2024 Solar Incentives Guide for Homewood, AL - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Homewood.
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 Homewood?
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 switch their home over to renewable energy. Incentives can include things like discounts, cash back or credit on your utility bill each month. Some incentives are offered by the federal government, while others are handled by the Alabama government or by your utility company, county or municipality. Categories of solar incentives include:
- Net Metering: Be sure to speak to your Homewood utility company about signing a net metering contract. This will allow you to get a credit towards your monthly utility bill for the value of excess energy your solar panels generate. You may receive either a dollar-for-dollar credit or a percentage of the value.
- Tax Exemptions: Your solar panel system could qualify for exemptions on both sales and property tax. Sales tax exemptions are applied at the time of purchase. Property tax exemptions allow you to exclude the added value of the solar panels when calculating property taxes on your home.
- Tax Credits: Tax credits reduce, dollar-for-dollar, the total amount of tax you owe the federal government. These are different from tax deductions.
- Rebates: A rebate is a partial refund credited to your account after you've paid for your solar system. These could be offered by your local utility company, your county or your state. The cash back that you get from the rebates is normally applied before calculating tax credits.
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Federal Solar Incentives
Federal incentives are the kind of incentives that you are most likely to have some familiarity with. The Federal Solar Investment Tax Credit, or ITC, is the most well-known federal solar incentive. The ITC provides you with a tax credit for a set percentage of your solar system's cost.
The ITC applies to the total cost of solar panel 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. From its original value of 30% of the total cost, the credit has fluctuated slightly between 26-30%, and you may qualify for varying percentages depending on when your project was completed. There is no maximum amount you can claim.
Your local Homewood solar panel installation expert can provide more information about the ITC and how it may apply to your situation.
In August 2022, the ITC (now referred to as the Clean Energy Credit) was expanded and extended by the passing of the Inflation Reduction Act. The Clean Energy Credit runs until 2035. Solar installation projects started after January 1, 2022, and completed by the end of 2032 may qualify for a 30% tax credit. The amount will decrease slightly each year until the current program ends. The expansion also makes credits for energy storage systems even easier to claim, starting in 2023.
More information about the new Inflation Reduction Act can be found here. To fully understand how the new Clean Energy Credit applies to you, speak with your local Homewood solar installation company.
State & Local Solar Incentives
Not all solar incentives are federal; tax credits, rebates and more might also be offered at the state and local level. Some incentives are ongoing, while others are offered for only a limited time. Local solar incentives could come from the Alabama government, or from your specific county or municipality.
Next Steps for Installing Solar in Homewood
Nationwide solar energy use has significantly increased in the last 15 years, in part due to the growth in the number of solar incentives. You may get these incentives from the federal government, the Alabama government or your local utility company. Your local Homewood solar panel installation company can help you learn more about which incentives you should apply for, and get you feeling good about making the change to renewable energy today.
EcoWatch's Homewood, AL Solar Incentives FAQs
How can I learn if I qualify for different solar incentives?
It's a good idea to talk to your local Homewood solar installer for a better understanding of which incentives your project may qualify for. Typically, solar incentives apply to new solar systems installed on a 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.
Who installs solar panels near me?
To discover the best solar panel installation companies near you, take a look at our article on Homewood's best solar panel companies.
How long until the federal solar tax credit ends?
The federal solar tax credit, previously called the ITC and now called the Clean Energy Credit, is scheduled to end January 1, 2035. The current 30% credit will end in 2032, replaced by a 26% credit in 2033 and a 22% credit in 2034.
If I trade in my appliances for ones that utilize solar energy, are there incentives I can claim?
Under the new Inflation Reduction Act, there are several new financial incentives that are available when you make eco-friendly improvements to your home. More details regarding these incentives, including information about incentives for purchasing new appliances, can be found here.
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.