Alabama - Energy tax credit, solar rebates and incentives

Alabama Renewable and Solar Energy Incentives

Generation Partners Program – TVA (Residential/Commercial)

The Tennessee Valley Authority along with affiliated utility companies grant a power generation incentive for homeowners and commercial businesses that utilize renewable energy systems.

• Qualifying systems: biomass, small hydropower, solar panel installation and wind power.
• Incentive amount is dependent upon the type of system.  For solar systems, customers will receive a premium rate of $0.12/kWh on top of the standard retail rate.  All other renewable energies are offered $0.03/kWh plus retail rates (small hydropower, biomass and wind energy systems).
• New subscribers will receive a $1,000 bonus for joining that can be put toward installation costs of a given system.
• There is currently no maximum incentive for this program.

Reimbursement is represented in the form of credit on the participant’s monthly electric bill.  For net excess generation produced, energy distribution companies will issue payment based on their company’s pre-established rates.

Systems must be greater than 500 watts and no larger than 999 kilowatts to participate.

Biomass Energy Program (Commercial)

This program is designed to assist in the purchasing and installing of biomass energy units.

• Qualified applicants will receive up to $75,000 to help mitigate the interest that accrues over the lifetime of loans.
• Qualified sectors: industrial, commercial, institutional facilities; city, county and state government buildings, agricultural landowners.
• Grants vary from project to project and are dependent upon the type of project and size of the system.

Local Government Energy Loan Program (Local Government/Schools)

Substantial loan are available through this program for local government buildings and schools from K-12 to universities and colleges that seek conservation energy technologies and/or renewable energy systems installed.

• Qualified systems: solar panel (electric - PV), passive solar space heat, solar water heat, CHP/cogeneration, daylighting, hydroelectric, wind, and biomass. Other various energy efficient technologies are also eligible.
• Local government buildings, universities and colleges may receive up to $350,000 for qualified system installations.  K-12 schools are granted up to $350,000 for each campus project or up to $500,000 per school district.
• The interest rate for loans extended through this program is 0%, which must be paid back within 10 years.  The program administrator reserved the right to attach a 3% management fee of the loan amount.

Utility-sponsored Loan and Rebate Programs (Residential/Commercial)

• There are various loan and rebate programs available through participating energy distribution companies designed to aid in the purchase and installation of energy efficiency technologies and renewable energy systems.
• The majority of these programs are geared toward energy efficient technologies like solar panel installations, wind turbines and geothermal heating systems.

Federal Energy Tax Credit (Residential/Commercial)

Individual taxpayers and commercial businesses are granted a tax credit of 30% of the total expenses, which include installation of residential and commercial solar panel (electric) systems, solar thermal systems, fuel cells and labor expenses.  Residential wind energy installations and geothermal pumps are also eligible for the Federal energy tax credit.

• Solar electric systems and solar thermal heaters have no limit to the incentive.
• If there is excess federal tax credit, it may be carried over to the subsequent taxable year.  
• This may continue on through consecutive years until 2016, under which unused credit may or may not be expunged.

Federal Energy Conservation Subsidy Exclusion (Residential)

• Public utilities provide residential purchasers with an exemption of 100% of energy conservation subsidies.
• The overall worth of an installation or renewable utility regardless of the energy conservation capacity, will be excluded from the buyer’s gross income.
• Customers who participate in a utility company’s energy conservation program may be given a reduced rate of electricity utilized or a nonrefundable credit of the price of electricity on the customer’s monthly electric bill.

Energy-Efficient Mortgages (Residential)

• With this federal loan program, homeowners may utilize energy-efficient mortgages (EEM) to either supplement or completely fund renewable energy systems.

Example: 4KW System – Residential Installation Cost

Average Electric Bill: $250/mo
Projected Annual Bill Escalation: 5%
Cost Per Watt: $6.50

- Estimated System Cost: $26,000
- Federal/State Tax Credit: $7,800
- State/Utility Rebate: $0
- Net Cost: $18,200
- Cumulative Lifetime Savings (25 Years): $15,736
- Investment Return: 2.0%

Savings of 30% on the total cost of your solar system through incentives