2023 Solar Incentives Guide for Little Rock, AR - Tax Credits & Rebates

In this guide, we'll cover the latest solar incentives and rebates available in Little Rock.

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.
Get a free quote from one of our trusted Little Rock solar installers to see how much you can save.

By EcoWatch Local Advisors

Data Analysis: James Savino

Ranking Methodology: Karsten Neumeister

Updated January 20, 2023

Why you can trust EcoWatch

We work with a panel of solar experts to create unbiased reviews that empower you to make the right choice for your home. No other site has covered renewables as long as us, which means we have more data and insider information than other sites. Our rankings are never affected by revenue or partnerships.

What Solar Tax Credits, Incentives, and Rebates are Available in Little Rock?

First Electric Cooperative - Home Improvement Loans

Incentive Type:
Loan Program
$500- $15,000

Federal Residential Renewable Energy Tax Credit

Incentive Type:
Personal Tax Credit
30% federal tax credit for systems placed in service after 12/31/2021 and before 01/01/2033. Good for: solar water heat, solar photovoltaics, biomass, geothermal heat pumps, wind (small), fuel cells using renewable fuels.

Source: https://www.dsireusa.org/


Solar incentives are designed to mitigate the cost of installing a solar panel system on your home. This category of financial incentives is in place to encourage more people to switch their home over to renewable energy. Solar incentives can include cash back, upfront discounts or monthly credits towards your utility bill. Some incentives are offered by the federal government, some by the Arkansas government and some by your utility company, county or municipality. Types of solar incentives might include:

  • Tax Exemptions: Your solar system might qualify for exemptions on both sales and property tax. Sales tax exemptions come into effect at the time of purchase. Property tax exemptions allow you to ignore the value added by your solar panels when calculating property taxes on your home.
  • Rebates: A rebate is a partial refund after the purchase of your solar system. Rebates 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 Credits: Tax credits decrease, dollar-for-dollar, how much income tax you owe the government. Tax credits are different from tax deductions.
  • Net Metering: You may be able to sign a net metering contract with your Little Rock 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.

Federal Solar Incentives

Federal solar incentives are probably the first thing that you think of when thinking about solar incentives. The Federal Solar Investment Tax Credit, or ITC, is the best-known federal solar incentive. The ITC allows you to claim a tax credit for a predetermined 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 that you own in the United States. Originally, the tax credit was for 30% of the total cost — for panels, accessories, equipment and labor — although it may range from 26-30%, depending on when your solar system was installed. There is no cap on the claim amount.

To better understand exactly how much the ITC could save you, get in touch with your local Little Rock solar panel installer.

The ITC was both renewed and expanded by the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. The Clean Energy Credit is valid until 2035. Solar installation projects started after January 1, 2022 and completed by the end of 2032 may qualify for a 30% tax credit; the amount will be decreased slightly each year until the current program ends. Starting in 2023, it will also be easier to obtain credits for energy storage systems under this new program.

Click here to learn more about the new Inflation Reduction Act. Your local Little Rock solar panel company can answer your questions and explain how the new Clean Energy Credit applies to you.

State & Local Solar Incentives

Some solar incentives are often also provided at the state and local level. Similar to federal incentives, these may include rebates, tax credits and more. These incentives might be handled by the Arkansas government, or by your county or municipality. Some incentives may be ongoing, while others are available for a limited time.

Next Steps for Installing Solar in Little Rock

You can apply for and receive solar incentives from the federal government and the Arkansas government, as well as from your local utility company. Growing availability of solar initiatives in the past 15 years has helped greatly increase nationwide adoption of solar energy. Talking to your local Little Rock solar panel installer is the right first step towards getting the most money possible when you switch to solar energy.

Best National Provider

SunPower

★★★★★
5.0

  • Most efficient panels on the market
  • National coverage
  • Cradle to Cradle sustainability certification
  • Great warranty coverage
  • Expensive
  • Customer service varies by local dealer

Best Technology

Tesla Energy

★★★★★
4.5

  • Price-match guarantee
  • Sleek, efficient, and durable solar panels
  • Best solar battery on the market
  • Some reported issues with customer service
  • Customer service varies by local dealer

Best Warranty Coverage

Sunpro Solar

★★★★★
4.0

  • Industry-leading warranty coverage
  • Expansive service area
  • Some reported communication issues
  • No leases or PPAs

EcoWatch's Little Rock, AR Solar Incentives FAQs

My home already has solar panels. Are there any incentives that I qualify for?

Your best bet is to talk to a representative from the company that installed your system — or reach out to a local Little Rock solar installer — to learn about which incentives you may qualify for. If your system was installed after January 1, 2022, you likely qualify for the newly increased 30% tax credit under the Inflation Reduction Act. Solar systems installed between 2006 and 2021 may qualify for a tax credit of 26-30%.

Who installs solar panels near me?

To find the right solar panel installer for you, check out our guide to Little Rock's best solar panel companies.

What are some environmental benefits of installing solar panels on my house?

You can decrease your carbon footprint by 350 pounds of CO2 a year by installing solar panels. This adds up to roughly 7,000 pounds over 20 years. Solar is also a renewable energy source, which means that switching your home over reduces the drain on our planet's resources.

Can I apply for incentives both towards the up-front cost of solar panels, and later as reimbursement?

Yes, you can claim both tax credits and rebates towards the cost of your solar panels. Depending on which incentives you are applying for, they may apply in a different order. Be sure to speak with your solar installer or a local tax professional to verify that you are claiming incentives correctly and that you're getting the most money you can.

Can I use a combination of multiple types of renewable energy to power my home?

Yes, you can utilize multiple types of renewable energy to power your home, such as a combination of solar and wind power. You can also combine renewable energy generation with a backup source of non-renewable energy. Be sure to discuss your proposed plan with your local Little Rock solar installation expert, to get an understanding of what will be needed and what kinds of incentives you will or won't 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.

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