2023 Solar Incentives Guide for Forrest City, AR - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Forrest City.
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 May 04, 2023
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What Solar Tax Credits, Incentives, and Rebates are Available in Forrest City?
Federal Residential Renewable Energy Tax Credit
Source: https://www.dsireusa.org/
The phrase "solar incentives" generally refers to financial incentives implemented by the government and by solar companies to encourage the use of renewable energy by making solar panels more affordable. Incentives may include things like discounts, cash back or credit towards your monthly utility bill. Some incentives are offered by the federal government, while others are handled by the state of Arkansas or your specific utility company, county or municipality. You might qualify for any of the following types of solar incentives:
- Tax Exemptions: Sales tax exemptions go into effect at the time of purchase for your solar panels. Property tax exemptions let you exclude the value added by your solar system when calculating how much property tax you need to pay on your house.
- Tax Credits: Tax credits are dollar-for-dollar reductions (not deductions) in how much income tax you owe the government.
- Net Metering: Net metering factors in once your solar system is up and running. If you have in place a net metering agreement with your Forrest City utility company, the company will subtract the value of the excess energy produced by your solar system from your utility bill each month. In some places, this is a dollar-for-dollar credit, while in others you may get refunded a percentage of the value.
- Rebates: Some solar companies will help you claim a rebate, or partial refund of your purchase, for your solar system. Counties or states will also offer limited-time rebates at various times. If you receive a rebate, that amount will usually be deducted from the total price before any tax credits are calculated.
Federal Solar Incentives
When someone says "solar incentives," you probably think of federal incentives first. The Federal Solar Investment Tax Credit, or ITC, is the most well-known federal solar incentive. The ITC provides a tax credit for a specific percentage of your solar system's cost.
The ITC can be applied to solar panels installed after January 1, 2006 on a primary or secondary residence that you own in the United States. Originally, the tax credit was for 30% of the total cost — for panels, labor, accessories and equipment — although it may range from 26-30%, depending on when your solar project was undertaken. There is no cap on the amount you can claim.
To more fully understand how the ITC might apply to you, speak to your local Forrest City solar panel installer and ask for more information.
In August 2022, the ITC (now called the Clean Energy Credit) was bolstered by the passage of the Inflation Reduction Act. The new Clean Energy Credit is valid until 2035. American homeowners are now eligible for a 30% credit for solar systems that began installation on or after January 1, 2022 and will be done by December 31, 2032. This new credit will then see a slight annual decrease until its expiration. The program expansion also makes claiming credit for energy storage systems easier than ever before, starting in 2023.
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, speak with your local Forrest City solar installation company.
State & Local Solar Incentives
Some solar incentives may be offered at the local or state level. Similar to federal incentives, these could include tax credits, rebates and more. These incentives may be handled by your county or municipality, or by the Arkansas government. Certain incentives are ongoing, while others are available for a limited time.
Next Steps for Installing Solar in Forrest City
Nationwide solar energy use has gone up tremendously in the last 15 years, in part thanks to the increase in availability of solar incentives. You might receive these incentives from the Arkansas government, the federal government or your local utility company. Reaching out to your local Forrest City solar panel installation company is the best first step towards getting the most money possible when you switch to solar energy.
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EcoWatch's Forrest City, AR Solar Incentives FAQs
Can I receive any incentives when I add solar panels to a vacation home, rental property or commercial property?
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.
My home already has solar panels installed. Are there any incentives that I qualify for?
Your best bet is to talk to someone from the company that installed your solar panels — or get in touch with a local Forrest City solar installer — to clarify 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. Solar panels installed between 2006 and 2021 may qualify for a tax credit of 26-30%.
How much can I save annually on my electric bill if I install solar panels on my house in Forrest City?
On average, Forrest City homeowners who install solar panels save about $889.33 per year, or about $16,897.24 over 20 years after they make the switch.
If I change out my appliances for ones that can use solar energy, are there benefits that I can claim?
Under the new Inflation Reduction Act, there are several new financial incentives that are available when you make eco-friendly improvements to your home. More details about these incentives, including information about incentives for purchasing new appliances, can be found here.
Can I receive incentives both towards the up-front cost of solar panels, and later as reimbursement?
Yes, you can claim both tax credits and rebates towards the cost of your solar panels. Depending on precisely which incentives you are applying for, they may apply in a different order. Be sure to talk to your solar installer or a local tax professional to confirm that you are claiming the correct incentives and that you're getting the most money you can.
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.