2023 Solar Incentives Guide for Hope, AR - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Hope.
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.
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Updated October 25, 2023
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What Solar Tax Credits, Incentives, and Rebates are Available in Hope?
Federal Residential Renewable Energy Tax Credit
Source: https://www.dsireusa.org/
Solar incentives help mitigate the cost of installing solar panels on your home. This category of financial incentives is designed to encourage more homeowners to switch their home over to renewable energy. You might 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. Categories of solar incentives include:
- Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the federal government. (A tax credit is different from a tax deduction.)
- Net Metering: Net metering becomes relevant after your solar panels are up and running. If you've signed a net metering agreement with your Hope 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 is a dollar-for-dollar credit, while in other areas you may be refunded a percentage of the value.
- Tax Exemptions: Tax exemptions may come in two forms. First, there is sales tax exemption, applied when you purchase solar panels. The second is property tax exemption. This allows you to ignore the value added by your solar system when calculating property tax for your home.
- Rebates: Solar rebates can be provided by your local utility company, or by your county or state. These rebates are essentially cash back that is applied after you purchase solar panels and before tax credits are calculated.
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Federal Solar Incentives
When someone says "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 towards solar systems installed after January 1, 2006 and allows you to deduct from your taxes a percentage of the total cost of solar panels, labor, accessories and equipment. You can claim this credit for a solar panel system installed on a primary or secondary residence in the United States that you own. The original amount you could claim was 30% of the total cost, although certain projects may qualify for only 26%, depending on the details. There is no maximum amount you can claim.
To better understand exactly how much the ITC could save you, contact your local Hope 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. For solar systems installed between January 1, 2022 and December 31, 2032, homeowners can receive a credit equal to 30% of the total cost. After 2033, the percentage will decrease annually until the Clean Energy Credit ends in 2035. The program expansion also makes claiming credit for energy storage systems easier than ever before, starting in 2023.
Click here to learn more about the new Inflation Reduction Act. To fully understand how the new Clean Energy Credit applies to you, get in touch with your local Hope solar installers.
State & Local Solar Incentives
Some solar incentives are often also provided at the state and local level. As with federal incentives, these could include tax credits, rebates and more. Incentives might be offered by the state of Arkansas, or by your county or municipality. Certain incentives are available for only a limited time, while others are ongoing.
Next Steps for Installing Solar in Hope
Nationwide solar energy use has significantly increased in the past 15 years, in part due to the proliferation of solar incentives. You can obtain these incentives from the Arkansas government, the federal government or your local utility company. When you're prepared to make the switch to solar energy, getting in touch with your local Hope solar panel installation expert is a great first step.
EcoWatch's Hope, AR Solar Incentives FAQs
What if I am planning to add a solar system to a vacation home, rental property or commercial property? Will I still qualify for incentives?
While we recommend talking to your local solar installer and/or tax professional to better understand what solar incentives apply to you, many can be claimed on a second home, provided that it is in the United States and owned by you. There may be other incentives available for commercial properties specifically, depending on the specifics.
How can I learn if I qualify for specific solar incentives?
It's a good idea to talk to your local Hope solar installer for a better understanding of which incentives your project may qualify for. Typically, solar incentives apply to new solar systems installed on property you own (in the U.S.) within a specified date range. Some incentives, like those given by the state of Arkansas, may have additional requirements.
How much will a solar system save me annually on my electric bill in Hope?
After adding solar panels to your home in Hope, you can anticipate savings of approximately $923.02 per year, or approximately $17,537.34 over 20 years.
What are some of the environmental benefits of switching to solar energy?
You can reduce your carbon footprint by 350 pounds of CO2 a year by installing solar panels. This adds up to around 7,000 pounds over 20 years. Solar is also a renewable energy source, meaning that making the switch reduces the drain on our planet's resources.
How long until the federal solar tax credit ends?
The Clean Energy Credit (previously 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.
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.