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
Solar installers are experts in maximizing your solar tax credits and rebates.
Get a free quote from one of our trusted Fort Smith solar installers to see how much you can save.
Please enter a valid 5-digit zip code!
Why you can trust EcoWatch
What Solar Tax Credits, Incentives, and Rebates are Available in Fort Smith?
Federal Residential Renewable Energy Tax Credit
Solar incentives encourage people to switch to renewable energy by providing incentives meant to lower the financial burden of solar panel installation and use. Various kinds of incentives, like cash back, discounts or credit towards your monthly utility bill, might be available to you. Certain incentives may be provided via the state of Arkansas, by your utility company or by county or municipality, while other incentives are federal. Categories of solar incentives include:
- Net Metering: Net metering factors in after your solar system is up and running. If you have a net metering agreement with your Fort Smith 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 areas, this credit is dollar-for-dollar, while in others you might be refunded a percentage of the value.
- Rebates: A solar rebate is a partial refund after the purchase of your solar system. Rebates may be offered by your local utility company, your county or your state. The rebates are usually applied before calculating tax credits.
- Tax Credits: Tax credits reduce, dollar-for-dollar, the amount of income tax you owe the federal government. Tax credits are different from tax deductions.
- Tax Exemptions: Tax exemptions may come in one of two forms. The first is sales tax exemption, applied when you purchase solar panels. The second is property tax exemption, which allows you to ignore the value added by your solar system when paying property tax on your home.
Federal Solar Incentives
When thinking about solar incentives, you likely think of federal incentives first. The solar incentive that you may be most familiar with is the Federal Solar Investment Tax Credit (ITC), which provides a credit on your taxes equal to a predetermined percentage of your solar system's cost.
The ITC applies to solar systems 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, accessories, equipment and labor — 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.
Wondering how the ITC applies to your specific situation? Contact your local Fort Smith solar panel installation expert to get more information.
The Inflation Reduction Act, passed in August 2022, made some changes to 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 systems installed between 2022 and 2032. After 2032, the percentage will decrease slightly each year until the end of the program in 2035. Beginning in 2023, it will also be easier to get credits for energy storage systems with the new act.
Click here to learn more about the new Inflation Reduction Act. To better understand how the new Clean Energy Credit might apply to you, speak with your local Fort Smith solar installation company.
State & Local Solar Incentives
In addition to those provided at the federal level, there are often also state solar incentives. Rebates, tax credits and more can be offered at a more local level. Some incentives are ongoing, while others are only available for a limited time. They might be offered by the Arkansas government, or by your county or municipality.
Next Steps for Installing Solar in Fort Smith
There are many kinds of solar incentives: those given by the federal government, those given by the Arkansas government and those given by local utility companies, to name a few. The use of solar energy has grown tremendously in the last 15 years, partially due to these incentives. Your local Fort Smith solar panel installation company 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
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.