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
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What Solar Tax Credits, Incentives, and Rebates are Available in Hope?
Federal Residential Renewable Energy Tax Credit
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.
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
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