2023 Solar Incentives Guide for Tuscaloosa, AL - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Tuscaloosa.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2023 and beyond)
- Ways to optimize your solar investment
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What Solar Tax Credits, Incentives, and Rebates are Available in Tuscaloosa?
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
Solar incentives are meant to help mitigate the cost of installing solar panels on your home. These financial incentives are in place to encourage more people to switch to renewable energy. Various types of incentives, like cash back, discounts or monthly utility bill credits, may be available to you. Certain incentives may be handled by the Alabama government, by your utility company or by county or municipality, while others are federal. Some broad categories of solar incentives include:
- Net Metering: You may be able to sign a net metering contract with your Tuscaloosa utility company that will apply to all or a percentage of the excess electricity that is generated by your solar panels. Your utility company will then subtract this value from your monthly utility bill.
- Rebates: A rebate is a partial refund credited to your account after you've paid for your solar system. Rebates may be offered by your local utility company, your county or your state. The discount that rebates offer is normally applied to the price of solar panels before calculating tax credits.
- Tax Credits: Unlike tax deductions, tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the government.
- Tax Exemptions: Tax exemptions may come in two forms. First, there is sales tax exemption, which is applied at the time you purchase your solar panels. The second is property tax exemption. This allows you to exclude the value added by your solar system when calculating property tax for your house.
Federal Solar Incentives
Federal incentives are the kind of incentives that you are most likely to have some familiarity with. The solar incentive that you're most familiar with is probably the Federal Solar Investment Tax Credit (ITC), which provides a credit on your taxes equal to a predetermined percentage of your solar system's cost.
The ITC can be applied to solar panels installed on your primary or secondary residence in the United States. The solar system must have been installed on a property you own after January 1, 2006 for you to claim the credit. The ITC initially covered 30% of all installation costs (panels, equipment, accessories and labor), 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.
Your local Tuscaloosa solar panel installation expert can offer more information about the ITC and how it applies to your situation.
In August 2022, the Inflation Reduction Act made revisions to the ITC, now called the Clean Energy Credit. The Clean Energy Credit bolsters the current credit, increasing it up to 30% for solar systems installed between 2022 and 2032. At this point, the percentage will see a slight decrease annually until the program expires in 2035. Starting in 2023, it will also be easier to get credits for energy storage systems with the new act.
More information about the new Inflation Reduction Act can be found here. Your local Tuscaloosa solar panel company is the best resource for answering your questions regarding the new Clean Energy Credit and how it applies to you.
State & Local Solar Incentives
There are often state solar incentives available in addition to federal ones. Rebates, tax credits and more can be offered at a more local level. Some incentives are offered for only a limited time, while others are ongoing. Your local solar incentives may come from the Alabama government, or from your specific county or municipality.
Next Steps for Installing Solar in Tuscaloosa
There are a number of different solar incentives: those offered by local utility companies, those offered by the federal government and those offered by the Alabama government, to name a few. Solar energy use has grown tremendously in the last 15 years, partially due to these incentives. Call your local solar panel installation company today to discover more about the various programs and to save as much money as possible on a solar system for your Tuscaloosa home.
EcoWatch's Tuscaloosa, AL Solar Incentives FAQs
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.