2024 Solar Incentives Guide for Hot Springs, AR - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Hot Springs.
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 Hot Springs?
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Federal Residential Renewable Energy Tax Credit
Source: https://www.dsireusa.org/
The term "solar incentives" generally refers to financial incentives implemented by the government and by solar companies to encourage increased use of renewable energy by making solar panels more affordable. You might be eligible for several types of incentives, including 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:
- Net Metering: Make sure you speak with your Hot Springs utility company about signing a net metering agreement. This allows you to receive credit towards your utility bill every month for the value of excess energy your solar panels generate. You might receive either a dollar-for-dollar credit or a percentage of the value.
- Rebates: Some solar companies will help you claim a rebate, or partial refund after purchase, for your solar system. Counties or states will also offer limited-time rebates at various times. Any rebates you receive will usually be deducted from your total price before any tax credits are calculated.
- Tax Exemptions: Sales tax exemptions are applied at the time of purchase for your solar panels. Property tax exemptions let you ignore the added value of your solar system when you calculate how much property tax you need to pay on your home.
- 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.)
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Federal Solar Incentives
Federal incentives are the type of incentives that you are most likely to have some knowledge of. The Federal Solar Investment Tax Credit, or ITC, is likely the most well-known federal solar incentive. The ITC offers a tax credit for a set percentage of the cost of your solar system.
The ITC can be applied to 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, equipment and accessories. This credit can be claimed on solar panels 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 the amount you can claim may range between 26-30%. There is no maximum amount you can claim.
Contacting your local Hot Springs solar panel installation expert is the best way to understand how the ITC applies to you.
The ITC was renewed and increased in scope after the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. With the new provisions, solar installation projects started after January 1, 2022, and completed by the end of 2032, may be eligible for a 30% tax credit. This credit amount will then see a slight annual decrease until the end of the current Clean Energy Credit in 2035. Starting in 2023, it will also be easier to obtain credits for energy storage systems under the new laws.
More information about the new Inflation Reduction Act can be found here. The best way to understand how the new Clean Energy Credit might apply to you is to talk with your local Hot Springs solar panel company.
State & Local Solar Incentives
Federal solar incentives are not your only option; tax credits, rebates and more might also be offered at the local or state level. Incentives might be provided by your county or municipality, or by the state of Arkansas. Some incentives may be available for only a limited time, while others are ongoing.
Next Steps for Installing Solar in Hot Springs
You can apply for solar incentives from the federal government and the Arkansas government, as well as from your local utility company. Growing availability of solar initiatives over the last 15 years has helped greatly increase nationwide adoption of solar energy. Call your local solar panel installation company today to discover more about the various programs and to save the most money possible on solar panels for your Hot Springs home.
EcoWatch's Hot Springs, AR Solar Incentives FAQs
How do I learn if I qualify for solar incentives?
In most cases, solar incentives apply to:
- a new solar panel system
- installed on property you own
- within the U.S.
- between the dates specified by a particular incentive.
Specific incentives, including those run by the Arkansas government or by your county/municipality, could have additional qualifications. Get in touch with your local Hot Springs solar installer to learn more about what incentives your project will qualify for.
Who installs solar panels near me?
To learn about the best solar panel installers near you, take a look at our article on the best solar companies in Hot Springs.
What are some environmental benefits of installing solar panels on my home?
Solar energy is renewable — by changing where you get your energy, you can help reduce the strain on our planet's resources. You can also lower your home's CO2 emissions by 350 pounds annually, or around 7,000 pounds in 20 years.
If I switch my appliances out for ones that use solar energy, are there credits I can claim?
The new Inflation Reduction Act includes provisions for a number of incentives designed to reward homeowners who make eco-friendly upgrades. Some of these incentives include tax credits and rebates for installing new electric appliances. You can find more details about these incentives here.
Can I claim incentives for adding solar panels to a rental property, vacation home or commercial property?
While we recommend getting in touch with your local solar installer and/or tax professional to best understand what solar incentives apply to you, many incentives can be claimed on a second home, so long as that home is in the United States and owned by you. There may be additional incentives available for commercial properties specifically, depending on the details.
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.