Decided to install solar panels in Alabama but worried about the upfront costs? Solar incentives in Alabama help to bring them down. And we’ve just prepared the list of them for you.
Key takeaways
- Want to make your home more energy efficient? Alabama is a great state for installing a renewable energy system. And a few federal and local clean energy incentives and rebates coming in many forms make this plan even better, reducing the amount you need to pay for your business or residential system. Receive more free information in this article.
- Federal Tax Credit offers a 30% tax credit on the total cost of the solar system, including equipment and installation costs. This credit is available to both – homeowners and companies. But hurry up, the percentage will change in a few years.
- Alabama lacks a statewide net metering policy reducing your electricity bill for every kW sold to the grid. Net metering availability and process itself must be discussed directly with service utilities. Alabama Power offers payment for excess energy through Rate PAE, but monthly fees impact payback.
- Solar Property Tax Exemption offers a 100% exemption on added property value from solar PV systems. Property value increases by 4% on average, but property taxes remain the same.
- Energy Efficient Mortgages (EEMs) allows for increased loan amounts to cover energy-efficient upgrades, including solar. Insured through FHA and VA programs.
Save 30% of your PV system cost with Federal Solar Tax Credit
The US government wants more people to go solar: it’s a modern and green way of getting energy. This is why the Solar Investment Tax Credit (ITC) program was developed. It allows American citizens to claim 30% of the cost of their installation as an income tax deduction. The cost here is not only solar panels, but also shipping, installation expenses and more. For example, if your system overall made you spend $10,000, the government returns you $3,000. To claim the ITC, complete all the necessary forms and submit them when filing your taxes.
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Get quotesDiscuss possibility of net metering with your electric supplier
Alabama is one of the three states in the USA without a net metering policy. You have to discuss the possibility and conditions of net metering with your electric supplier directly.
For example, Alabama Power pays for excess energy if the customer is on Rate PAE (Purchase of Alternative Energy). However, its customers are subject to monthly Power’s fee which greatly increases the payback period for solar in Alabama. Hopefully in the future solar laws in Alabama change and the Alabama Power fee will be canceled.
Freeze your property tax with solar property tax exemption
4%
- the average increase in your home's value after installing solar panels
In Alabama, installing solar panels won't lead to higher property taxes. While solar panels typically boost a home's value by about 4%, according to Zillow, Alabama's laws exempt 100% of that added value from property tax assessments. This means your property taxes won't increase because you've chosen to go solar, effectively freezing that portion of your taxes.
Energy Efficient Mortgages can help you to go solar faster
The Energy Efficient Mortgages (EEM) program allows you to quickly get more money for energy upgrades for your home or for a new property with preinstalled upgrades. These loans are insured through the Federal Housing Authority (FHA) and Veterans Affairs (VA) programs.
If you qualify for an FHA loan, you do for the EEM program. Usually, the energy package that can be added to a standard FHA loan amounts to the cost of upgrades based on the home energy assessment; or the lesser of 5% of
Solar systems, of course, qualify as energy-efficient upgrades, so your loan can be increased by the amount your system costs. Again, the cost of a PV system doesn’t amount to panels only but includes accessories, shipment and installation as well. Read more about the FHA program and apply on the US Department of Housing and Urban Development.
EEMs through the Veterans Affairs program are available for military personnel, reservists and veterans. The exact loan amount depends on your status and credit history. Check the guide on how to apply for the loan on VA website.
Top 10 myths about solar
Let's talk about putting solar panels on your house. You might have heard some things about them, and some of those things aren't quite right. It's important to know the real story so you can decide if solar panels are a good choice for you.
1. Myth: Solar panels only work when the sun is really, really bright
A lot of people think this, but it's not completely true. Solar panels do work best when the sun is shining its brightest. But they don't need the sun to be super strong all the time. They make electricity from daylight, even if the sun isn't shining directly on them. Even on days when it's cloudy, solar panels still make some power. And, surprisingly, they can even work better when it's a bit cold. So, no matter where you live, even if it's not always sunny, solar panels can still work for you.
2. Myth: Putting in solar panels costs way too much money
Yes, it does cost money to put in solar panels. But you need to think about how much money you'll save in the long run. The price of solar panels has gone down a lot lately, so they are much cheaper now. And, there are programs that help you pay for them. The government might give you money back or let you pay less in taxes. Also, solar panels can make your electricity bill much smaller, or even make it go away completely. This means you'll save a lot of money over many years. Solar panels usually last for a very long time, often 25 years or more, so they can pay for themselves.
3. Myth: You have to fix solar panels all the time
Solar panels don't need a lot of fixing. They don't have parts that move, so they don't break down very often. Usually, you only need to clean them every once in a while to get rid of dirt or dust that might block the sunlight. Rain often cleans them for you. But if you live in a place with a lot of dust or pollution, you might need to clean them yourself. Modern solar panels are also made to handle bad weather, like hail, snow, and strong winds.
4. Myth: Solar panels will mess up my roof
If someone who knows how to put them on correctly installs your solar panels, they won't hurt your roof. In fact, they can even help protect your roof from the weather. Good installers will make sure the panels are put on tightly and that no water can get in.
5. Myth: Solar panels don't make enough electricity to be worth it
Solar panels are much better at making electricity now than they were before. It's true that they can't turn all the sunlight into electricity, but they can turn a lot of it. And scientists are always working to make them even better.
6. Myth: If I get solar panels, I won't need the power company anymore
Unless you have a lot of big batteries to store power and you live far away from other houses, you'll probably still need electricity from the power company. When your solar panels aren't making enough power, like at night or when it's cloudy, you can use electricity from the power company. And when your solar panels make more power than you need, you can often sell it back to the power company.
7. Myth: Putting in solar panels takes forever and is super hard
Putting in solar panels isn't too hard, especially if you have people who know what they are doing help you. From getting the papers you need to putting the panels on your roof and connecting them to your house, it usually only takes a few days.
8. Myth: Solar panels look ugly
Older solar panels might have looked big and not very nice, but new ones look sleek and good. Many companies make solar panels that blend in with your roof. Also, you can put solar panels on the ground if you don't want them on your roof.
9. Myth: If you rent your house, you can't use solar energy
While people who rent usually can't put solar panels on their own roofs, they can still use solar energy through community solar programs. These programs let you pay to use part of a big solar farm, and you get money off your electricity bill.
10. Myth: It's hard to sell your house if you have solar panels
Houses with solar panels often sell for more money and faster than houses without them. Solar panels are a good thing to have and can make your house more attractive to people who want to buy it.
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SHOP SOLAR PANELSYears of experience in translation and a love of nature help Julia find the right words to encourage going solar. She joined the team in 2023 and is happy to make her contribution to a greener future.
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