2023 Solar Incentives Guide for Bentonville, AR - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Bentonville.
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 Bentonville?
Federal Residential Renewable Energy Tax Credit
The phrase "solar incentives" refers to a wide range of financial incentives implemented to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. Solar incentives can include upfront discounts, cash back or monthly credits towards your utility bill. Some incentives are offered by the federal government, some by the state of Arkansas and some by your utility company, county or municipality. Some solar incentives you might qualify for are:
- Net Metering: Net metering factors in after your solar system is up and running. If you have a net metering agreement in place with your Bentonville utility company, the company will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some locations, this credit is dollar-for-dollar, while in other places you may receive a refund equivalent to a percentage of the value.
- Tax Credits: Tax credits lower, dollar-for-dollar, the amount of income tax you owe the government. Tax credits differ from tax deductions.
- Rebates: Solar rebates may be provided by your state or county, or by your local utility company. These rebates are essentially partial refunds that are applied after you purchase a solar system and before tax credits are calculated.
- Tax Exemptions: Your solar panel system might qualify for exemptions on both sales and property tax. Sales tax exemptions are applied at the time of purchase. Property tax exemptions let you ignore the added value of the solar panels when you are calculating property taxes on your home.
Federal Solar Incentives
Federal solar incentives are likely the first thing that comes to mind when you think about solar incentives. The Federal Solar Investment Tax Credit, or ITC, is the most commonly known federal solar incentive. The ITC provides you with a tax credit for a specific percentage of your solar system's cost.
The ITC applies 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 located in the United States that you own. From its original value of 30% of the total cost, the credit has fluctuated slightly between 26-30%, and you may qualify for varying percentages depending on when your project was completed. There is no maximum claim amount.
To more fully understand how the ITC might apply to your situation, call your local Bentonville solar panel installer and ask for more information.
In August 2022, the Inflation Reduction Act laid out new provisions for the ITC, now dubbed the Clean Energy Credit. The Clean Energy Credit lasts until 2035. Your solar installation project undertaken between 2022 and 2032 may qualify for a 30% tax credit. This amount will be decreased slightly on a yearly basis until the end of the current program. Starting in 2023, the expansion will also make claiming credit for energy storage systems easier than ever before.
More information about the new Inflation Reduction Act can be found here. The best way to understand how the new Clean Energy Credit might apply to you is to speak with your local Bentonville solar panel installers directly.
State & Local Solar Incentives
Rebates, tax credits and more might be claimed at multiple levels. In addition to federal solar incentives, there are often state and local ones, too. Some incentives are ongoing, while others are only available for a limited time. Solar incentives may be provided by your county or municipality, or by the Arkansas government.
Next Steps for Installing Solar in Bentonville
Solar incentives may be offered by the Arkansas government, the federal government or your local utility company. The growing number of solar incentives available has contributed to a large increase in solar energy use in the last 15 years. Your local Bentonville solar panel installation company can provide you with more details about which incentives you can apply for, and get you started on the path to switching to renewable energy today.
EcoWatch's Bentonville, AR Solar Incentives FAQs
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