2023 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 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 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 people to use renewable energy by making solar panels more affordable. You might qualify for different kinds of incentives, including discounts, cash back or credit towards your monthly utility bill, depending on your situation. Certain incentives come from your specific utility company, county or municipality, some from the state of Alabama and others from the federal government. Some solar incentives you might qualify for are:
- Tax Exemptions: These can come in the form of property tax exemptions, which would allow you to ignore the value added by your solar panels when paying taxes on your house. You may also qualify for an exemption on sales tax at the time of purchase.
- Tax Credits: Tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the government. (A tax credit is different from a tax deduction.)
- Rebates: Your solar installer might help you claim a rebate, or partial refund after purchase, for your solar panels. States or counties will also offer limited-time rebates at various times. The value of a rebate will usually be deducted from your total price before tax credits are calculated.
- Net Metering: Net metering factors in after your solar system is up and running. If you've signed a net metering agreement with your Troy utility company, it will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some areas, this credit is dollar-for-dollar, while in other areas you might receive a refund equivalent to a percentage of the value.
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Federal Solar Incentives
Federal incentives are the type of incentives that you are most likely to have some knowledge of. A federal incentive that most people are probably familiar with is the Federal Solar Investment Tax Credit (ITC). This is a tax credit for a specific percentage of the cost of your solar system.
The ITC initially applied to 30% of the total cost of installing solar panels, although that number has fluctuated slightly over the last few years between 26-30%. The percentage you qualify for will depend on when your solar system was installed. The total installation cost includes the panels themselves as well as the cost of accessories, equipment and labor. There is no maximum claim amount. The ITC applies to solar systems installed after January 1, 2006 on your primary or secondary residence. The residence must be owned by you and in the United States.
To know exactly how much money the ITC could save you, contact your local Troy solar panel installer.
In August 2022, the ITC (now titled the Clean Energy Credit) was bolstered by the passage of the Inflation Reduction Act. The Clean Energy Credit re-raises the credit up to 30% for solar systems installed between 2022 and 2032. At this point, the credit percentage will see a slight decrease annually until the program expires in 2035. Beginning in 2023, it will also be easier to obtain credits for energy storage systems under this new program.
Click here to learn more about the new Inflation Reduction Act. The best way to understand how the new Clean Energy Credit applies to you is to talk with your local Troy solar panel company.
State & Local Solar Incentives
Tax credits, rebates and more might be claimed at multiple levels. Along with federal solar incentives, there are often state and local ones, too. Some incentives are ongoing, while others might only be available for a limited time. Incentives may be provided by your county or municipality, or by the Alabama government.
Next Steps for Installing Solar in Troy
Solar incentives might be provided by the federal government, the Alabama government or your local utility company. The large number of incentives available has helped nationwide use of solar energy increase greatly in the last 15 years. Reach out to your local solar panel installation expert today to learn more and to save the most money possible on solar panels for your Troy home.
EcoWatch's Troy, AL Solar Incentives FAQs
How can I learn if I qualify for solar incentives?
It's a good idea to talk to your local Troy solar installer for a better understanding of which incentives your project may qualify for. Typically, solar incentives apply to new solar systems installed on property you own (in the U.S.) between the dates specified by the incentive. Some incentives, like those given by the state of Alabama, might have additional requirements.
How much will a solar system save me annually on my electric bill in Troy?
On average, Troy homeowners who install solar panels save about $1,041.07 per year, or about $19,780.37 over 20 years after making the switch.
Who installs solar panels near me?
To find a top-rated solar panel installer, check out our guide to Troy's best solar panel companies.
What are some environmental benefits of installing solar panels on my home?
You can lower your carbon footprint by 450 pounds of CO2 a year when you install solar panels. This adds up to approximately 9,000 pounds over 20 years. Solar is also a renewable energy source, which means that switching your home over lessens the drain on our planet's resources.
Can I use a combination of solar and another type of renewable energy to power my home?
Yes, you can employ multiple types of renewable energy to power your home — for example, a combination of wind and solar. You can also combine renewable energy generation with a non-renewable backup source of energy. Be sure to discuss your proposed plan with your local Troy solar panel installer, to make sure you know what you'll need and what 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.