2024 Solar Incentives Guide for Cabot, AR - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Cabot.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2024 and beyond)
- Ways to optimize your solar investment
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What Solar Tax Credits, Incentives, and Rebates are Available in Cabot?
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Federal Residential Renewable Energy Tax Credit
Source: https://www.dsireusa.org/
Solar incentives mitigate the cost of installing solar panels on your home. This category of financial incentives is in place to encourage more people to make the switch to renewable energy. Incentives could include things like discounts, cash back or monthly utility bill credits. Some incentives are provided by the federal government, while others are offered by the Arkansas government or your utility company, county or municipality. Some broad categories of solar incentives include:
- Tax Exemptions: Sales tax exemptions go into effect at the point of sale for your solar panels. Property tax exemptions let you exclude the value added by your solar system when calculating how much property tax you need to pay.
- Rebates: A rebate is a partial refund after the purchase of your solar system. Rebates might be offered by your local utility company, your state or your county. The cash back that you get from the rebates is normally applied before calculating tax credits.
- Tax Credits: Different from tax deductions, tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the government.
- Net Metering: Net metering factors in once your solar system is up and running. If you've signed a net metering agreement with your Cabot utility company, it will subtract the value of the excess energy produced by your solar system from your utility bill each month. In some areas, this credit is dollar-for-dollar, while in other areas you may receive a refund equivalent to a percentage of the value.
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Federal Solar Incentives
Federal incentives are the type of incentives that you are most likely to have some familiarity with. One of the incentives that most people are likely familiar with is the Federal Solar Investment Tax Credit (ITC). The ITC is a tax credit for a given percentage of the cost of your solar system.
The ITC applies to solar panels installed on your primary or secondary residence in the United States. The solar system has to have been installed after January 1, 2006, on a property you own for you to be eligible for the credit. The ITC originally paid out 30% of all system costs (panels, equipment, accessories and labor), although the covered amount has fluctuated slightly over the last few years 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 Cabot solar panel installer can provide you with more information about the ITC and how it might apply to your situation.
In August 2022, the ITC (now referred to as the Clean Energy Credit) was bolstered by the passage of the Inflation Reduction Act. Homeowners can now qualify for a credit of 30% of the total costs of solar system installation for projects started after January 1, 2022, and completed before the end of 2032. This percentage will then decrease on a yearly basis until the Clean Energy Credit expires in 2035. Starting in 2023, the expansion to the program will also make credits for energy storage systems even easier to claim.
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 speak with your local Cabot solar panel installation expert directly.
State & Local Solar Incentives
Some solar incentives are often also offered at the local or state level. Like with federal incentives, these could include tax credits, rebates and more. Incentives might be handled by your county or municipality, or by the state of Arkansas. Some incentives are available for only a limited time, while others are ongoing.
Next Steps for Installing Solar in Cabot
Solar incentives might come from the federal government, the Arkansas government or your local utility company. The growing number of available solar incentives has helped nationwide use of solar energy increase greatly in the last 15 years. It is a good idea to talk to your local Cabot solar installation expert for more information about these incentives and to make sure that you're getting the largest number possible for your solar system.
EcoWatch's Cabot, AR Solar Incentives FAQs
How do I know if I qualify for specific solar incentives?
It's a good idea to talk to your local Cabot 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 property you own (in the U.S.) between the dates specified by the incentive. Some incentives, such as those provided at the level of the Arkansas government, might have other requirements.
My home already has solar panels. Does my system qualify for any incentives?
An excellent idea would be to talk to a representative from the company that installed your solar panels – or call a local Cabot solar installer — to better understand which incentives you might qualify for. If your solar panels were installed after January 1, 2022, you likely qualify for the recently increased 30% tax credit under the Inflation Reduction Act. Systems installed between 2006 and 2021 may qualify for a tax credit of 26-30%.
How much will solar panels save me on my electric bill in Cabot annually?
On average, Cabot homeowners who install solar panels save about $897.37 per year, or about $17,049.99 over 20 years after making the switch.
Who installs solar panels near me?
To find a top-rated solar panel installer, check out our guide to Cabot's best solar panel companies.
How long until the federal solar tax credit ends?
The Clean Energy Credit (previously called the federal solar tax credit, or ITC), is scheduled to end on January 1, 2035. Currently set at 30%, the credit will drop to 26% in 2033 and to 22% in 2034.
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.