Unlock Alabama’s Solar Power Potential with Incentives and Rebates
As one of the hottest states in the U.S., Alabama’s scorching summer temperatures make it an ideal location for harnessing solar energy. While the state doesn’t offer specific solar incentives or rebates, property owners can still benefit from investing in solar panels and reducing their energy costs.
Explore Alabama’s Solar Incentives and Rebates
Federal Solar Tax Credit
Alabama homeowners can take advantage of the Federal Investment Tax Credit (ITC), a substantial incentive for outright solar system purchases. This credit currently stands at 26% of your system’s cost but will drop to 22% in 2023, making it wise to go solar sooner rather than later.
If you invest in solar panels by the end of 2032, the federal tax credit is a whopping 30% of your system’s total cost, including equipment, labor, and permitting fees. For example, if your solar energy system costs $20,000, you’d be eligible for a $6,000 federal solar tax credit, representing a 30% discount.
By 2033, the federal tax credit will decrease to 26%, so act now to maximize your savings.
Solar Power Performance Payments (PBIs)
Alabama offers Solar Power Performance Payments, also known as performance-based incentives (PBIs) or production incentives, through the Tennessee Valley Authority. These incentives come in the form of cash payments based on the kilowatt-hours (kWh) or BTUs generated by your renewable energy system, as measured by your meter.
The electricity produced is associated with Solar Renewable Energy Credits (SRECs), whose value fluctuates according to supply and demand. SRECs can help offset the cost of your solar energy system.
Solar Property Tax Exemptions
Alabama provides a 10-year property tax exemption for the added value from solar installations, renewable for an additional 10 years, up to a maximum of 20 years per installation. Property owners must submit an application to their municipal or county tax authority before installing and operating their solar energy system to take advantage of this tax exemption.
Net Metering
While Alabama’s Public Service Commission (PSC) doesn’t have a statewide net metering policy, property owners can discuss arrangements with their utility company. For example, if your utility provider is Alabama Power, you can apply for a “Purchase of Alternate Energy” (PAE) rate, where they pay you a lower rate than retail for exported energy. While not a direct solar incentive, this can lead to long-term savings for property owners with solar installations.
Harness Alabama’s Solar Potential
With the state’s high energy costs and abundant sunshine, investing in solar panels can be a wise and long-lasting investment for Alabama property owners. Partner with a reputable solar company to evaluate your incentive and rebate options, and start enjoying the benefits of clean, renewable energy today.
