2023 Solar Incentives Guide for Lowell, AR - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Lowell.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2023 and beyond)
- Ways to optimize your solar investment
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Updated May 04, 2023
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What Solar Tax Credits, Incentives, and Rebates are Available in Lowell?
Federal Residential Renewable Energy Tax Credit
Source: https://www.dsireusa.org/
Solar incentives are meant to encourage homeowners to switch to renewable energy by offering incentives meant to lower the financial burden of solar panel installation and use. Various types of incentives, such as discounts, cash back or monthly utility bill credits, may be available to you. Some incentives may be offered by the Arkansas government, by your utility company or by county or municipality, while others are federal. You might qualify for any of the following types of solar incentives:
- Rebates: A solar rebate is a partial refund given after you've purchased your solar system. 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 tax credits are calculated.
- Net Metering: Net metering is an incentive you can get once your solar system is up and running. If you've signed a net metering agreement with your Lowell utility company, they will subtract the value of the excess energy your solar system produces from your utility bill each month. In some locations, this credit is dollar-for-dollar, while in other places you may be refunded a percentage of the value.
- Tax Credits: These credits are dollar-for-dollar reductions (not deductions) in how much income tax you owe the federal government.
- Tax Exemptions: Sales tax exemptions are applied at the point of sale for your solar panels. Property tax exemptions let you ignore the value added by your solar system when calculating the amount of property tax you need to pay on your house.
Federal Solar Incentives
When someone says "solar incentives," you likely think of federal incentives first. The solar incentive that you may be most familiar with is the Federal Solar Investment Tax Credit (ITC), which gives you a credit on your taxes equal to a predetermined percentage of your solar system's cost.
The ITC is applied to the total cost of solar panel installation, including the panels themselves as well as accessories, labor and equipment. This credit can be claimed for panels installed after January 1, 2006 on a primary or secondary residence located in the United States that you own. The tax credit ranges from 26-30% of total costs depending on when your project was completed. There is no maximum amount you can claim.
To more fully understand how the ITC may apply to your situation, get in touch with your local Lowell solar panel installation expert and ask for more information.
In August 2022, the Inflation Reduction Act made revisions to the ITC, now dubbed the Clean Energy Credit. The new Clean Energy Credit extends until 2035. You can now apply for a 30% credit for solar systems that began installation after January 1, 2022 and are completed by the end of 2032. This new credit will then be decreased by a few percentage points every year until the date of expiration. Starting in 2023, the expansion will also make credits for energy storage systems even easier to claim.
Click here to learn more about the new Inflation Reduction Act. To understand how the new Clean Energy Credit applies to you, reach out to your local Lowell solar installation company.
State & Local Solar Incentives
In addition to those provided at the federal level, there are often also state solar incentives. Rebates, tax credits and more can be offered at a more local level. Certain incentives are offered for only a limited time, while others are ongoing. Local solar incentives might come from your county or municipality, or from the Arkansas government.
Next Steps for Installing Solar in Lowell
The variety of solar incentives available has contributed greatly to the increase in the nationwide adoption of solar energy over the last 15 years. You might qualify for solar incentives from the Arkansas government, the federal government or your local utility company. Talking to your local Lowell solar panel installation company is an excellent first step towards making sure you get all the incentives you qualify for when you switch to solar energy.
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EcoWatch's Lowell, AR Solar Incentives FAQs
What if I am planning to add a solar system to a vacation home, rental property or commercial property? Do I still qualify for incentives?
Many solar incentives are intended to apply to a property you own that is located within the United States, and most secondary residences will fall into this category. Other solar incentives may be available for commercial properties, depending on the details. We recommend getting in touch with your local solar installer and/or tax professional to fully understand what incentives may apply to your specific situation.
If I already have a solar system installed on my house, can I still claim incentives?
If your solar system was installed after January 1, 2022, you may qualify for the newly increased 30% tax credit under the Inflation Reduction Act. If you installed your system between 2006 and 2021, you may qualify for a tax credit between 26% and 30%, depending on the year it was installed. Speaking with a representative from the company that installed your system, or any local Lowell solar installer, can help you learn more about what incentives you qualify for.
How much will solar panels save me annually on my electric bill in Lowell?
Typically, homeowners in Lowell who install solar panels save approximately $817.12 per year, or approximately $15,525.26 over 20 years after they make the switch.
Can I use multiple types of renewable energy to power my home?
You can power your home with multiple types of renewable energy, or a combination of renewable and non-renewable energy. Be sure to discuss your ideas with your local Lowell solar installation expert. They can help you as you plan for your project and give you an understanding of 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.