2024 Solar Incentives Guide for El Dorado, AR - Tax Credits & Rebates

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

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Solar incentives are intended to encourage people to switch their home over to renewable energy by providing incentives meant to lower the financial burden of solar panel installation and use. You may be eligible for several types of incentives, such as discounts, cash back or credit towards your monthly utility bill, depending on your situation. Some incentives come from your specific utility company, county or municipality, some from the state of Arkansas and others from the federal government. Some broad categories of solar incentives include:

• Tax Exemptions: Your solar panel system may qualify for exemptions on both sales and property tax. Sales tax exemptions are applied at the time of purchase. Property tax exemptions allow you to exclude the value that solar panels add when calculating property taxes on your house.
• Rebates: Solar rebates can be provided by your county or state, or by your local utility company. These rebates are essentially partial refunds that are applied after your purchase of solar panels and before tax credits are calculated.
• Tax Credits: Tax credits are dollar-for-dollar reductions (not deductions) in how much in taxes you owe the government.
• Net Metering: You may be able to sign a net metering agreement with your El Dorado utility company, that may apply to all or a percentage of the excess electricity that is generated by your solar panels. They will then subtract this value from your utility bill each month.

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Federal Solar Incentives

Federal solar incentives are likely to be the first thing that comes to mind when you think about solar incentives. The Federal Solar Investment Tax Credit, or ITC, is the best-known federal solar incentive. The ITC allows you to claim a tax credit for a specific percentage of the cost of your solar system.

The ITC can be applied to the total cost of solar system installation, including the panels themselves as well as equipment, labor and accessories. You can claim this credit for panels installed after January 1, 2006, on a primary or secondary residence that you own and that is located in the United States. 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 amount you can claim.

To more fully understand how the ITC might apply to your situation, call your local El Dorado solar panel installer and ask for more information.

The ITC has been renewed and expanded following the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. The new Clean Energy Credit extends until 2035. Homeowners are now eligible for a 30% credit for solar systems installed between January 1, 2022, and December 31, 2032. The total credit will then decrease annually until its expiration. Starting in 2023, the program expansion will also make credits for energy storage systems even easier to claim.

Click here to learn more about the new Inflation Reduction Act. The easiest way to fully understand how the new Clean Energy Credit might apply to you is to get in touch with your local El Dorado solar panel installers.

State & Local Solar Incentives

Some solar incentives are often also provided by state and local governments. As with federal incentives, these can include tax credits, rebates and more. These incentives — which may be provided by the state of Arkansas, or by your county or municipality — could be offered for only a limited time, or on an ongoing basis.

Next Steps for Installing Solar in El Dorado

You can qualify for solar incentives from the Arkansas government and the federal government, as well as from your local utility company. The increased availability of solar initiatives in the past 15 years has helped increase nationwide solar energy use enormously. It is a good idea to talk to your local El Dorado solar installation company to learn more about these incentives and to ensure that you're getting all the money you can for your solar panels.