2024 Solar Incentives Guide for Prattville, AL - Tax Credits & Rebates

What Solar Tax Credits, Incentives, and Rebates are Available in Prattville?

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Solar incentives help mitigate the cost of installing solar panels on your home. Financial incentives like these are intended to encourage more homeowners to switch their home over to renewable energy. You might be eligible for various types of incentives, such as cash back, discounts or credit towards your monthly utility bill, depending on your situation. Some incentives come from your specific utility company, county or municipality, some from the state of Alabama and others from the federal government. Categories of solar incentives include:

• Rebates: A solar rebate is a partial refund credited to your account after you've paid for your solar panels. Rebates might be offered by your local utility company, your state or your county. The cash back that you get from the rebates is normally applied before calculating tax credits.
• Tax Credits: These credits are dollar-for-dollar reductions (not deductions) in how much in taxes you owe the federal government.
• Tax Exemptions: Tax exemptions can come in one of two forms. First, there is sales tax exemption, which is applied at the time you purchase your solar panels. The second is property tax exemption, which allows you to ignore the value added by your solar system when calculating property tax for your house.
• Net Metering: You can sign a net metering agreement with your Prattville utility company, that may apply to all or a percentage of the excess electricity that is generated by your solar panels. Your utility company will then deduct this value from your utility bill each month.

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Federal Solar Incentives

When thinking about 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 certain percentage of your solar system's cost.

The ITC applies to the total cost of installing a solar system, including the panels themselves as well as accessories, equipment and labor. This credit can be claimed for panels installed after January 1, 2006, on a primary or secondary residence located in the United States that you own. 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 Prattville solar panel installer can give you more information about the ITC and how it might apply to your situation.

In August 2022, the Inflation Reduction Act made revisions to the ITC, now titled the Clean Energy Credit. The new Clean Energy Credit is valid until 2035. American homeowners are now eligible for a 30% credit for solar systems that began installation after January 1, 2022, and are completed by the end of 2032. This new credit will then see a slight annual decrease until its expiration. Starting in 2023, the program expansion will also make credits for energy storage systems even easier to claim.

More information about the new Inflation Reduction Act can be found here. Your local Prattville solar panel installer can answer your questions and explain how the new Clean Energy Credit applies to you.

State & Local Solar Incentives

Some solar incentives are often also offered at the local or state level. As with federal incentives, these may include tax credits, rebates and more. Some incentives are ongoing, while others might only be available for a limited time. Incentives might be offered by the Alabama government, or by your county or municipality.

Next Steps for Installing Solar in Prattville

There are many kinds of solar incentives: those offered by the federal government, those provided by the Alabama government and those given by local utility companies, to name a few. The use of solar energy has increased enormously in the last 15 years, partially thanks to these incentives. Speak with your local solar panel installation expert today to find out more information and to save the most money possible on a solar system for your Prattville home.