2023 Solar Incentives Guide for Farmington, AR - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Farmington.
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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By EcoWatch Local Advisors
Data Analysis: James Savino
Ranking Methodology: Karsten Neumeister
Updated March 14, 2023
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What Solar Tax Credits, Incentives, and Rebates are Available in Farmington?
Federal Residential Renewable Energy Tax Credit
The term "solar incentives" includes 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. Incentives may include things like discounts, cash back or monthly utility bill credits. Some incentives are offered federally, while others are offered by the Arkansas government or by your specific utility company, county or municipality. Categories of solar incentives include:
- Tax Exemptions: Sales tax exemptions are effective at the time of purchase for your solar system. Property tax exemptions let you exclude the value added by your solar system when you calculate how much property tax you need to pay on your home.
- Rebates: Solar rebates can be provided by your county or state, or by your local utility company. These rebates are essentially cash back that is applied after your purchase of solar panels and before tax credits are calculated.
- Net Metering: Make sure you talk with your Farmington utility company about signing a net metering agreement. This allows you to get a credit towards your monthly utility bill for the value of excess energy generated by your solar panels. You may receive either a dollar-for-dollar credit or a percentage of the value.
- Tax Credits: These credits are dollar-for-dollar reductions (not deductions) in how much income tax you owe the federal government.
Federal Solar Incentives
Federal incentives are the kind of incentives that you are most likely to have some knowledge of. The solar incentive that you're most familiar with is probably the Federal Solar Investment Tax Credit (ITC), which provides a credit on your taxes equal to a specified percentage of the cost of your solar system.
The ITC applies to a solar system installed on your primary or secondary residence in the United States. The solar system must have been installed on a property you own after January 1, 2006 for you to claim the credit. Initially, the ITC applied to 30% of all system costs (panels, labor, equipment and accessories), 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 amount you can claim.
To find out exactly how much money the ITC could save you, contact your local Farmington solar panel installer.
In August 2022, the Inflation Reduction Act made revisions to the ITC, now titled the Clean Energy Credit. Homeowners are now eligible for a credit equal to 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 yearly until the Clean Energy Credit expires in 2035. Starting in 2023, it will also be easier to claim credits for energy storage systems with the new act.
More information about the new Inflation Reduction Act can be found here. To fully understand how the new Clean Energy Credit might apply to you, get in touch with your local Farmington solar installers.
State & Local Solar Incentives
Not all solar incentives are federal; tax credits, rebates and more may be offered at the local or state level. These incentives may be handled by your county or municipality, or by the Arkansas government. Some incentives may be available for a limited time, while others are ongoing.
Next Steps for Installing Solar in Farmington
You can qualify for solar incentives from the federal government and the Arkansas government, as well as from your local utility company. Growing availability of solar initiatives in the past 15 years has helped greatly increase nationwide adoption of solar energy. Call your local solar panel installer today to learn more and to save as much money as possible on a solar system for your Farmington home.
- Price-match guarantee
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- Best solar battery on the market
- Some reported issues with customer service
- Customer service varies by local dealer
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- Industry-leading warranty coverage
- Expansive service area
- Some reported communication issues
- No leases or PPAs
EcoWatch's Farmington, AR Solar Incentives FAQs
How do I learn if I qualify for certain solar incentives?
It's a good idea to talk to your local Farmington solar installer to get an understanding of which incentives your project may qualify for. Typically, solar incentives apply to new solar panel systems installed on a property you own (in the U.S.) between the dates specified by the incentive. Some incentives, like those provided at the level of the Arkansas government, might have other requirements.
If my house already has solar panels, can I still claim incentives?
An excellent idea would be to talk to someone from the company that installed your solar panels — or reach out to a local Farmington solar installer — to learn about which incentives you may qualify for. If your system was 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%.
Who installs solar panels near me?
To discover the best solar panel installation companies near you, take a look at our article on the best solar companies in Farmington.
What are some environmental benefits of adding solar panels to my house?
Solar energy is a renewable energy source — by switching where you get your energy, you help reduce the strain on our planet's resources. A solar system can also reduce your home's CO2 emissions by 500 pounds a year, or around 10,000 pounds over 20 years.
Can I qualify for incentives both towards the initial 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 usually yes, you can claim multiple types of incentives for your solar project. Check with your solar installer or a local tax professional to be sure you are claiming all the incentives you are eligible for and applying them in the correct order.
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.