2024 Solar Incentives Guide for Fayetteville, AR - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Fayetteville.
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 Fayetteville?
Federal Residential Renewable Energy Tax Credit
Source: https://www.dsireusa.org/
Solar incentives are designed to make renewable energy usage more affordable via financial incentives for those who install solar panels on their homes. You might qualify for different types of incentives, including discounts, cash back or monthly utility bill credits, depending on your situation. Some incentives come from your specific utility company, county or municipality, some from the Arkansas government and others from the federal government. Some solar incentives you might qualify for are:
- Tax Credits: Unlike tax deductions, tax credits reduce, dollar-for-dollar, the amount of income tax that you owe the federal government.
- Net Metering: You may be able to sign a net metering agreement with your Fayetteville utility company, that may apply to all or a percentage of the excess electricity your solar panels generate. Your utility company will then subtract this value from your utility bill each month.
- Rebates: A solar rebate is a partial refund credited to your account after you've paid for your solar system. Rebates may be offered by your local utility company, your county or your state. The cash back that you get from the rebates is normally applied before tax credits are calculated.
- Tax Exemptions: Sales tax exemptions are applied at the point of sale for your solar system. Property tax exemptions let you ignore the value that your solar panels add when calculating how much property tax you need to pay on your home.
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Federal Solar Incentives
Federal solar incentives are probably the first thing that comes to mind when you think about solar incentives. The Federal Solar Investment Tax Credit, or ITC, is probably the most well-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 applies to solar panels installed after January 1, 2006, on a primary or secondary residence in the United States that you own. The credit initially covered 30% of the total cost – for panels, accessories, labor and equipment – although that amount may range from 26-30%, depending on when your solar system was installed. There is no cap on the amount you can claim.
To know exactly how much the ITC could save you, get in touch with your local Fayetteville solar panel installer.
In August 2022, the ITC (now titled the Clean Energy Credit) was bolstered by the passage of the Inflation Reduction Act. The Clean Energy Credit has increased the current credit up to 30% for solar installations undertaken between January 1, 2022, and December 31, 2032. At this point, the credit percentage will see a slight decrease annually until the end of the program in 2035. Starting in 2023, the expansion to the program will also make it easier to get credit for energy storage systems.
More information about the new Inflation Reduction Act can be found here. To fully understand how the new Clean Energy Credit applies to you, talk to your local Fayetteville solar installation company.
State & Local Solar Incentives
Tax credits, rebates and more can be provided at multiple levels. Along with federal solar incentives, there are often state and local ones as well. Incentives might be given by your county or municipality, or by the state of Arkansas. Some incentives may be available for only a limited time, while others are ongoing.
Next Steps for Installing Solar in Fayetteville
Solar incentives may be offered by the federal government, the Arkansas government or your local utility company. The growing number of available incentives has facilitated the nationwide growth of solar energy use in the last 15 years. If you're ready to make the switch to solar energy, talking to your local Fayetteville solar panel installation expert is an excellent place to start.
EcoWatch's Fayetteville, AR Solar Incentives FAQs
If I already have solar panels, can I still claim incentives?
You should plan to talk to a representative from the company that installed your solar panels – or call a local Fayetteville solar installer — to clarify which incentives you might qualify for. If your solar panels were installed after January 1, 2022, you likely qualify for the newly increased 30% tax credit under the Inflation Reduction Act. Solar panels installed between 2006 and 2021 may qualify for a tax credit of 26-30%.
Who installs solar panels near me?
To learn about the best solar panel installers near you, read our article on the top solar companies in Fayetteville.
If I change out my appliances for ones that can utilize solar energy, are there benefits that I can claim?
The recently passed Inflation Reduction Act includes provisions for multiple incentives designed to reward homeowners for making eco-friendly upgrades. Some of these incentives include rebates and tax credits for installing new electric appliances. You can find more details about these incentives here.
Can I qualify for incentives both towards the up-front cost of solar panels, and later as reimbursement?
Yes, you can receive both rebates and tax credits towards the cost of your solar panels. Depending on which incentives you are receiving, they may apply in a different order. Make sure that you speak with your solar installer or a local tax professional to verify that you are claiming incentives correctly and getting the most money possible.
Can I use a combination of multiple types of renewable energy to power my home?
You can power your home with multiple types of renewable energy, or a combination of renewable and non-renewable energy. Be sure to discuss your plan with your local Fayetteville solar installer. They can help you as you plan for your project and educate you on the various incentives that you might or might 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.