2023 Solar Incentives Guide for Benton, AR - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Benton.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2023 and beyond)
- Ways to optimize your solar investment
Solar installers are experts in maximizing your solar tax credits and rebates.
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Updated September 15, 2023
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What Solar Tax Credits, Incentives, and Rebates are Available in Benton?
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Federal Residential Renewable Energy Tax Credit
Source: https://www.dsireusa.org/
Solar incentives are designed to encourage people to switch their home over to renewable energy by providing financial incentives that lower the burden of solar panel installation and use. You may qualify for various kinds of incentives, including cash back, discounts or credit towards your monthly utility bill, depending on your situation. Certain incentives come from your specific utility company, county or municipality, some from the Arkansas government and others from the federal government. Some broad categories of solar incentives include:
- Tax Credits: Different from tax deductions, tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the government.
- Tax Exemptions: Your solar panels might qualify for both sales tax and property tax exemptions. Sales tax exemptions come into effect at the time of purchase. Property tax exemptions allow you to ignore the added value of the solar panels when you are calculating property taxes on your house.
- Net Metering: You may be able to sign a net metering agreement with your Benton utility company. This agreement may apply to all or a percentage of the excess electricity that is generated by your solar panels. They will then deduct this value from your utility bill each month.
- Rebates: Rebates, or partial refunds after a purchase, are normally given prior to any solar tax credits being calculated. Solar rebates may be given by your local utility company, by your county or by your state.
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Federal Solar Incentives
Federal incentives are the type of incentives that you are most likely to have some familiarity with. An incentive that most people are likely familiar with is the Federal Solar Investment Tax Credit (ITC). This incentive is a tax credit for a given percentage of the cost of your solar system.
The ITC applies towards solar systems installed after January 1, 2006 and allows you to deduct from your taxes a percentage of the total cost of solar panels, accessories, labor and equipment. You can claim this credit for solar panels installed on a primary or secondary residence in the United States that you own. Originally, you could claim 30% of the total cost, although the amount you can claim may range between 26-30%. There is no maximum claim amount.
Reaching out to your local Benton solar panel installation expert is the best way to understand how the ITC may apply to your situation.
The Inflation Reduction Act, passed in August 2022, added more provisions to the ITC (as well as retitling it the Clean Energy Credit). For solar system installations that begin after January 1, 2022 and are completed by the end of 2032, homeowners can receive a credit equal to 30% of the total cost. The percentage will then decrease annually until the Clean Energy Credit expires in 2035. The program expansion also makes credits for energy storage systems even easier to claim, starting in 2023.
Click here to learn more about the new Inflation Reduction Act. The best way to fully understand how the new Clean Energy Credit might apply to you is to talk with your local Benton solar panel company.
State & Local Solar Incentives
Some solar incentives are often also provided at the state and local level. Similar to federal incentives, these could include tax credits, rebates and more. Certain incentives are ongoing, while others are available for a limited time. Incentives might be offered by the Arkansas government, or by your county or municipality.
Next Steps for Installing Solar in Benton
Solar energy use nationwide has significantly increased in the last 15 years, in part due to the proliferation of solar incentives. You can obtain these incentives from your local utility company, the Arkansas government or the federal government. Your local Benton solar panel installation company can provide you with more details about which incentives you can apply for, and get you on track to switch to renewable energy today.
EcoWatch's Benton, AR Solar Incentives FAQs
How much can I save annually on my electric bill if I install solar panels on my Benton home?
When you add solar panels to your house in Benton, you can expect to save approximately $868.23 per year, or approximately $16,496.29 over the next 20 years.
How long until the federal solar tax credit ends?
The federal solar tax credit, formerly called the ITC and now titled the Clean Energy Credit, is scheduled to end on January 1, 2035. The current 30% credit will end in 2032, replaced by a 26% credit in 2033 and a 22% credit in 2034.
I want to switch my appliances out for ones that are more energy-efficient. Are there any credits I can claim?
Under the new Inflation Reduction Act, there are a variety of new financial incentives to encourage you to make eco-friendly improvements to your home. More details regarding these incentives, including information about incentives for purchasing new appliances, can be found here.
Can I claim incentives both towards the up-front cost of solar panels, and later as reimbursement?
The order your incentives will be applied in could vary depending on which incentives you receive but usually yes, you can receive multiple types of incentives for your solar project. Talk with your solar installer or a local tax professional to confirm you are claiming all of the incentives you qualify for and applying them in the correct order.
Can I use a combination of multiple types of renewable energy to power my home?
Yes, you can use multiple types of renewable energy to power your home — for example, a combination of geothermal and solar. You can also use both renewable energy sources and a non-renewable backup source of energy. Be sure to discuss your plan with your local Benton solar panel installer, so that you understand what you'll need and what incentives you may or may not qualify for.
Our goal is to reach as many people as we can with sensible solutions like solar energy. Our team of full-time local researchers collects solar price and installation data for every city in America then compiles it to create these digestible city guides. If you want to read our solar expert's opinion on the top solar companies featured here, follow this link.
Solar incentive research was conducted by Melissa Smith and Karsten Neumeister. Local data analysis was conducted by James Savino. See something we missed or could do better? Email the editor.