2023 Solar Incentives Guide for Arkadelphia, AR - Tax Credits & Rebates

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

Source: https://www.dsireusa.org/

Solar incentives are designed to make renewable energy usage more affordable via financial incentives for those who install solar panels on their homes. Incentives might include things like discounts, cash back or credit on your utility bill each month. Some incentives are provided by the federal government, while others are offered by the state of Arkansas or by your utility company, county or municipality. Categories of solar incentives include:

• Rebates: A rebate is a partial refund after the purchase of your solar system. Rebates may 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 tax credits are calculated.
• Net Metering: Net metering becomes relevant once your solar panels are up and running. If you have in place a net metering agreement with your Arkadelphia utility company, the company will subtract the value of the excess energy your solar system produces from your utility bill each month. In some areas, this credit is dollar-for-dollar, while in other areas you might receive a refund equivalent to a percentage of the value.
• Tax Exemptions: Your solar panel system could qualify for both sales tax and property tax exemptions. Sales tax exemptions are effective at the time of purchase. Property tax exemptions let you exclude the value added by your solar panels when calculating property taxes on your house.
• Tax Credits: Tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the government. (A tax credit is different from a tax deduction.)

Federal Solar Incentives

When someone says "solar incentives," you probably think of federal incentives first. The Federal Solar Investment Tax Credit, or ITC, is likely the most commonly known federal solar incentive. The ITC provides a tax credit for a specific percentage of your solar system's cost.

The ITC applies to solar panels installed after January 1, 2006 on a primary or secondary residence that you own in the United States. Initially, the credit applied to 30% of the total cost — for panels, equipment, labor and accessories — although the percentage may range from 26-30%, depending on when your solar system was installed. There is no cap on the amount you can claim.

Have questions about how the ITC applies to your specific situation? Contact your local Arkadelphia solar panel installation expert to get more information.

In August 2022, the ITC (now referred to as the Clean Energy Credit) was expanded and extended by the passage of the Inflation Reduction Act. For solar systems installed between January 1, 2022 and December 31, 2032, homeowners may be eligible for a credit for 30% of the total cost. After 2033, the percentage will decrease annually until the Clean Energy Credit expires in 2035. The program expansion also makes it easier to get credit for energy storage systems, starting in 2023.

More information about the new Inflation Reduction Act can be found here. To fully understand how the new Clean Energy Credit will apply to you, talk to your local Arkadelphia solar installation expert.

State & Local Solar Incentives

Federal solar incentives are not your only option; tax credits, rebates and more may be offered at the local or state level. These incentives — which may be given by the state of Arkansas, or by your county or municipality — might be offered on an ongoing basis, or for only a limited time.

Next Steps for Installing Solar in Arkadelphia

Solar incentives may be offered by your local utility company, the federal government or the Arkansas government. The growing number of available solar incentives has helped nationwide use of solar energy increase greatly in the last 15 years. If you're ready to switch over to solar energy, talking to your local Arkadelphia solar panel installation expert is an excellent place to start.