2024 Solar Incentives Guide for Magnolia, AR - Tax Credits & Rebates

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

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The term "solar incentives" generally refers to financial incentives that are in place to encourage the adoption and use renewable energy by making solar panels more affordable. You might qualify for different kinds of incentives, such as cash back, discounts or credit towards your monthly utility bill, depending on your situation. Certain incentives come from your specific utility company, county or municipality, some from the Arkansas government and others from the federal government. Some broad categories of solar incentives include:

• Tax Credits: Tax credits reduce, dollar-for-dollar, the total amount of tax you owe the government. Tax credits are different from tax deductions.
• Rebates: Solar rebates may be provided by your local utility company, or by your state or county. These rebates are essentially cash back that is applied after you purchase a solar system and before tax credits are calculated.
• Net Metering: You can sign a net metering contract with your Magnolia 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 may come in two forms. First, there is sales tax exemption, which is applied at the time you purchase your solar panels. The second is property tax exemption, which allows you to ignore the value added by your solar system when paying property tax on your home.

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Federal Solar Incentives

Federal solar incentives are likely the first thing that comes to mind when thinking about solar incentives. A federal incentive many 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 applies to the total cost of solar system installation, including the panels themselves as well as equipment, labor 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. From its original value of 30% of the total cost, the credit has fluctuated slightly between 26-30%, and you may qualify for varying percentages depending on when your project was completed. There is no maximum amount you can claim.

Contacting your local Magnolia solar panel installer is the best way to understand how the ITC could apply to your situation.

In August 2022, the Inflation Reduction Act laid out new provisions for the ITC, now referred to as 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. The credit will then decrease annually until the date of expiration. Beginning in 2023, it will also be easier to qualify for credits for energy storage systems under this new program.

Click here to learn more about the new Inflation Reduction Act. Your local Magnolia solar panel company is the best resource for answering your questions regarding the new Clean Energy Credit and how it will apply to you.

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 might be available at a more local level. Certain incentives are ongoing, while others might only be available for a limited time. They may be given by the Arkansas government, or by your county or municipality.

Next Steps for Installing Solar in Magnolia

Solar incentives may come from your local utility company, the federal government or the Arkansas government. The variety of available solar incentives has contributed to a large increase in solar energy use in the last 15 years. When you're prepared to make the switch to solar energy, talking to your local Magnolia solar panel installation expert is an excellent place to start.