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
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What Solar Tax Credits, Incentives, and Rebates are Available in Malvern?
Federal Residential Renewable Energy Tax Credit
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.
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
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