2023 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 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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By EcoWatch Local Advisors
Data Analysis: James Savino
Ranking Methodology: Karsten Neumeister
Updated March 14, 2023
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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
The phrase "solar incentives" covers a range of financial incentives put in place to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. Incentives can include things like discounts, cash back or credit towards your monthly utility bill. Some incentives are provided by the federal government, while others are handled by the state of Arkansas or your specific utility company, county or municipality. You might qualify for any of the following types of solar incentives:
- Rebates: A rebate is a partial refund credited to your account after you've paid for your solar panels. These might be offered by your local utility company, your county or your state. The cash back that you get from the rebates is normally applied before tax credits are calculated.
- Tax Exemptions: Sales tax exemptions are applied at the time of purchase for your solar system. Property tax exemptions let you ignore the value added by your solar system when you're calculating how much property tax you need to pay on your house.
- Net Metering: Net metering is an incentive you can get after your solar panels are up and running. If you have a net metering agreement with your Hot Springs utility company, they will subtract the value of the excess energy your solar system produces from your monthly utility bill. In some areas, this credit is dollar-for-dollar, while in others you might be refunded a percentage of the value.
- Tax Credits: Tax credits are dollar-for-dollar reductions (not deductions) in the amount of tax that you owe the government.
Federal Solar Incentives
When thinking about solar incentives, federal incentives are likely the first thing that comes to mind. You've likely heard of the Federal Solar Investment Tax Credit, or ITC. This incentive is a tax credit that reduces your taxes by a predetermined percentage of the money you spend installing solar panels.
The ITC applies towards solar systems installed after January 1, 2006 and lets you deduct from your taxes a percentage of the total cost of solar panels, equipment, labor and accessories. You can claim this credit for solar panels installed on a primary or secondary residence in the United States that you own. The original claim amount 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 how the ITC might apply to your situation, contact your local Hot Springs solar panel installer and ask for more information.
In August 2022, the Inflation Reduction Act made revisions to the ITC, now called the Clean Energy Credit. The Clean Energy Credit bolsters the current credit, increasing it up to 30% for solar installations undertaken between January 1, 2022 and December 31, 2032. After this, the percentage will see a slight decrease annually until the program expires in 2035. Starting in 2023, the program expansion will also make claiming credit for energy storage systems easier than ever before.
Click here to learn more about the new Inflation Reduction Act. To best understand how the new Clean Energy Credit applies to you, talk to your local Hot Springs solar installation company.
State & Local Solar Incentives
Federal solar incentives are not your only option; tax credits, rebates and more are often offered at the state and local level. These incentives — which may be handled by the state of Arkansas, or by your county or municipality — might be offered on an ongoing basis, or for only a limited time.
Next Steps for Installing Solar in Hot Springs
There are a variety 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, thanks to these incentives. Your local Hot Springs solar panel installer can help you learn more about which incentives you might qualify for, and get you feeling good about making the change to renewable energy today.
- Price-match guarantee
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- Customer service varies by local dealer
Best Warranty Coverage
- Industry-leading warranty coverage
- Expansive service area
- Some reported communication issues
- No leases or PPAs
EcoWatch's Hot Springs, AR Solar Incentives FAQs
I already have solar panels installed. Are there any incentives that I qualify for?
If your solar panels were installed after January 1, 2022, you may qualify for the recently increased 30% tax credit under the Inflation Reduction Act. If you had your system installed between 2006 and 2021, you may qualify for a tax credit between 26% and 30%, depending on the year it was installed. Talking to the company that installed your solar system, or any local Hot Springs solar installer, can help you learn more about what incentives you qualify for.
When does the federal solar tax credit end?
The Clean Energy Credit (formerly named the federal solar tax credit, or ITC), is slated to end on January 1, 2035. Currently set at 30%, the credit will drop to 26% in 2033 and to 22% in 2034.
If I switch my appliances out for ones that can utilize solar energy, are there any benefits I can claim?
The new Inflation Reduction Act creates several new financial incentives that are available when you make eco-friendly improvements to your home. More details on these incentives, including information about incentives for purchasing new appliances, can be found here.
Can I claim incentives both towards the initial cost of solar panels, and later as reimbursement?
Yes, you can receive both tax credits and rebates towards the cost of your solar panels. Depending on which incentives you are eligible for, they may apply in a different order. Be sure to talk to your solar installer or a local tax professional to confirm that you are claiming incentives correctly and getting the most money you can.
Can I use solar and another type of renewable energy in combination to power my home?
Yes, you can use multiple types of renewable energy to power your home, such as a combination of solar and geothermal. You can also combine renewable energy generation with a backup source of non-renewable energy. Make sure that you discuss your proposed plan with your local Hot Springs solar panel installer, so that you understand what you'll need and what types of incentives you might or might not qualify for.
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.