2023 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 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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Updated March 14, 2023
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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 encourage homeowners to switch to renewable energy by offering financial incentives meant to lower the burden of solar panel installation and use. You might qualify for different kinds 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 solar incentives you might qualify for are:
- Net Metering: Net metering is an incentive you can get after your solar system is up and running. If you have a net metering agreement with your Fayetteville utility company, they will subtract the value of the excess energy your solar system produces from your monthly utility bill. In some places, this is a dollar-for-dollar credit, while in other areas you might be refunded a percentage of the value.
- Tax Credits: These credits are dollar-for-dollar reductions (not deductions) in how much in taxes you owe the federal government.
- Rebates: Some solar companies will help you claim a rebate, or partial refund after purchase, for your solar panels. Counties or states will also sometimes offer limited-time rebates. If you receive a rebate, that amount will usually come off the total price before any tax credits are calculated.
- Tax Exemptions: Tax exemptions can come in two forms. The first is sales tax exemption, which is applied when you purchase solar panels. The second is property tax exemption, which allows you to ignore the added value of your solar system when calculating property tax for your house.
Federal Solar Incentives
Federal incentives are the kind of incentives that you are most likely to have heard of. An incentive many people are probably familiar with is the Federal Solar Investment Tax Credit (ITC). The ITC is a tax credit for a specified percentage of your solar system's cost.
The ITC can be credited towards the value of solar panels installed on your primary or secondary residence in the United States. The solar panels must have been installed on a property you own after January 1, 2006 for you to be eligible for the credit. Initially, the ITC applied to 30% of all costs (panels, accessories, equipment and labor), although the total amount has fluctuated 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.
To better understand how the ITC could apply to you, call your local Fayetteville solar panel installation expert and request 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 Clean Energy Credit lasts until 2035. Solar installation projects started after January 1, 2022 and completed by the end of 2032 may qualify for a 30% tax credit. This amount will decrease slightly on a yearly basis until the end of the current program. Beginning in 2023, it will also be easier to get credits for energy storage systems under the new laws.
Click here to learn more about the new Inflation Reduction Act. Your local Fayetteville solar panel installation expert is the best person to answer your questions about the new Clean Energy Credit and how it will apply to you.
State & Local Solar Incentives
Some solar incentives are often also offered at the local or state level. Similar to federal incentives, these might include rebates, tax credits and more. Incentives might be given by the state of Arkansas, or by your county or municipality. Some incentives may be available for only a limited time, while others are ongoing.
Next Steps for Installing Solar in Fayetteville
The nationwide use of solar energy has gone up significantly in the last 15 years, in part due to the increase in availability of solar incentives. You can obtain these incentives from the federal government, the Arkansas government or your local utility company. Speaking with your local Fayetteville solar panel installation expert is an excellent first step towards getting all the incentives you qualify for when you switch to solar energy.
Best Technology
Tesla Energy
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- Customer service varies by local dealer
Best Warranty Coverage
Sunpro Solar
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EcoWatch's Fayetteville, AR Solar Incentives FAQs
What if I want to add a solar system to a vacation home, rental property or commercial property? Do I still qualify for incentives?
Many solar incentives are intended to apply to a property you own that is located within the United States, and most secondary residences will fall under this distinction. Other solar incentives may be available for commercial properties, depending on the details. We recommend reaching out to your local solar installer and/or tax professional to better understand what incentives may apply to your specific situation.
How can I learn if I qualify for certain solar incentives?
It's a smart idea to get in touch with your local Fayetteville solar installer for a better understanding of which incentives your project may qualify for. Typically, 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, like those provided by the Arkansas government, may have other requirements.
I already have solar panels installed. Does my system qualify for any incentives?
If your solar panels were installed after January 1, 2022, you may qualify for the recently increased 30% tax credit under the Inflation Reduction Act. If you installed your system between 2006 and 2021, you may qualify for a tax credit between 26% and 30%, depending on the exact installation date. Reaching out to the company that installed your solar system, or any local Fayetteville solar installer, can help you learn more about what incentives you can apply for.
What are the top solar panel installation companies near me?
To learn about the best solar panel installation companies near you, read our article on the top solar companies in Fayetteville.
When does the federal solar tax credit end?
The Clean Energy Credit (previously referred to as 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.