2024 Solar Incentives Guide for North Little Rock, AR - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in North Little Rock.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2024 and beyond)
- Ways to optimize your solar investment
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What Solar Tax Credits, Incentives, and Rebates are Available in North Little Rock?
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Federal Residential Renewable Energy Tax Credit
Source: https://www.dsireusa.org/
The term "solar incentives" refers to a range of financial incentives put in place to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. You may qualify for various kinds of incentives, such as cash back, discounts or monthly utility bill credits, depending on your situation. Certain incentives come from your specific utility company, county or municipality, some from the state of Arkansas and others from the federal government. Some solar incentives you might qualify for are:
- Tax Exemptions: Tax exemptions can come in one of 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. This allows you to ignore the added value of your solar system when calculating property tax for your house.
- Net Metering: Net metering factors in once your solar panels are up and running. If you have a net metering agreement with your North Little Rock utility company, it will subtract the value of the excess energy your solar system produces from your utility bill each month. In some areas, this is a dollar-for-dollar credit, while in others you may receive a refund equivalent to a percentage of the value.
- Tax Credits: These credits are dollar-for-dollar reductions (not deductions) in how much income tax you owe the federal government.
- Rebates: Solar rebates might be provided by your state or county, or by your local utility company. These rebates are essentially partial refunds that are applied after your purchase of a solar system and before tax credits are calculated.
Federal Solar Incentives
Federal incentives are the kind of incentives that you are most likely to have some knowledge of. You may have heard of the Federal Solar Investment Tax Credit, or ITC. This incentive is a tax credit that reduces your taxes by a specified percentage of the money you spend on your solar system.
The ITC applies towards solar systems installed after January 1, 2006, and lets you deduct from your taxes a percentage of the total cost of solar panels, labor, accessories and equipment. You can claim this credit for solar panels installed on a primary or secondary residence in the United States that you own. Originally, you could claim 30% of the total cost, although the amount you can claim may range between 26-30%. There is no maximum claim amount.
To better understand exactly how much money the ITC could save you, contact your local North Little Rock solar panel installation expert.
The Inflation Reduction Act, passed in August 2022, added more provisions to the ITC (as well as retitling it the Clean Energy Credit). The new Clean Energy Credit extends until 2035. You are now eligible 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 be decreased by a few percentage points every year until its expiration. The expansion also makes credits for energy storage systems even easier to claim, beginning in 2023.
Click here to learn more about the new Inflation Reduction Act. The easiest way to understand how the new Clean Energy Credit might apply to you is to speak with your local North Little Rock solar panel installers directly.
State & Local Solar Incentives
Some solar incentives are often also provided by state and local governments. Similar to federal incentives, these might include rebates, tax credits and more. Certain incentives are ongoing, while others are available for a limited time. Solar incentives may be provided by the Arkansas government, or by your county or municipality.
Next Steps for Installing Solar in North Little Rock
Solar incentives might come from your local utility company, the Arkansas government or the federal government. The variety of incentives available has contributed to a large increase in solar energy use in the last 15 years. We suggest talking to your local North Little Rock solar installation expert to learn more about these incentives and to be sure that you're getting all the money you can for your solar panels.
EcoWatch's North Little Rock, AR Solar Incentives FAQs
What are some environmental benefits of installing solar panels on my home?
Solar energy is renewable — by switching where you get your energy, you help reduce the strain on our planet's resources. A solar system can also reduce the CO2 emissions from your home by 350 pounds yearly, or roughly 7,000 pounds over 20 years.
When does the federal solar tax credit end?
The federal solar tax credit, previously called the ITC and now named the Clean Energy Credit, is slated 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.
Can I qualify for incentives both towards the initial cost of solar panels, and later as reimbursement?
The order that incentives will be applied in may vary depending on which incentives you are claiming but in most cases yes, you can claim multiple types of incentives for your solar project. Talk with your solar installer or a local tax professional to verify you are claiming all the incentives you qualify for and applying them in the correct order.
Can I use a combination of multiple types of renewable energy to power my home?
You can use multiple types of renewable energy, or a combination of renewable and non-renewable energy, to power your home. Be sure to go over your ideas with your local North Little Rock solar installer. They can help you with the plan for your project and educate you on the various incentives that you will or won't qualify for.
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.