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

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

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

The term "solar incentives" broadly refers to financial incentives that are in place to encourage increased use of renewable energy by making the installation and use of solar panels more affordable. Incentives might include things like discounts, cash back or monthly utility bill credits. Some incentives are offered by the federal government, while others are handled by the Arkansas government or by your utility company, county or municipality. Categories of solar incentives include:

• Tax Credits: Unlike tax deductions, tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the federal government.
• Rebates: Solar rebates can be provided by your local utility company, or by your county or state. These rebates work as cash back that is applied after you purchase a solar system and before tax credits are calculated.
• Tax Exemptions: Sales tax exemptions are effective at the point of sale for your solar panels. Property tax exemptions allow you to ignore the value that your solar panels add when you calculate the amount of property tax you need to pay.
• Net Metering: Make sure you speak to your Austin utility company about signing a net metering contract. This allows you to get a credit towards your monthly utility bill for the value of excess energy generated by your solar panels. You could receive either a dollar-for-dollar credit or a percentage of the value.

Federal Solar Incentives

When thinking about solar incentives, you probably think of federal incentives first. It's likely that you've heard of the Federal Solar Investment Tax Credit, or ITC. This is a tax credit that reduces your taxes by a specified percentage of the money you spend on solar panels for your home.

The ITC can be applied to the total cost of installing solar panels, including the panels themselves as well as accessories, labor and equipment. This credit can be claimed for panels installed after January 1, 2006 on a primary or secondary residence that you own, as long as it is located in the United States. The tax credit ranges from 26-30% of total costs depending on when your project was completed. There is no maximum amount you can claim.

Your local Austin solar panel installer can provide more information about the ITC and how it may apply to your situation.

In August 2022, the Inflation Reduction Act laid out new provisions for the ITC, now titled the Clean Energy Credit. Homeowners can now qualify for a credit equal to 30% of the total solar system installation costs for projects started after January 1, 2022 and completed before the end of 2032. The credit percentage will then decrease annually until the Clean Energy Credit ends in 2035. Starting in 2023, the expansion will also make claiming credit for energy storage systems easier than ever before.

Click here to learn more about the new Inflation Reduction Act. The best way to understand how the new Clean Energy Credit will apply to you is to talk with your local Austin solar panel installation expert.

State & Local Solar Incentives

Rebates, tax credits and more can be claimed at multiple levels. Along with federal solar incentives, there are often state and local ones, too. These incentives might be provided by your county or municipality, or by the Arkansas government. Certain incentives are ongoing, while others are available for a limited time.

Next Steps for Installing Solar in Austin

Solar incentives may be provided by your local utility company, the federal government or the Arkansas government. The variety of incentives available has contributed to a large increase in solar energy use in the last 15 years. We recommend talking to your local Austin solar installation expert to learn more about these incentives and to make sure that you're getting the largest number possible for your solar panels.