State solar incentives

Solar incentives in Alabama: Tax credit and net metering

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.

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.

Discuss 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.

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

  • the Adjusted Value;

  • 115% of the median area price of a Single Family dwelling; or

  • 150% of the national conforming mortgage limit.

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.

Check out solar panels near you!

Looking to build a home solar system? Check out solar panels that we have for sale in Alabama

SHOP SOLAR PANELS

Years 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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