2025 Solar Incentives Guide for Malvern, AR - Tax Credits & Rebates

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

Source: https://www.dsireusa.org/

Solar incentives are designed to make renewable energy usage more affordable via financial incentives to help people install solar panels on their homes. Solar incentives could include upfront discounts, cash back or credit towards your monthly 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:

• Tax Exemptions: These may come in the form of property tax exemptions, which would allow you to ignore the value added by your solar panels when paying taxes on your home. You may also qualify for an exemption on sales tax at the time of purchase.
• Rebates: A solar rebate is a partial refund given after you've purchased your solar system. These might be offered by your local utility company, your county or your state. The cash back that you get from the rebates is normally applied before calculating tax credits.
• Net Metering: Net metering becomes relevant after your solar system is up and running. If you have a net metering agreement with your Malvern utility company, it will subtract the value of the excess energy your solar system produces from your utility bill each month. In some places, this credit is dollar-for-dollar, while in other places you may make back a percentage of the value.
• Tax Credits: Unlike tax deductions, tax credits reduce, dollar-for-dollar, the amount of income tax that you owe the government.

Federal Solar Incentives

When someone says "solar incentives," you probably think of federal incentives first. A federal incentive that most people are likely to be familiar with is the Federal Solar Investment Tax Credit (ITC). This is a tax credit for a given percentage of your solar system's cost.

The ITC can be applied to solar panels installed after January 1, 2006, on a primary or secondary residence that you own in the United States. Initially, the credit applied to 30% of the total cost – for panels, equipment, accessories and labor – although that amount may range from 26-30%, depending on when your solar system was installed. There is no cap on the amount you can claim.

Your local Malvern solar panel installer can give you more information about the ITC and how it may apply to your situation.

In August 2022, the ITC (now called the Clean Energy Credit) was expanded and extended by the passage of the Inflation Reduction Act. The Clean Energy Credit re-raises the credit up to 30% for solar systems installed between 2022 and 2032. At this point, the percentage will see a slight decrease annually until the end of the program in 2035. Starting in 2023, it will also be easier to qualify for credits for energy storage systems with the new act.

More information about the new Inflation Reduction Act can be found here. Your local Malvern solar panel company is the best resource for answering your questions about the new Clean Energy Credit and how it may apply to you.

State & Local Solar Incentives

There are more than just federal solar incentives; tax credits, rebates and more are often offered at the state and local level. Some incentives are ongoing, while others may only be available for a limited time. Incentives may be given 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 in the past 15 years has helped increase nationwide solar energy use enormously. Reaching out to your local Malvern solar panel installation company is a great first step towards getting all the incentives you qualify for when you switch to solar energy.