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.
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Updated September 15, 2023
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What Solar Tax Credits, Incentives, and Rebates are Available in Little Rock?
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Federal Residential Renewable Energy Tax Credit
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The phrase "solar incentives" refers to 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. Various kinds of incentives, including discounts, cash back or monthly utility bill credits, might be available to you. Certain incentives may be provided via the Arkansas government, by your utility company or by county or municipality, while others are federal. Some solar incentives you might qualify for are:
- Rebates: A solar rebate is a partial refund credited to your account after you've paid for your solar panels. Rebates might be offered by your local utility company, your state or your county. The discount that rebates offer is normally applied to the price of solar panels before calculating tax credits.
- Tax Exemptions: Sales tax exemptions are applied at the point of sale for your solar panels. Property tax exemptions let you exclude the value that your solar panels add when calculating the amount of property tax you need to pay on your home.
- 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.
- Tax Credits: These credits are dollar-for-dollar reductions (not deductions) in how much in taxes you owe the federal government.
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Federal Solar Incentives
When you hear the term "solar incentives," federal incentives are likely the first thing that comes to mind. An incentive that most people are likely familiar with is the Federal Solar Investment Tax Credit (ITC). This is a tax credit for a specific percentage of your solar system's cost.
The ITC can be applied to solar panels installed on your primary or secondary residence in the United States. The solar panels have to have been installed after January 1, 2006 on a property you own for you to be eligible for the credit. The ITC originally paid out 30% of all system costs (panels, accessories, equipment and labor), although the total amount has fluctuated over the years between 26-30%. The amount you qualify for will depend on when your solar system was installed. There is no cap on the amount you can claim.
To know exactly how much money the ITC could save you, contact your local Little Rock solar panel installation expert.
The Inflation Reduction Act, passed in August 2022, expanded and extended the ITC (as well as renaming it to the Clean Energy Credit). Homeowners are now eligible for a credit equal to 30% of the total costs of solar system installation for projects that began after January 1, 2022 and will be finished by the end of 2032. This percentage will then begin to decrease annually until the Clean Energy Credit ends in 2035. Starting in 2023, it will also be easier to get credits for energy storage systems under the new laws.
More information about the new Inflation Reduction Act can be found here. 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
Rebates, tax credits and more might be provided at multiple levels. In addition to federal solar incentives, there are often state and local ones, too. Incentives might be handled 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 Little Rock
Nationwide solar energy use has gone up significantly in the last 15 years, in part thanks to the increase in availability of solar incentives. You may get these incentives from the Arkansas government, the federal government or your local utility company. Your local Little Rock solar panel installer can give you more information about which incentives you can apply for, and get you on track to switch to renewable energy today.
EcoWatch's Little Rock, AR Solar Incentives FAQs
How do I learn if I qualify for solar incentives?
Generally, solar incentives apply to:
- a new solar panel system
- installed on property that you own
- within the U.S.
- between the dates specified by a particular incentive.
Specific incentives, including ones handled by the Arkansas government or by your county/municipality, may have additional qualifications. Speak with your local Little Rock solar installer to find out what incentives your project will qualify for.
How much can I save annually on my electric bill if I add solar panels to my house in Little Rock?
After adding solar panels to your house in Little Rock, you can expect to save approximately $896.08 per year, or approximately $17,025.55 over 20 years.
When does the federal solar tax credit end?
The Clean Energy Credit (formerly called the federal solar tax credit, or the 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.
I want to change out my appliances for ones that are more energy-efficient. Are there any incentives I can get?
The new Inflation Reduction Act introduces several incentives that reward homeowners for making 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 use solar and another type of renewable energy in combination to power my home?
You can use multiple types of renewable energy, or a combination of renewable and non-renewable energy, to power your home. Make sure you go over your plan with your local Little Rock solar installer. They can help you with the plan for your project and educate you on the various incentives that you may or may 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.