2025 Solar Incentives Guide for Valley, AL - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Valley.
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.
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What Solar Tax Credits, Incentives, and Rebates are Available in Valley?
Local Option- Property Tax Exemption for Renewable Energy Faclities
Alabama Power - Residential Heat Pump Loan Program
Federal Residential Renewable Energy Tax Credit
Source: https://www.dsireusa.org/
Solar incentives are designed to encourage homeowners to switch to renewable energy by providing financial incentives that lower the burden of solar panel installation and use. Different kinds 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 others are federal. Categories of solar incentives include:
- Rebates: Solar rebates might be provided by your county or state, or by your local utility company. These rebates are essentially partial refunds that are applied after your purchase of a solar system and before tax credits are calculated.
- Net Metering: Net metering factors in once your solar panels are up and running. If you have a net metering agreement with your Valley 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 locations, this is a dollar-for-dollar credit, while in other areas you might get refunded a percentage of the value.
- Tax Exemptions: Your solar panels might qualify for both sales tax and property tax exemptions. Sales tax exemptions are applied 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 home.
- Tax Credits: Unlike tax deductions, tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the federal government.
Federal Solar Incentives
When people think of solar incentives, federal incentives might be the first thing that comes to mind. The Federal Solar Investment Tax Credit, or ITC, is probably the most commonly known federal solar incentive. The ITC allows you to claim a tax credit for a set percentage of your solar system's cost.
The ITC can be applied to solar systems installed after January 1, 2006, and under this program you can deduct from your taxes a percentage of the total cost of solar panels, equipment, accessories and labor. This credit can be claimed on a solar panel system installed on a primary or secondary residence that you own in the United States. The original claim amount was 30% of the total cost, although depending on when the project was completed, your credit may range from 26-30%. There is no maximum amount you can claim.
To best understand how the ITC may apply to your situation, speak to your local Valley solar panel installation expert and ask for more information.
The Inflation Reduction Act, passed in August 2022, made some changes to the ITC (as well as retitling it the Clean Energy Credit). The Clean Energy Credit has increased the current 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. Starting in 2023, the program expansion will also make it easier to get credit for energy storage systems.
Click here to learn more about the new Inflation Reduction Act. To better understand how the new Clean Energy Credit might apply to you, get in touch with your local Valley solar installation expert.
State & Local Solar Incentives
There are more than just federal solar incentives; tax credits, rebates and more are often offered at the state and local level. Some incentives are offered for only a limited time, while others are ongoing. Local solar incentives could come from your county or municipality, or from the Alabama government.
Next Steps for Installing Solar in Valley
The nationwide use of solar energy has increased enormously in the past 15 years, in part thanks to the proliferation of solar incentives. You may get these incentives from your local utility company, the Alabama government or the federal government. Talking to your local Valley solar panel installation expert is an excellent first step towards getting the most money possible when you switch to solar energy.
EcoWatch's Valley, AL Solar Incentives FAQs
How do I learn if I qualify for solar incentives?
Broadly, solar incentives apply to:
- a new solar panel system
- installed on property you own
- within the U.S.
- between the dates specified by a particular incentive.
Specific incentives, including those run by the Alabama government or by your county/municipality, could have additional qualifications. Talk to your local Valley solar installer to find out what incentives your project may qualify for.
How much can I save on my electric bill annually if I install solar panels on my house in Valley?
Typically, Valley homeowners who install solar panels save about $1,110.03 per year, or about $21,090.65 over 20 years after they make the switch.
How long until the federal solar tax credit ends?
The Clean Energy Credit (formerly called the federal solar tax credit, or the ITC), currently ends on January 1, 2035. Currently set at 30%, the credit will drop to 26% in 2033 and to 22% in 2034.
Can I qualify for incentives both towards the initial cost of solar panels, and later as reimbursement?
Yes, you can receive both rebates and tax credits towards the cost of solar panels. Depending on precisely which incentives you are claiming, they may apply in a different order. Make sure that you speak with your solar installer or a local tax professional to ensure that you are claiming incentives correctly and that you're getting the most money possible.
Can I use both solar and another type of renewable energy to power my home?
You can power your home with multiple types of renewable energy, or a combination of renewable and non-renewable energy. Be sure to go over your ideas with your local Valley solar installer. They can help you with the plan for your project and educate you on the various incentives that 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.