2023 Solar Incentives Guide for Vestavia Hills, AL - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Vestavia Hills.
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 May 04, 2023
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What Solar Tax Credits, Incentives, and Rebates are Available in Vestavia Hills?
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/
The term "solar incentives" broadly refers to financial incentives put in place by solar companies and the government to encourage the use of renewable energy by making solar panels more affordable. You may be eligible for several types of incentives, such as cash back, discounts or monthly utility bill credits, depending on your situation. Some incentives come from your specific utility company, county or municipality, some from the Alabama government and others from the federal government. Some broad categories of solar incentives include:
- Rebates: Solar rebates might be offered by your local utility company, or by your county or state. These rebates work as partial refunds that are applied after you pay for a solar system and before tax credits are calculated.
- Tax Credits: Tax credits are dollar-for-dollar reductions (not deductions) in how much income tax you owe the federal government.
- Tax Exemptions: Sales tax exemptions are effective at the time of purchase for your solar system. Property tax exemptions let you ignore the added value of your solar system when you calculate the amount of property tax you need to pay on your home.
- Net Metering: Net metering factors in after your solar panels are up and running. If you have a net metering agreement with your Vestavia Hills utility company, they will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some places, this credit is dollar-for-dollar, while in other areas you might make back a percentage of the value.
Federal Solar Incentives
When you think about solar incentives, you likely think of federal incentives first. The solar incentive that you're most likely to have heard of is the Federal Solar Investment Tax Credit (ITC), which provides a credit on your taxes equal to a predetermined percentage of the cost of your solar system.
The ITC covers solar systems installed after January 1, 2006 and lets you deduct from your taxes a percentage of the total cost of solar panels, labor, accessories and equipment. You can claim this credit for solar panels installed on a primary or secondary residence that you own in the United States. Originally, you could claim 30% of the total cost, although depending on when the project was completed, your credit may range from 26-30%. There is no maximum claim amount.
Speaking with your local Vestavia Hills solar panel installer is the best way to learn more about how the ITC may apply to you.
The ITC was both renewed and expanded by the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. Now, solar installation projects begun after January 1, 2022 and finished by December 31, 2032 might qualify for a 30% tax credit. This credit amount will then decrease slightly each year until the end of the current Clean Energy Credit in 2035. Starting in 2023, the expansion to the program will also make it easier to get credit for energy storage systems.
More information about the new Inflation Reduction Act can be found here. Your local Vestavia Hills 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
Rebates, tax credits and more can be claimed at multiple levels. On top of federal solar incentives, there are often state and local ones, too. Some incentives are ongoing, while others are only available for a limited time. They may be provided by the Alabama government, or by your county or municipality.
Next Steps for Installing Solar in Vestavia Hills
Nationwide solar energy use has increased enormously in the past 15 years, in part thanks to the proliferation of solar incentives. You may get these incentives from the federal government, the Alabama government or your local utility company. Your local Vestavia Hills solar panel installer can provide you with more details about which incentives you can apply for, and get you started on the path to switching to renewable energy today.
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EcoWatch's Vestavia Hills, AL Solar Incentives FAQs
What if I want to add a solar system to a rental property, vacation home or commercial property? Do I still qualify for incentives?
While we recommend getting in touch with your local solar installer and/or tax professional to better understand what solar incentives apply to you, many incentives can be claimed on a second home, so long as that home is in the United States and owned by you. There may be additional incentives available for commercial properties specifically, depending on the details.
How do I know if I qualify for different solar incentives?
It's best to speak with your local Vestavia Hills solar installer to get an understanding of which incentives your project may qualify for. In most cases, 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, may have other requirements.
If I installed solar panels on my house a few years ago, can I still claim incentives?
If your solar panels were 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 may qualify for a tax credit between 26% and 30%, depending on the exact installation date. Talking to the company that installed your solar system, or any local Vestavia Hills solar installer, can help you learn more about what incentives you might want to apply for.
What are the environmental benefits of switching to solar energy?
You can decrease your carbon footprint by 450 pounds of CO2 annually when you switch to solar panels. This adds up to around 9,000 pounds in 20 years. In addition, solar power is a renewable energy source, which means that switching your home over lessens the drain on our planet's resources.
Can I qualify for incentives both towards the up-front cost of solar panels, and later as reimbursement?
The order that incentives will be applied in may vary depending on which incentives you receive but in most cases yes, you can receive multiple types of incentives for your solar project. Speak to your solar installer or a local tax professional to make sure you are claiming all the incentives you are eligible for 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.