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 March 14, 2023
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What Solar Tax Credits, Incentives, and Rebates are Available in Benton?
First Electric Cooperative - Home Improvement Loans
Federal Residential Renewable Energy Tax Credit
Source: https://www.dsireusa.org/
The term "solar incentives" 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. Solar incentives can include cash back, upfront discounts or monthly credits towards your utility bill. Some incentives are handled by the federal government, some by the Arkansas government and some by your specific utility company, county or municipality. Some broad categories of solar incentives include:
- Rebates: A solar rebate is a partial refund given after you've purchased your solar system. Rebates might be offered by your local utility company, your county or your state. The discount that rebates offer is normally applied to the price of solar panels before calculating tax credits.
- Net Metering: You can sign a net metering agreement with your Benton utility company, that may apply to all or a percentage of the excess electricity that is generated by your solar panels. Your utility company will then deduct this value from your utility bill each month.
- Tax Exemptions: Sales tax exemptions are effective at the time of purchase for your solar panels. Property tax exemptions let you ignore the added value of your solar system when you calculate the amount of property tax you need to pay on your home.
- Tax Credits: Tax credits decrease, dollar-for-dollar, the total amount of tax you owe the government. These are different from tax deductions.
Federal Solar Incentives
When thinking about solar incentives, you probably think of federal incentives first. You've likely heard of the Federal Solar Investment Tax Credit, or ITC. This is a tax credit equal to a predetermined percentage of the money you spend on solar panels for your home.
The ITC can be credited towards the value of a solar system installed on your primary or secondary residence in the United States. The solar system must have been installed after January 1, 2006 on a property owned by you for you to be eligible for the credit. The ITC initially covered 30% of all installation costs (panels, accessories, labor and equipment), although the covered amount has fluctuated slightly over time between 26-30%. The installation date of your solar system will determine what percentage you are eligible for. There is no cap on the claim amount.
Your local Benton solar panel installation expert can give you more information about the ITC and how it applies 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). Homeowners can now receive 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 percentage will then begin to decrease yearly until the Clean Energy Credit expires in 2035. Beginning in 2023, it will also be easier to obtain credits for energy storage systems under this new program.
More information about the new Inflation Reduction Act can be found here. To better understand how the new Clean Energy Credit might apply to you, get in touch with your local Benton solar installers.
State & Local Solar Incentives
There are often state solar incentives available in addition to federal ones. Rebates, tax credits and more may be available at a more local level. Certain incentives are ongoing, while others might only be available for a limited time. Incentives may be offered by the Arkansas government, or by your county or municipality.
Next Steps for Installing Solar in Benton
Solar energy use nationwide has gone up tremendously in the past 15 years, in part due to the growth in the number of solar incentives. You can obtain these incentives from your local utility company, the Arkansas government or the federal government. Contact your local solar panel installer today to find out more information and to save as much money as possible on a solar system for your Benton home.
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EcoWatch's Benton, AR Solar Incentives FAQs
What if I am planning to add solar panels to a vacation home, rental property or commercial property? Can I still qualify for incentives?
While we recommend talking to your local solar installer and/or tax professional to best understand what solar incentives apply to you, many can be claimed on a second home, as long as it is in the United States and owned by you. There may be other incentives available specifically for commercial properties, depending on the details.
How can I learn if I qualify for certain solar incentives?
It's a good idea to talk to your local Benton solar installer to get an understanding of which incentives your project will qualify for. Usually, solar incentives apply to new solar panel systems installed on a property you own (in the U.S.) within a specified date range. Some incentives, like those offered by the government of Arkansas, might have additional requirements.
How long until the federal solar tax credit ends?
The Clean Energy Credit (previously called the federal solar tax credit, or the ITC), is slated to end on January 1, 2035. Currently set at 30%, the credit will drop to 26% in 2033 and to 22% in 2034.
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 are claiming but typically yes, you can claim multiple types of incentives for your solar project. Speak to your solar installer or a local tax professional to make sure you are claiming all of the incentives you qualify for and applying them in the correct order.
Can I use a combination of solar and another type of renewable energy to power my home?
You can power your home with multiple types of renewable energy, or a combination of renewable and non-renewable energy. Be sure to discuss your ideas with your local Benton solar installation expert. They can help you plan your project and also help you understand the various incentives that 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.