2024 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 2024 and beyond)
  • Ways to optimize your solar investment

Solar installers are experts in maximizing your solar tax credits and rebates.
Get a free quote from one of our trusted Tuscaloosa solar installers to see how much you can save.

By EcoWatch Local Advisors

Data Analysis: James Savino

Ranking Methodology: Karsten Neumeister

Updated February 03, 2024

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We work with a panel of solar experts to create unbiased reviews that empower you to make the right choice for your home. No other site has covered renewables as long as us, which means we have more data and insider information than other sites. Our rankings are never affected by revenue or partnerships.

What Solar Tax Credits, Incentives, and Rebates are Available in Tuscaloosa?

Wood-Burning Heating System Deduction

Incentive Type:
Personal Tax Deduction

Local Option- Property Tax Exemption for Renewable Energy Faclities

Incentive Type:
Property Tax Incentive

Alabama Power - Residential Heat Pump Loan Program

Incentive Type:
Loan Program
Varies, up to 100% of project cost for qualifying customers

Federal Residential Renewable Energy Tax Credit

Incentive Type:
Personal Tax Credit
30% federal tax credit for systems placed in service after 12/31/2021 and before 01/01/2033. Good for: solar water heat, solar photovoltaics, biomass, geothermal heat pumps, wind (small), fuel cells using renewable fuels.

Source: https://www.dsireusa.org/


Solar incentives are intended to make renewable energy usage more affordable via financial incentives to help people install solar panels on their homes. You might be eligible 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 Alabama government and others from the federal government. Some solar incentives you might qualify for are:

  • Net Metering: Net metering becomes relevant once your solar system is up and running. If you have a net metering agreement with your Tuscaloosa utility company, the company will subtract the value of the excess energy produced by your solar system from your utility bill each month. In some places, this is a dollar-for-dollar credit, while in other areas you may make back a percentage of the value.
  • Tax Exemptions: Your solar panels could qualify for exemptions on both sales and property tax. Sales tax exemptions are effective at the time of purchase. Property tax exemptions let you ignore the added value of the solar panels when you are calculating property taxes on your house.
  • Rebates: Rebates, or cash back after a purchase, are normally applied prior to any solar tax credits being calculated. These rebates may be given by your local utility company, by your state or by your county.
  • 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.)

Best National Provider

SunPower

★★★★★
5.0

  • Most efficient panels on the market
  • National coverage
  • Cradle to Cradle sustainability certification
  • Great warranty coverage
  • Expensive
  • Customer service varies by local dealer

Best Technology

Tesla Energy

★★★★★
3.2

  • 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

Federal Solar Incentives

Federal solar incentives are likely to be the first thing that comes to mind when thinking about solar incentives. 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 specified percentage of your solar system's cost.

The ITC can be credited towards the value of a solar system 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 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 over the last few years 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 ITC (now referred to as the Clean Energy Credit) was bolstered by the passing of the Inflation Reduction Act. The Clean Energy Credit lasts until 2035. Your solar installation project undertaken between 2022 and 2032 may qualify for a 30% tax credit. This amount will then decrease slightly on a yearly basis until the current program ends. The program expansion also makes claiming credit for energy storage systems easier than ever before, starting in 2023.

More information about the new Inflation Reduction Act can be found here. To understand how the new Clean Energy Credit might apply to you, speak with your local Tuscaloosa solar installation company.

State & Local Solar Incentives

Some solar incentives are often also provided at the state and local level. Like with federal incentives, these might include rebates, tax credits and more. Certain incentives are ongoing, while others are only available for a limited time. Solar incentives may be offered by your county or municipality, or by the Alabama government.

Next Steps for Installing Solar in Tuscaloosa

The nationwide use of solar energy has increased enormously in the last 15 years, in part thanks to the proliferation of solar incentives. You can obtain these incentives from your local utility company, the federal government or the Alabama government. Your local Tuscaloosa solar panel installation expert can provide you with more details about which incentives you may qualify for, and get you on track to switch to renewable energy today.

EcoWatch's Tuscaloosa, AL Solar Incentives FAQs

How can I find out if I qualify for different solar incentives?

Broadly, solar incentives apply to:

  1. a new solar system
  2. installed on a property that you own
  3. within the U.S.
  4. within the date range specified by a particular incentive.

Specific incentives, including those given out by the Alabama government or by your county/municipality, could have additional qualifications. Talk to your local Tuscaloosa solar installer to discover what incentives your project will qualify for.

How much can I save on my electric bill annually if I add solar panels to my house in Tuscaloosa?

On average, homeowners in Tuscaloosa who install solar panels save about $1,102.56 per year, or around $20,948.69 over 20 years after they make the switch.

What are the best solar panel installation companies near me?

To discover the best solar panel installation companies near you, read our article on the top solar companies in Tuscaloosa.

What are some of the environmental benefits of switching to solar energy?

Solar energy is renewable — by switching where you get your energy, you help lessen the strain on our planet's resources. A solar system can also lower your home's CO2 emissions by 450 pounds annually, or around 9,000 pounds over 20 years.

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.

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