2023 Solar Incentives Guide for Malvern, AR - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Malvern.
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 Malvern?
Federal Residential Renewable Energy Tax Credit
Source: https://www.dsireusa.org/
Solar incentives are intended to make renewable energy usage more affordable via financial incentives to help people install solar panels on their homes. You may be eligible for various kinds of incentives, such as discounts, cash back or monthly utility bill credits, depending on your situation. Some incentives come from your specific utility company, county or municipality, some from the state of Arkansas and others from the federal government. You might qualify for any of the following types of solar incentives:
- Net Metering: Net metering becomes relevant once your solar system is up and running. If you have a net metering agreement with your Malvern 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 others you may receive a refund equivalent to a percentage of the value.
- Tax Credits: Tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the government. (A tax credit is different from a tax deduction.)
- Rebates: Rebates, or partial refunds after a purchase, are normally applied before any solar tax credits are calculated. Rebates may be offered by your local utility company, by your state or by your county.
- Tax Exemptions: These might come in the form of property tax exemptions, which can let you exclude the value of your solar system when paying taxes on your house. You may also qualify for an exemption on sales tax at the time of purchase.
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Federal Solar Incentives
Federal solar incentives are likely the first thing that you think of when thinking about solar incentives. The Federal Solar Investment Tax Credit, or ITC, is likely the most well-known federal solar incentive. The ITC allows you to claim a tax credit for a set percentage of your solar system's cost.
The ITC applies to the total cost of installing solar panels, including the panels themselves as well as labor, accessories 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. Originally set at 30% of total costs, the credit has fluctuated over time, and you may qualify for different amounts depending on when your project was completed. There is no maximum claim amount.
To better understand exactly how much the ITC could save you, talk to your local Malvern solar panel installer.
The Inflation Reduction Act, passed in August 2022, expanded and extended the ITC (as well as retitling it the Clean Energy Credit). The Clean Energy Credit re-raises the credit up to 30% for solar systems installed between 2022 and 2032. After this, the credit percentage will decrease slightly each year until the program expires in 2035. The expansion also makes claiming credit for energy storage systems easier than ever before, starting in 2023.
More information about the new Inflation Reduction Act can be found here. Your local Malvern solar panel company can answer your questions and explain how the new Clean Energy Credit will apply to you.
State & Local Solar Incentives
In addition to federal solar incentives, there are often also state ones. Tax credits, rebates and more can be offered at a more local level. These solar incentives — which may be given by your county or municipality, or by the state of Arkansas — might be offered for only a limited time, or on an ongoing basis.
Next Steps for Installing Solar in Malvern
You can receive solar incentives from the federal government and the Arkansas government, as well as from your local utility company. Growing availability of solar initiatives over the last 15 years has helped increase solar adoption nationwide. When you're prepared to make the switch to solar energy, talking to your local Malvern solar panel installation expert is an excellent place to start.
EcoWatch's Malvern, AR Solar Incentives FAQs
How much will solar panels save me on my electric bill in Malvern annually?
Once you add solar panels to your house in Malvern, you can expect to save about $961.33 per year, or about $18,265.26 over 20 years.
Who installs solar panels near me?
To learn about the best solar panel installers near you, take a look at our article on the best solar companies in Malvern.
When does the federal solar tax credit end?
The federal solar tax credit, formerly known as the ITC and now titled the Clean Energy Credit, is scheduled to end on January 1, 2035. The current 30% credit will end in 2032, replaced by a 26% credit in 2033 and a 22% credit in 2034.
If I change out my appliances for ones that utilize solar energy, are there credits I can claim?
The recently passed Inflation Reduction Act introduces several incentives designed to 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 claim 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 precisely which incentives you are applying for, they may apply in a different order. Make sure that you speak with your solar installer or a local tax professional to ensure that you are claiming the correct incentives and getting the most money you can.
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.