2024 Solar Incentives Guide for Mobile, AL - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Mobile.
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 Mobile?
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" covers a wide range of financial incentives designed to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. The incentives may include cash back, upfront discounts or credit towards your monthly utility bill. Some incentives are provided by the federal government, some by the state of Alabama and some by your specific utility company, county or municipality. You might qualify for any of the following types of solar incentives:
- Tax Exemptions: Sales tax exemptions are effective at the point of sale for your solar system. Property tax exemptions let you exclude the value that your solar panels add when you calculate the amount of property tax you need to pay.
- Tax Credits: These credits are dollar-for-dollar reductions (not deductions) in how much income tax you owe the federal government.
- Net Metering: Net metering is an incentive you can get after your solar system is up and running. If you've signed a net metering agreement with your Mobile utility company, the company will subtract the value of the excess energy your solar system produces from your utility bill each month. In some places, this credit is dollar-for-dollar, while in others you may receive a refund equivalent to a percentage of the value.
- Rebates: A rebate is a partial refund given after you've purchased your solar system. Rebates may be offered by your local utility company, your state or your county. The discount that rebates offer is normally applied to the price of solar panels before calculating tax credits.
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Federal Solar Incentives
When someone says "solar incentives," you probably 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 gives you a credit on your taxes equal to a percentage of the cost of your solar system.
The ITC applies towards solar systems installed after January 1, 2006, and allows you to deduct from your taxes a percentage of the total cost of solar panels, labor, equipment and accessories. You can claim this credit for a solar panel system installed on a primary or secondary residence in the United States that you own. Originally, you could claim 30% of the total cost, although the amount you can claim may range between 26-30%. There is no maximum claim amount.
Reaching out to your local Mobile solar panel installer is the best way to understand how the ITC may apply to your situation.
The Inflation Reduction Act, passed in August 2022, expanded and extended the ITC (as well as renaming it to the Clean Energy Credit). The Clean Energy Credit bolsters the current credit, increasing it up to 30% for solar installation projects started after January 1, 2022, and completed by the end of 2032. At this point, the credit percentage will be reduced slightly each year until the program expires in 2035. The expansion to the program also makes credits for energy storage systems even easier to claim, beginning in 2023.
Click here to learn more about the new Inflation Reduction Act. To understand how the new Clean Energy Credit might apply to you, reach out to your local Mobile solar installation company.
State & Local Solar Incentives
Not all solar incentives are federal; tax credits, rebates and more are often offered at the state and local level. Some incentives are ongoing, while others may only be available for a limited time. Solar incentives may be provided by the Alabama government, or by your county or municipality.
Next Steps for Installing Solar in Mobile
You can receive solar incentives from the Alabama government and the federal government, as well as from your local utility company. Growing availability of solar initiatives over the last 15 years has helped increase nationwide solar energy use enormously. If you're prepared to make the switch to solar energy, reaching out to your local Mobile solar panel installation expert is an excellent place to start.
EcoWatch's Mobile, AL Solar Incentives FAQs
How do I know if I qualify for certain solar incentives?
It's a smart idea to get in touch with your local Mobile solar installer for a better understanding of which incentives your project will qualify for. Generally, 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 given by the state of Alabama, may have other requirements.
What are the top solar panel installation companies near me?
To find the best solar panel installation companies near you, read our article on Mobile's best solar panel companies.
What are some environmental benefits of adding solar panels to my home?
You can lower your carbon footprint by 450 pounds of CO2 a year when you install solar panels. This adds up to approximately 9,000 pounds in 20 years. Solar is also a renewable energy source, meaning that switching your home over reduces the drain on our planet's resources.
When does the federal solar tax credit end?
The federal solar tax credit, previously called the ITC and now titled 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.
Can I apply for incentives both towards the initial cost of solar panels, and later as reimbursement?
The order your incentives will be applied in could vary depending on which incentives you are eligible for but generally yes, you can receive multiple types of incentives for your solar project. Get in touch with your solar installer or a local tax professional to ensure you are claiming all the incentives you qualify 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.