2025 Solar Incentives Guide for Fort Smith, AR - Tax Credits & Rebates

What Solar Tax Credits, Incentives, and Rebates are Available in Fort Smith?

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.

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.