2024 Solar Incentives Guide for Dothan, AL - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Dothan.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2024 and beyond)
- Ways to optimize your solar investment
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What Solar Tax Credits, Incentives, and Rebates are Available in Dothan?
Local Option- Property Tax Exemption for Renewable Energy Faclities
Alabama Power - Residential Heat Pump Loan Program
Wiregrass Electric Cooperative - H2O Plus Program
Federal Residential Renewable Energy Tax Credit
Source: https://www.dsireusa.org/
Solar incentives mitigate the cost of installing solar panels on your home. These financial incentives are intended to encourage more people to convert their home partially or fully to renewable energy. Incentives might include things like discounts, cash back or monthly utility bill credits. Some incentives are provided by the federal government, while others are provided by the Alabama government or your specific utility company, county or municipality. Some broad categories of solar incentives include:
- Tax Exemptions: Tax exemptions may come in two forms. The first is sales tax exemption, applied at the time you purchase your solar panels. The second is property tax exemption, which allows you to exclude the value added by your solar system when calculating property tax for your home.
- Rebates: A rebate is a partial refund credited to your account after you've paid for your solar panels. Rebates could be offered by your local utility company, your state or your county. The rebates are usually applied before tax credits are calculated.
- Net Metering: Net metering becomes relevant after your solar system is up and running. If you've signed a net metering agreement with your Dothan 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 others you may receive a refund equivalent to a percentage of the value.
- Tax Credits: Unlike tax deductions, tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the federal government.
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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 likely the best-known federal solar incentive. The ITC provides you with a tax credit for a predetermined percentage of your solar system's cost.
The ITC can be credited towards the value of solar panels installed on your primary or secondary residence in the United States. The solar panels have to 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 total amount has fluctuated over the 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 claim amount.
Curious how the ITC might apply to your specific situation? Reach out to your local Dothan solar panel installer to get more information.
In August 2022, the ITC (now referred to as the Clean Energy Credit) was bolstered by the passage of the Inflation Reduction Act. Now, solar installation projects started after January 1, 2022, and completed by the end of 2032, may be eligible for a 30% tax credit. The amount of the credit will then see a slight annual decrease until the end of the current Clean Energy Credit in 2035. Starting in 2023, the expansion will also make claiming credit for energy storage systems easier than ever before.
Click here to learn more about the new Inflation Reduction Act. The best way to understand how the new Clean Energy Credit will apply to you is to reach out to your local Dothan solar panel company with your questions.
State & Local Solar Incentives
There are more than just federal solar incentives; tax credits, rebates and more may be offered at the state and local level. Incentives may be given by the state of Alabama, or by your county or municipality. Some incentives are available for only a limited time, while others are ongoing.
Next Steps for Installing Solar in Dothan
The variety of available solar incentives has enormously increased the use of solar power nationwide over the last 15 years. You may receive solar incentives from your local utility company, the federal government or the Alabama government. Your local Dothan solar panel installation expert can help you learn more about which incentives you can apply for, and get you on track to switch to renewable energy today.
EcoWatch's Dothan, AL Solar Incentives FAQs
If my house already has solar panels, can I still claim incentives?
If your solar panels were installed after January 1, 2022, you may qualify for the recently increased 30% tax credit under the Inflation Reduction Act. If your system was installed between 2006 and 2021, you may qualify for a tax credit between 26% and 30%, depending on the exact installation date. Reaching out to the company that installed your solar system, or any local Dothan solar installer, can help you understand what incentives you qualify for.
How long until the federal solar tax credit ends?
The Clean Energy Credit (formerly called the federal solar tax credit, or the ITC), is slated to end on January 1, 2035. Currently set at 30%, the credit will drop to 26% in 2033 and to 22% in 2034.
If I switch my appliances out for ones that use solar energy, are there incentives that I can claim?
The recently passed Inflation Reduction Act includes provisions for multiple incentives designed to reward homeowners for making eco-friendly upgrades. Some incentives include rebates and tax credits for installing new electric appliances. You can find more details about these incentives here.
What if I add a solar system to a vacation home, rental property or commercial property? Will I still qualify for incentives?
Many solar incentives are intended to apply to a property you own that is located within the United States; most secondary residences fall under this distinction. Other solar incentives may be available for commercial properties, depending on the specifics. We recommend getting in touch with your local solar installer and/or tax professional to best understand what incentives may apply to your specific situation.
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.