2024 Solar Incentives Guide for Northport, AL - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Northport.
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 Northport?
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 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. You might be eligible for various types of incentives, including discounts, cash back or credit towards your monthly utility bill, depending on your situation. Certain incentives come from your specific utility company, county or municipality, some from the state of Alabama and others from the federal government. You might qualify for any of the following types of solar incentives:
- Tax Exemptions: Your solar system may qualify for exemptions on both sales and property tax. Sales tax exemptions are effective at the time of purchase. Property tax exemptions allow you to ignore the added value of the solar panels when calculating property taxes on your house.
- Net Metering: Net metering is an incentive you can get once your solar panels are up and running. If you have a net metering agreement with your Northport utility company, it 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 others you may receive a refund equivalent to a percentage of the value.
- Rebates: Solar rebates may be provided by your local utility company, or by your county or state. These rebates work as partial refunds that are applied after your purchase of solar panels and before tax credits are calculated.
- Tax Credits: Tax credits decrease, dollar-for-dollar, the amount of income tax you owe the federal government. Tax credits are different from tax deductions.
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Federal Solar Incentives
Federal solar incentives are likely to be the first thing that comes to mind when you think about solar incentives. You might have heard of the Federal Solar Investment Tax Credit, or ITC. The ITC is a tax credit equal to a predetermined percentage of the money you spend installing solar panels.
The ITC can be applied to solar systems installed after January 1, 2006, and under this program you can deduct from your taxes a percentage of the total cost of solar panels, labor, equipment and accessories. You can receive 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.
Wondering how the ITC applies to your specific situation? Contact your local Northport solar panel installer to get more information.
In August 2022, the Inflation Reduction Act expanded and extended the ITC, now referred to as the Clean Energy Credit. The Clean Energy Credit runs until 2035. Your solar installation project undertaken between 2022 and 2032 may qualify for a 30% tax credit. The amount will be decreased slightly each year until the end of the current program. Starting in 2023, the expansion 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 Northport solar panel installation expert is the best person to answer your questions regarding the new Clean Energy Credit and how it will apply to you.
State & Local Solar Incentives
Not all solar incentives are federal; rebates, tax credits and more are often offered at the local or state level. These solar incentives — which might be provided by the state of Alabama, or by your county or municipality — could be offered for only a limited time, or on an ongoing basis.
Next Steps for Installing Solar in Northport
There are many types of solar incentives: those offered by local utility companies, those offered by the Alabama government and those offered by the federal government, to name a few. The use of solar energy has grown tremendously in the last 15 years, partially due to these incentives. We recommend talking to your local Northport solar installer to learn more about these incentives and to be sure that you're getting the largest number possible for your solar panels.
EcoWatch's Northport, AL Solar Incentives FAQs
How much will a solar system save me annually on my electric bill in Northport?
When you add solar panels to your house in Northport, you can expect to save around $1,143.70 per year, or about $21,730.32 over 20 years.
What are some of the environmental benefits of switching to solar?
Solar energy is renewable — by changing where you get your energy, you help reduce the strain on our planet's resources. Solar panels can also reduce the CO2 emissions from your home by 450 pounds a year, or roughly 9,000 pounds over 20 years.
How long until the federal solar tax credit ends?
The federal solar tax credit, formerly known as the ITC and now titled the Clean Energy Credit, is set to end on 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 receive incentives both towards the up-front cost of solar panels, and later as reimbursement?
The order in which incentives are applied might vary depending on which incentives you are eligible for but generally yes, you can claim multiple types of incentives for your solar project. Check with your solar installer or a local tax professional to ensure you are claiming all the incentives you're 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.