2023 Solar Incentives Guide for Fort Smith, AR - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Fort Smith.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2023 and beyond)
- Ways to optimize your solar investment
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What Solar Tax Credits, Incentives, and Rebates are Available in Fort Smith?
Federal Residential Renewable Energy Tax Credit
Solar incentives are meant to help mitigate the cost of installing a solar panel system on your home. This category of financial incentives is intended to encourage more Americans to make the switch to renewable energy. Incentives could include things like discounts, cash back or credit on your utility bill each month. Some incentives are handled federally, while others are handled by the Arkansas government or your utility company, county or municipality. Some solar incentives you might qualify for are:
- Tax Exemptions: Your solar panels may qualify for both sales tax and property tax exemptions. Sales tax exemptions come into effect at the time of purchase. Property tax exemptions allow you to ignore the value added by your solar panels when you are calculating property taxes on your house.
- Tax Credits: Tax credits decrease, dollar-for-dollar, the amount of income tax you owe the government. Tax credits differ from tax deductions.
- Rebates: Some solar companies will help you claim a rebate, or partial refund of your purchase, for your solar panels. Counties or states will also offer limited-time rebates at various times. The value of a rebate will usually come off your total price before tax credits are calculated.
- Net Metering: Don't forget to talk to your Fort Smith utility company about signing a net metering agreement. This will allow you to get a credit towards your utility bill every month for the value of excess energy your solar panels generate. You could receive either a dollar-for-dollar credit or a percentage of the value.
Federal Solar Incentives
Federal incentives are the type of incentives that you are most likely to have some knowledge of. The solar incentive that you may be most familiar with is the Federal Solar Investment Tax Credit (ITC), which gives you a credit on your taxes equal to a specified percentage of the cost of your solar system.
The ITC initially applied to 30% of the cost of solar system installation, and has fluctuated slightly over the years between 26-30%. The percentage you qualify for will depend on when your solar system was installed. The cost of installation includes the panels themselves as well as the cost of accessories, labor and equipment. There is no maximum amount you can claim. The ITC applies to solar panels installed after January 1, 2006 on your primary or secondary residence. The residence must be owned by you and in the United States.
To understand exactly how much the ITC could save you, talk to your local Fort Smith solar panel installation expert.
In August 2022, the ITC (now titled the Clean Energy Credit) was expanded and extended by the passage of the Inflation Reduction Act. Homeowners are now eligible for a credit of 30% of the total solar system installation costs for projects started after January 1, 2022 and completed before the end of 2032. The credit percentage will then begin to decrease annually until the Clean Energy Credit ends in 2035. Starting in 2023, it will also be easier to get credits for energy storage systems under this new program.
Click here to learn more about the new Inflation Reduction Act. To best understand how the new Clean Energy Credit applies to you, reach out to your local Fort Smith solar installation company.
State & Local Solar Incentives
There are often state solar incentives available in addition to federal ones. Rebates, tax credits and more can be offered at a more local level. These incentives might be given out 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 Fort Smith
The nationwide use of solar energy has gone up significantly in the past 15 years, in part due to the growth in the number of solar incentives. You might receive these incentives from your local utility company, the federal government or the Arkansas government. We recommend talking to your local Fort Smith solar installation expert to learn more about these incentives and to be sure that you're getting the largest number possible for your solar panels.
EcoWatch's Fort Smith, AR Solar Incentives FAQs
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