2024 Solar Incentives Guide for El Dorado, AR - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in El Dorado.
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 El Dorado?
Federal Residential Renewable Energy Tax Credit
Source: https://www.dsireusa.org/
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.
EcoWatch's El Dorado, AR Solar Incentives FAQs
My home already has solar panels. Does my system qualify for any incentives?
Your best bet is to talk to the company that installed your solar system – or get in touch with a local El Dorado 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%.
I want to trade in my old appliances for ones that are more energy-efficient. Are there any credits I can claim?
Under the new Inflation Reduction Act, there are a number of new financial incentives that are available when you make eco-friendly improvements to your home. More details on these incentives, including information about incentives for purchasing new appliances, can be found here.
Can I claim incentives both towards the initial cost of solar panels, and later as reimbursement?
Yes, you can receive both tax credits and rebates towards the cost of solar panels. Depending on precisely which incentives you are claiming, they may apply in a different order. Make sure that you speak with your solar installer or a local tax professional to ensure that you are claiming the correct incentives and that you're getting the most money possible.
Can I use solar and another type of renewable energy in combination 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 combine renewable energy generation with a non-renewable backup source of energy. Make sure that you discuss your plan with your local El Dorado solar installation expert, so that you understand what you'll need and what kinds of 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.