2023 Solar Incentives Guide for Magnolia, AR - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Magnolia.
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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What Solar Tax Credits, Incentives, and Rebates are Available in Magnolia?
Federal Residential Renewable Energy Tax Credit
Solar incentives mitigate the cost of installing solar panels on your home. These financial incentives are intended to encourage more people to make the switch to renewable energy. Various kinds of incentives, such as cash back, discounts or monthly utility bill credits, may be available to you. Certain incentives may be provided via the Arkansas government, by your utility company or by county or municipality, while other incentives are federal. Types of solar incentives might include:
- Net Metering: Don't forget to talk to your Magnolia utility company about signing a net metering contract. This will allow you to get a credit towards your utility bill every month for the value of excess energy your solar panels generate. You could receive either a dollar-for-dollar credit or a percentage of the value.
- Tax Credits: Different from tax deductions, tax credits reduce, dollar-for-dollar, the amount of income tax that you owe the government.
- Rebates: Solar rebates might be offered by your state or county, or by your local utility company. These rebates are essentially cash back that is applied after your purchase of a solar system and before tax credits are calculated.
- Tax Exemptions: Your solar panel system might qualify for exemptions on both sales and property tax. Sales tax exemptions are applied at the time of purchase. Property tax exemptions let you exclude the added value of the solar panels when you are calculating property taxes on your home.
Federal Solar Incentives
Federal incentives are the kind of incentives that you are most likely to have some knowledge of. You've likely heard of the Federal Solar Investment Tax Credit, or ITC. This 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 covers solar systems installed after January 1, 2006 and lets you deduct from your taxes a percentage of the total cost of solar panels, labor, accessories and equipment. This credit can be claimed on a solar panel system installed on a primary or secondary residence that you own in the United States. The original claim amount was 30% of the total cost, although the amount you can claim may range between 26-30%. There is no maximum amount you can claim.
To better understand how the ITC might apply to you, call your local Magnolia solar panel installer and ask for more information.
The ITC has been renewed and expanded following the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. The Clean Energy Credit has increased the current credit up to 30% for solar installation projects started after January 1, 2022 and completed by the end of 2032. At this point, the credit percentage will be reduced slightly each year until the program expires in 2035. Starting in 2023, the expansion will also make it easier to get credit for energy storage systems.
More information about the new Inflation Reduction Act can be found here. To fully understand how the new Clean Energy Credit might apply to you, reach out to your local Magnolia solar installation company.
State & Local Solar Incentives
Some solar incentives may be offered at the local or state level. Like with federal incentives, these may include tax credits, rebates and more. Some incentives are ongoing, while others are only available for a limited time. Solar incentives may be given by the Arkansas government, or by your county or municipality.
Next Steps for Installing Solar in Magnolia
The nationwide use of solar energy has gone up tremendously in the last 15 years, in part due to the increase in availability of solar incentives. You may get these incentives from your local utility company, the Arkansas government or the federal government. Call your local solar panel installer today to find out more information and to save as much money as possible on solar panels for your Magnolia home.
EcoWatch's Magnolia, AR Solar Incentives FAQs
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