2024 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 2024 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
Source: https://www.dsireusa.org/
Solar incentives are designed to encourage people to switch to renewable energy by offering incentives that lower the financial burden of solar panel installation and use. Incentives could include things like discounts, cash back or credit on your utility bill each month. Some incentives are offered federally, while others are provided by the Arkansas government or your specific utility company, county or municipality. You might qualify for any of the following types of solar incentives:
- Tax Exemptions: Tax exemptions can come in one of two forms. The first is sales tax exemption, which is applied when you purchase solar panels. The second is property tax exemption. This allows you to ignore the added value of your solar system when calculating property tax for your home.
- Net Metering: Net metering factors in once your solar panels are up and running. If you've signed a net metering agreement with your Fort Smith utility company, they will subtract the value of the excess energy your solar system produces from your monthly utility bill. In some locations, this credit is dollar-for-dollar, while in others you may be refunded a percentage of the value.
- Tax Credits: Tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the federal government. (A tax credit is different from a tax deduction.)
- Rebates: Some solar companies will help you claim a rebate, or partial refund after purchase, for your solar panels. States or counties will also offer limited-time rebates at various times. If you receive a rebate, that amount will usually come off your total price before any tax credits are calculated.
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Federal Solar Incentives
When thinking about solar incentives, federal incentives might be the first thing that comes to mind. The Federal Solar Investment Tax Credit, or ITC, is the most commonly known federal solar incentive. The ITC provides 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. Originally, the tax credit was for 30% of the total cost – for panels, labor, equipment and accessories – although that amount may range from 26-30%, depending on when your solar project was undertaken. There is no cap on the amount you can claim.
Speaking with your local Fort Smith solar panel installer is the best way to understand how the ITC could apply to you.
In August 2022, the Inflation Reduction Act made revisions to the ITC, now dubbed the Clean Energy Credit. The Clean Energy Credit is valid until 2035. Any solar installation project that is completed between January 1, 2022, and December 31, 2032, may qualify for a 30% tax credit; this amount will be decreased slightly each year until the end of the current program. Starting in 2023, it will also be easier to claim credits for energy storage systems under the new laws.
Click here to learn more about the new Inflation Reduction Act. To best understand how the new Clean Energy Credit might apply to you, get in touch with your local Fort Smith solar installation expert.
State & Local Solar Incentives
In addition to federal solar incentives, there are often also state ones. Rebates, tax credits and more may be available at a more local level. Some incentives are ongoing, while others are offered for only a limited time. Your local solar incentives could come from your county or municipality, or from the Arkansas government.
Next Steps for Installing Solar in Fort Smith
The large number of solar incentives available has helped tremendously increase the adoption of solar energy nationwide over the last 15 years. You can get solar incentives from the Arkansas government, the federal government or your local utility company. Your local Fort Smith solar panel installation expert can provide you with more details about which incentives you should apply for, and get you started on the path to switching to renewable energy today.
EcoWatch's Fort Smith, AR Solar Incentives FAQs
How much will solar panels save me annually on my electric bill in Fort Smith?
Typically, homeowners in Fort Smith who install solar panels save approximately $821.58 per year, or approximately $15,610.02 over 20 years after they make the switch.
What are some of the environmental benefits of switching to solar energy?
You can lower your carbon footprint by 500 pounds of CO2 annually when you switch to solar panels. This adds up to roughly 10,000 pounds in 20 years. In addition, solar power is a renewable energy source, meaning that making the switch reduces the drain on our planet's resources.
If I change out my appliances for ones that can utilize solar energy, are there any credits that I can claim?
The new Inflation Reduction Act creates a variety of new financial incentives that are available when you make eco-friendly improvements to your home. More details on these incentives, including information about incentives for purchasing new appliances, can be found here.
Can I use a combination of solar and another type of renewable energy to power my home?
Yes, you can employ multiple types of renewable energy to power your home, such as a combination of solar and geothermal. You can also use both renewable energy sources and a backup source of non-renewable energy. Be sure to discuss your proposed plan with your local Fort Smith solar installation expert, so that you understand what you'll need and what kinds of incentives 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.