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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By EcoWatch Local Advisors
Data Analysis: James Savino
Ranking Methodology: Karsten Neumeister
Updated March 14, 2023
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What Solar Tax Credits, Incentives, and Rebates are Available in Malvern?
Federal Residential Renewable Energy Tax Credit
The term "solar incentives" includes a range of financial incentives implemented to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. These incentives might include upfront discounts, cash back or monthly credits towards your utility bill. Some incentives are given by the federal government, some by the state of Arkansas and some by your specific utility company, county or municipality. Some broad categories of solar incentives include:
- Net Metering: You may be able to sign a net metering agreement with your Malvern 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 monthly utility bill.
- Tax Exemptions: Sales tax exemptions are applied at the time of purchase for your solar system. Property tax exemptions allow you to ignore the value that your solar panels add when you're calculating the amount of property tax you need to pay.
- Tax Credits: Tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the government. (This is different from a tax deduction.)
- Rebates: A rebate is a partial refund given after you've purchased your solar system. Rebates might be offered by your local utility company, your state or your county. The cash back that you get from the rebates is normally applied before calculating tax credits.
Federal Solar Incentives
Federal solar incentives are likely the first thing that comes to mind when thinking about solar incentives. The Federal Solar Investment Tax Credit, or ITC, is likely the most commonly known federal solar incentive. The ITC provides you with a tax credit for a predetermined percentage of your solar system's cost.
The ITC originally covered 30% of the total cost of solar panel installation, although that number has fluctuated slightly over the years between 26-30%. The percentage you qualify for will depend on when your solar system was installed. The total cost of installation includes the panels themselves as well as the cost of labor, accessories and equipment. There is no maximum claim amount. The ITC can be applied to solar panels installed after January 1, 2006 on your primary or secondary residence. The residence must be in the United States and owned by you.
Have questions about how the ITC applies to your specific situation? Contact your local Malvern solar panel installer to get more information.
The Inflation Reduction Act, passed in August 2022, made some changes to the ITC (as well as renaming it to the Clean Energy Credit). With the new provisions, solar installation projects started after January 1, 2022 and completed by the end of 2032 may be eligible for a 30% tax credit. This percentage will then see a slight annual decrease until the end of the current Clean Energy Credit in 2035. The program expansion also makes it easier to get credit for energy storage systems, starting in 2023.
Click here to learn more about the new Inflation Reduction Act. The best way to fully understand how the new Clean Energy Credit might apply to you is to speak with your local Malvern solar panel company directly.
State & Local Solar Incentives
In addition to those provided at the federal level, there are often also state solar incentives. Tax credits, rebates and more might be available at a more local level. Some incentives are ongoing, while others may only be available for a limited time. Incentives may be offered by the Arkansas government, or by your county or municipality.
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.
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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.