2024 Solar Incentives Guide for Hot Springs Village, AR - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Hot Springs Village.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2024 and beyond)
- Ways to optimize your solar investment
Solar installers are experts in maximizing your solar tax credits and rebates.
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What Solar Tax Credits, Incentives, and Rebates are Available in Hot Springs Village?
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Federal Residential Renewable Energy Tax Credit
Source: https://www.dsireusa.org/
Solar incentives help mitigate the cost of installing solar panels on your home. Financial incentives like these are in place to encourage more homeowners to convert their home partially or fully to renewable energy. Incentives could include things like discounts, cash back or credit on your utility bill each month. Some incentives are offered federally, while others are handled by the state of Arkansas or by your utility company, county or municipality. Categories of solar incentives include:
- Tax Credits: Tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the federal government. (This is different from a tax deduction.)
- Net Metering: Net metering becomes relevant once your solar panels are up and running. If you've signed a net metering agreement with your Hot Springs Village utility company, they will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some areas, this is a dollar-for-dollar credit, while in others you might receive a refund equivalent to a percentage of the value.
- Rebates: Solar companies may help you claim a rebate, or partial refund of your purchase, for your solar system. States or counties will also sometimes offer limited-time rebates. If you receive a rebate, that amount will usually be deducted from the total price before any tax credits are calculated.
- Tax Exemptions: Your solar panels could qualify for exemptions on both sales and property tax. Sales tax exemptions are effective at the time of purchase. Property tax exemptions let you exclude the value that solar panels add when you are calculating property taxes on your house.
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Federal Solar Incentives
Federal solar incentives are likely to be the first thing that comes to mind when you think about solar incentives. An incentive many people are probably familiar with is the Federal Solar Investment Tax Credit (ITC). This is a tax credit for a specified 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. The credit initially covered 30% of the total cost – for panels, accessories, labor and equipment – although it may range from 26-30%, depending on the installation date of your solar system. There is no cap on the amount you can claim.
Your local Hot Springs Village solar panel installation expert can give you more information about the ITC and how it applies to your situation.
The Inflation Reduction Act, passed in August 2022, added more provisions to the ITC (as well as retitling it the Clean Energy Credit). The Clean Energy Credit lasts until 2035. Your solar installation project undertaken between 2022 and 2032 may qualify for a 30% tax credit. The amount will decrease slightly on a yearly basis until the end of the current program. Beginning in 2023, it will also be easier to claim credits for energy storage systems with the new act.
More information about the new Inflation Reduction Act can be found here. The easiest way to fully understand how the new Clean Energy Credit applies to you is to speak with your local Hot Springs Village solar panel installers directly.
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. Some incentives are offered for only a limited time, while others are ongoing. These local incentives may come from the Arkansas government, or from your specific county or municipality.
Next Steps for Installing Solar in Hot Springs Village
Solar energy use nationwide has significantly increased in the past 15 years, in part thanks to the proliferation of solar incentives. You can obtain these incentives from the Arkansas government, the federal government or your local utility company. Speak with your local solar panel installer today to find out more information and to save as much money as possible on solar panels for your Hot Springs Village home.
EcoWatch's Hot Springs Village, AR Solar Incentives FAQs
If I installed solar panels on my house a few years ago, can I still claim incentives?
Your best bet is to talk to someone from the company that installed your solar system – or speak to a local Hot Springs Village solar installer — to clarify which incentives you might qualify for. If your system was installed after January 1, 2022, you likely qualify for the recently increased 30% tax credit under the Inflation Reduction Act. Systems installed between 2006 and 2021 may qualify for a tax credit of 26-30%.
How much will solar panels save me annually on my electric bill in Hot Springs Village?
On average, Hot Springs Village homeowners who install solar panels save around $888.51 per year, or about $16,881.72 over 20 years after they make the switch.
Can I claim incentives both towards the initial cost of solar panels, and later as reimbursement?
Yes, you can receive both rebates and tax credits towards the cost of solar panels. Depending on which incentives you are applying for, they may apply in a different order. Be sure to talk to your solar installer or a local tax professional to ensure that you are claiming incentives correctly and getting the most money possible.
Can I claim incentives for adding solar panels to a rental property, vacation home or commercial property?
While we recommend speaking with your local solar installer and/or tax professional to best understand what solar incentives apply to you, many will apply to 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.