2023 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 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 September 15, 2023
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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
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Solar incentives help mitigate the cost of installing a solar panel system on your home. This category of financial incentives is in place to encourage more homeowners to make the switch to renewable energy. Various kinds of incentives, including discounts, cash back or credit towards your monthly utility bill, may be available to you. Certain incentives may be handled by the Arkansas government, by your utility company or by county or municipality, while others are federal. Some solar incentives you might qualify for are:
- Tax Credits: Tax credits are dollar-for-dollar reductions (not deductions) in how much income tax you owe the government.
- Rebates: A rebate is a partial refund after the purchase of your solar panels. These may be offered by your local utility company, your county or your state. The discount that rebates offer is normally applied to the price of solar panels before calculating tax credits.
- Net Metering: You can sign a net metering contract with your Hot Springs Village utility company. This agreement may apply to all or a percentage of the excess electricity your solar panels generate. Your utility company will then deduct this value from your utility bill each month.
- Tax Exemptions: Tax exemptions can come in one of two forms. The first is sales tax exemption, applied when you purchase solar panels. The second is property tax exemption, which allows you to exclude the value added by your solar system when paying property tax on your house.
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Federal Solar Incentives
Federal incentives are the kind of incentives that you are most likely to have some familiarity with. You may have heard of the Federal Solar Investment Tax Credit, or ITC. This incentive is a tax credit that reduces your taxes by a specified percentage of the money you spend on solar panels for your home.
The ITC is applied to the total cost of installing a solar system, including the panels themselves as well as labor, equipment and accessories. This credit can be claimed for panels installed after January 1, 2006 on a primary or secondary residence that you own, as long as it is located in the United States. Originally set at 30% of total costs, the credit has fluctuated over time, and you may qualify for different amounts depending on when your project was completed. There is no maximum claim amount.
To understand exactly how much the ITC could save you, speak with your local Hot Springs Village solar panel installation expert.
The Inflation Reduction Act, passed in August 2022, made some changes to the ITC (as well as renaming it to the Clean Energy Credit). The new Clean Energy Credit extends until 2035. Homeowners are now eligible for a 30% credit for solar systems installed between January 1, 2022 and December 31, 2032. The total credit will then see a slight annual decrease until the date of expiration. The expansion to the program also makes it easier to get credit for energy storage systems, beginning in 2023.
Click here to learn more about the new Inflation Reduction Act. To understand how the new Clean Energy Credit might apply to you, talk to your local Hot Springs Village solar installers.
State & Local Solar Incentives
There are often state solar incentives available in addition to federal ones. Tax credits, rebates and more can be offered at a more local level. These solar incentives — which might be provided by the state of Arkansas, or by your county or municipality — could be offered for only a limited time, or on an ongoing basis.
Next Steps for Installing Solar in Hot Springs Village
Solar incentives might be offered by your local utility company, the federal government or the Arkansas government. The growing number of incentives available has contributed to a large increase in solar energy use in the last 15 years. Speak with your local solar panel installation expert today to learn more and to save the most money possible on a solar system for your Hot Springs Village home.
EcoWatch's Hot Springs Village, AR Solar Incentives FAQs
What if I want to add solar panels to a rental property, vacation home or commercial property? Can I still qualify for incentives?
While we recommend getting in touch with your local solar installer and/or tax professional to fully understand what solar incentives apply to you, many incentives apply to a second home, as long as it is in the United States and owned by you. There may be additional incentives available for commercial properties specifically, depending on the specifics.
I already have solar panels. Do I qualify for any incentives?
You should plan to talk to the company that installed your solar panels — or call a local Hot Springs Village solar installer — to learn about which incentives you may qualify for. If your solar panels were installed after January 1, 2022, you likely qualify for the newly increased 30% tax credit under the Inflation Reduction Act. Solar panels installed between 2006 and 2021 may qualify for a tax credit of 26-30%.
How much will a solar system save me on my electric bill in Hot Springs Village annually?
When you add solar panels to your house in Hot Springs Village, you can expect to save about $888.51 per year, or about $16,881.72 over the next 20 years.
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 reduce your home's CO2 emissions by 350 pounds a year, or around 7,000 pounds in 20 years.
Can I receive incentives both towards the initial cost of solar panels, and later as reimbursement?
The order that incentives will be applied in may vary depending on which incentives you are eligible for but in most cases yes, you can claim multiple types of incentives for your solar project. Speak to your solar installer or a local tax professional to ensure you are claiming all the incentives you are eligible for and applying them in the correct order.
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.