2023 Solar Incentives Guide for Arkadelphia, AR - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Arkadelphia.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2023 and beyond)
- Ways to optimize your solar investment
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What Solar Tax Credits, Incentives, and Rebates are Available in Arkadelphia?
Federal Residential Renewable Energy Tax Credit
Solar incentives are designed to make renewable energy usage more affordable via financial incentives for those who install solar panels on their homes. The incentives can include upfront discounts, cash back or credit towards your monthly utility bill. Some incentives are given by the federal government, some by the state of Arkansas and some by your specific utility company, county or municipality. You might qualify for any of the following types of solar incentives:
- Net Metering: Net metering factors in after your solar panels are up and running. If you've signed a net metering agreement with your Arkadelphia utility company, the company will subtract the value of the excess energy produced by your solar system from your utility bill each month. In some locations, this is a dollar-for-dollar credit, while in other places you might make back a percentage of the value.
- Tax Exemptions: These may come in the form of property tax exemptions, which let you ignore the value of your solar system when paying property tax on your home. They may also include exemptions on sales tax at the time of purchase.
- Rebates: Your solar installer might help you claim a rebate, or partial refund of your purchase, for your solar system. States or counties will also sometimes offer limited-time rebates. The value of a rebate will usually come off the total price before tax credits are calculated.
- Tax Credits: Tax credits reduce, dollar-for-dollar, the amount of income tax you owe the government. Tax credits differ from tax deductions.
Federal Solar Incentives
When thinking about solar incentives, you likely think of federal incentives first. The solar incentive that you're most familiar with is probably the Federal Solar Investment Tax Credit (ITC), which gives you a credit on your taxes equal to a percentage of your solar system's cost.
The ITC was originally for 30% of the cost of solar system installation, and has fluctuated slightly over the last few years between 26-30%. The percentage you qualify for will depend on when your solar system was installed. The cost of installation includes the panels themselves as well as the cost of equipment, labor and accessories. There is no maximum claim amount. The ITC can be applied to solar panels installed after January 1, 2006 on your primary or secondary residence. The residence must be in the United States and owned by you.
To better understand exactly how much money the ITC could save you, speak with your local Arkadelphia solar panel installation expert.
The ITC has been renewed and expanded following the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. With the new provisions, solar installation projects started after January 1, 2022 and completed by the end of 2032 might qualify for a 30% tax credit. This credit amount will then decrease slightly each year until the end of the current Clean Energy Credit in 2035. Starting in 2023, it will also be easier to qualify for credits for energy storage systems under this new program.
Click here to learn more about the new Inflation Reduction Act. Your local Arkadelphia solar panel company is the best resource for answering your questions regarding the new Clean Energy Credit and how it applies to you.
State & Local Solar Incentives
Tax credits, rebates and more might be claimed at multiple levels. On top of federal solar incentives, there are often state and local ones, too. Incentives might be offered by your county or municipality, or by the state of Arkansas. Some incentives may be available for only a limited time, while others are ongoing.
Next Steps for Installing Solar in Arkadelphia
The nationwide use of solar energy has increased enormously in the last 15 years, in part due to the proliferation of solar incentives. You may get these incentives from your local utility company, the Arkansas government or the federal government. Talking to your local Arkadelphia solar panel installer is an excellent first step towards making sure you get all the incentives you qualify for when you switch to solar energy.
EcoWatch's Arkadelphia, AR Solar Incentives FAQs
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