2025 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 2024 and beyond)
- Ways to optimize your solar investment
Solar installers are experts in maximizing your solar tax credits and rebates.
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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/
Solar incentives encourage homeowners 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 qualify for several kinds of incentives, such as 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 broad categories of solar incentives include:
- Tax Credits: Tax credits lower, dollar-for-dollar, how much income tax you owe the federal government. Tax credits are different from tax deductions.
- Net Metering: Net metering factors in once your solar panels are up and running. If you have a net metering agreement in place with your Forrest City utility company, they will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some places, this is a dollar-for-dollar credit, while in others you may make back a percentage of the value.
- Rebates: A rebate is a partial refund after the purchase of your solar panels. These might be offered by your local utility company, your state or your county. The discount that rebates offer is normally applied to the price of solar panels before tax credits are calculated.
- Tax Exemptions: Your solar panel system could 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 ignore the added value of the solar panels when you are calculating property taxes on your house.
Federal Solar Incentives
When thinking about solar incentives, you probably think of federal incentives first. You may have heard of the Federal Solar Investment Tax Credit, or ITC. This incentive is a tax credit equal to a specified percentage of the money you spend installing solar panels.
The ITC originally covered 30% of the total cost of installing solar panels, although that number has fluctuated slightly over time between 26-30%. The installation date of your solar system will determine what percentage you qualify for. The total installation cost includes the panels themselves as well as the cost of accessories, labor and equipment. There is no maximum claim amount. The ITC applies to solar systems installed after January 1, 2006, on your primary or secondary residence. The residence must be owned by you and in the United States.
To better understand how the ITC will apply to you, get in touch with your local Forrest City solar panel installer and request more information.
The Inflation Reduction Act, passed in August 2022, expanded and extended the ITC (as well as retitling it the Clean Energy Credit). The Clean Energy Credit has increased the current credit up to 30% for solar installation projects started after January 1, 2022, and completed by the end of 2032. After this, the percentage will decrease slightly each year until the end of the program in 2035. Starting in 2023, the expansion will also make it easier to get credit for energy storage systems.
Click here to learn more about the new Inflation Reduction Act. Your local Forrest City solar panel installers are the best people to answer your questions regarding the new Clean Energy Credit and how it will apply to you.
State & Local Solar Incentives
Some solar incentives are often also provided by state and local governments. Like with federal incentives, these could include tax credits, rebates and more. These incentives — which may be given by the state of Arkansas, or by your county or municipality — may be offered for only a limited time, or on an ongoing basis.
Next Steps for Installing Solar in Forrest City
Solar incentives can come from your local utility company, the Arkansas government or the federal government. The variety of available solar incentives has helped nationwide use of solar energy increase greatly in the last 15 years. Your local Forrest City solar panel installer can provide you with more details about which incentives you might qualify for, and get you on track to switch to renewable energy today.
EcoWatch's Forrest City, AR Solar Incentives FAQs
How much will a solar system save me on my electric bill in Forrest City annually?
Once you add solar panels to your house in Forrest City, you can expect to save about $889.33 per year, or around $16,897.24 over 20 years.
When does the federal solar tax credit end?
The Clean Energy Credit (formerly called the federal solar tax credit, or ITC), currently ends on January 1, 2035. Currently set at 30%, the credit will drop to 26% in 2033 and to 22% in 2034.
If I change out my appliances for ones that utilize solar energy, are there any credits that I can claim?
With the passage of the new Inflation Reduction Act, there are several new financial incentives to encourage you to 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 get any financial 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; most secondary residences will fall under this distinction. Other solar incentives may be available for commercial properties, depending on the specifics. We recommend speaking with your local solar installer and/or tax professional to better understand what incentives will apply to your specific situation.
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