2023 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 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 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 mitigate the cost of installing a solar panel system on your home. These financial incentives are intended to encourage more homeowners to make the switch to renewable energy. Incentives may include things like discounts, cash back or credit towards your monthly utility bill. Some incentives are handled federally, while others are offered by the state of Alabama or your utility company, county or municipality. You might qualify for any of the following types of solar incentives:
- Tax Exemptions: Your solar panels may qualify for exemptions on both sales and property tax. Sales tax exemptions are effective at the time of purchase. Property tax exemptions let you exclude the added value of the solar panels when you are calculating property taxes on your home.
- Net Metering: Make sure you speak with your Valley utility company about signing a net metering agreement. This will allow you to receive credit towards your monthly utility bill for the value of excess energy generated by your solar panels. You could receive either a dollar-for-dollar credit or a percentage of the value.
- Rebates: Solar companies may help you claim a rebate, or partial refund of your purchase, for your solar system. Counties or states will also sometimes offer limited-time rebates. Any rebates you receive will usually come off the total price before any tax credits are calculated.
- Tax Credits: These credits are dollar-for-dollar reductions (not deductions) in the amount of tax that you owe the government.
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Federal Solar Incentives
Federal solar incentives are probably the first thing that comes to mind when you think about solar incentives. A federal incentive many people are probably familiar with is the Federal Solar Investment Tax Credit (ITC). The ITC is a tax credit for a predetermined percentage of the cost of your solar system.
The ITC is applied to the total cost of solar system installation, including the panels themselves as well as equipment, accessories and labor. This credit can be claimed for panels installed after January 1, 2006 on a primary or secondary residence that you own and that is located in the United States. The tax credit ranges from 26-30% of total costs depending on when your project was completed. There is no maximum amount you can claim.
Have questions about how the ITC applies to your specific situation? Get in touch with your local Valley solar panel installation expert to get more information.
In August 2022, the Inflation Reduction Act made revisions to the ITC, now dubbed the Clean Energy Credit. The Clean Energy Credit re-raises the credit up to 30% for solar installation projects started after January 1, 2022 and completed by the end of 2032. At this point, the percentage will see a slight decrease annually until the end of the program 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. To best understand how the new Clean Energy Credit might apply to you, reach out to your local Valley solar installers.
State & Local Solar Incentives
Federal solar incentives are not your only option; tax credits, rebates and more may be offered at the local or state level. These incentives may be given out by the Alabama government, or by your county or municipality. Some are available for a limited time, while others are ongoing.
Next Steps for Installing Solar in Valley
Solar incentives can be provided by your local utility company, the federal government or the Alabama government. The growing number of available incentives has helped nationwide use of solar energy increase greatly in the last 15 years. Your local Valley solar panel installer can help you learn more about which incentives you might qualify for, and get you on track to switch to renewable energy today.
EcoWatch's Valley, AL Solar Incentives FAQs
How can I find out if I qualify for certain solar incentives?
Generally, solar incentives apply to:
- a new solar panel system
- installed on a property that 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, may have additional qualifications. Talk to your local Valley solar installer to find out what incentives your project may qualify for.
I already have solar panels. Does my system qualify for any incentives?
If your solar system was installed after January 1, 2022, you may qualify for the newly increased 30% tax credit under the Inflation Reduction Act. If you installed your system between 2006 and 2021, you might qualify for a tax credit between 26% and 30%, depending on the date of installation. Speaking with a representative from the company that installed your solar system, or any local Valley solar installer, can help you learn what incentives you can apply for.
Who installs solar panels near me?
To discover the top solar panel installers near you, take a look at our article on Valley's top solar panel companies.
What are the environmental benefits of switching to solar?
Solar energy is a renewable energy source — by switching where you get your energy, you help reduce the strain on our planet's resources. A solar system can also lower your home's CO2 emissions by 450 pounds a year, or around 9,000 pounds over 20 years.
Can I qualify for incentives both towards the up-front cost of solar panels, and later as reimbursement?
The order your incentives will be applied in may vary depending on which incentives you are eligible for but typically yes, you can receive multiple types of incentives for your solar project. Talk with your solar installer or a local tax professional to verify you are claiming all possible incentives and applying them in the correct order.
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.