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
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 May 04, 2023
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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 encourage people to make the switch to renewable energy by providing incentives meant to lower the financial burden of solar panel installation and use. Various types of incentives, such as cash back, discounts or monthly utility bill credits, might be available to you. Some incentives may be offered by the Alabama government, by your utility company or by county or municipality, while other incentives are federal. You might qualify for any of the following types of solar incentives:
- Net Metering: Net metering becomes relevant once your solar panels are up and running. If you have a net metering agreement in place with your Tuscaloosa utility company, they will subtract the value of the excess energy your solar system produces from your utility bill each month. In some areas, this is a dollar-for-dollar credit, while in other areas you may be refunded a percentage of the value.
- Tax Credits: Different from tax deductions, tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the government.
- Tax Exemptions: Your solar panel system could qualify for exemptions on both sales and property tax. Sales tax exemptions come into effect at the time of purchase. Property tax exemptions allow you to exclude the value added by your solar panels when you are calculating property taxes on your home.
- Rebates: Rebates, or partial refunds after a purchase, are normally applied prior to any solar tax credits being calculated. These rebates may be provided by your local utility company, by your state or by your county.
Federal Solar Incentives
When someone says "solar incentives," you likely think of federal incentives first. The Federal Solar Investment Tax Credit, or ITC, is likely the most commonly known federal solar incentive. The ITC offers a tax credit for a set percentage of the cost of your solar system.
The ITC applies to solar systems installed after January 1, 2006 on a primary or secondary residence in the United States that you own. Originally, the tax credit was for 30% of the total cost — for panels, labor, accessories and equipment — although that amount may range from 26-30%, depending on when your solar system was installed. There is no cap on the amount you can claim.
To know exactly how much the ITC could save you, talk to your local Tuscaloosa solar panel installer.
In August 2022, the Inflation Reduction Act laid out new provisions for the ITC, now called the Clean Energy Credit. For solar systems installed between January 1, 2022 and December 31, 2032, homeowners may be eligible for a credit equal to 30% of the total cost. After 2033, the percentage will decrease annually until the Clean Energy Credit ends in 2035. Beginning in 2023, it will also be easier to claim credits for energy storage systems under this new program.
Click here to learn more about the new Inflation Reduction Act. Your local Tuscaloosa solar panel installation experts can answer any questions you have and explain how the new Clean Energy Credit applies to you.
State & Local Solar Incentives
Tax credits, rebates and more can be provided at multiple levels. In addition to federal solar incentives, there are often state and local ones as well. Certain incentives are ongoing, while others may only be available for a limited time. Incentives may be provided by the Alabama government, or by your county or municipality.
Next Steps for Installing Solar in Tuscaloosa
The expanding number of available solar incentives has enormously increased the adoption of solar energy nationwide over the last 15 years. You might qualify for solar incentives from the federal government, the Alabama government or from your local utility company. Reaching out to your local Tuscaloosa solar panel installation expert is a great first step towards getting all the incentives you qualify for when you switch to solar energy.
- Price-match guarantee
- Sleek, efficient, and durable solar panels
- Best solar battery on the market
- Some reported issues with customer service
- Customer service varies by local dealer
EcoWatch's Tuscaloosa, 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 located within the United States that you own; most secondary residences fall under this distinction. There may be other solar incentives available for commercial properties, depending on the details. We recommend getting in touch with 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 certain solar incentives?
It's best to speak with your local Tuscaloosa solar installer for a better understanding of which incentives your project will qualify for. Usually, 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, such as those provided at the level of the Alabama government, might have other requirements.
How much will a solar system save me on my electric bill in Tuscaloosa annually?
Typically, homeowners in Tuscaloosa who install solar panels save around $1,102.56 per year, or around $20,948.69 over 20 years after they make the switch.
Who installs solar panels near me?
To find a top-rated solar panel installer, check out our guide to Tuscaloosa's best solar panel companies.
Can I use a combination of multiple types of renewable energy to power my home?
Yes, you can use multiple types of renewable energy to power your home — for example, a combination of solar and wind power. You can also combine renewable energy generation with a non-renewable backup source of energy. You should discuss your plan with your local Tuscaloosa solar installation expert, to get an understanding of what will be needed and what incentives you may or may not 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.