies near me?
To find a top-rated solar panel installer, check out our guide to the best solar companies in Troy.
How long until the federal solar tax credit ends?
The federal solar tax credit, formerly known as the ITC and now called the Clean Energy Credit, is scheduled to end on January 1, 2035. The current 30% credit will end in 2032, replaced by a 26% credit in 2033 and a 22% credit in 2034.
I want to switch my appliances out for ones that are more energy-efficient. Are there any incentives I can get?
The new Inflation Reduction Act includes provisions for a number of incentives that reward homeowners who make eco-friendly upgrades. Some incentives include tax credits and rebates for installing new electric appliances. You can find more details about these incentives here.
Can I apply for incentives both towards the initial cost of solar panels, and later as reimbursement?
Yes, you can receive both tax credits and rebates towards the cost of solar panels. Depending on which incentives you are eligible for, they may apply in a different order. Be sure to speak with your solar installer or a local tax professional to verify that you are claiming incentives correctly and getting the most money possible.
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.