2025 Solar Incentives Guide for Paragould, AR - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Paragould.
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 Paragould?
Federal Residential Renewable Energy Tax Credit
Source: https://www.dsireusa.org/
The phrase "solar incentives" refers broadly to financial incentives that are in place to encourage increased use of renewable energy by making the installation and use of solar panels more affordable. Different types of incentives, like cash back, discounts or credit towards your monthly utility bill, might be available to you. Certain incentives may be handled by the Arkansas government, by your utility company or by county or municipality, while others are federal. Some solar incentives you might qualify for are:
- Net Metering: Net metering factors in once your solar panels are up and running. If you have a net metering agreement with your Paragould utility company, the company 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 get refunded a percentage of the value.
- Rebates: Solar companies may help you claim a rebate, or partial refund of your purchase, for your solar panels. States or counties will also offer limited-time rebates at various times. The value of a rebate will usually come off the total price before tax credits are calculated.
- Tax Exemptions: Tax exemptions may come in one of two forms. First, there is sales tax exemption, which is applied when you purchase solar panels. The second is property tax exemption, which allows you to exclude the value added by your solar system when paying property tax on your home.
- Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the government. (This is different from a tax deduction.)
Federal Solar Incentives
Federal solar incentives are likely to be the first thing that comes to mind when you think about solar incentives. The solar incentive that you're most likely to have heard of is the Federal Solar Investment Tax Credit (ITC), which provides a credit on your taxes equal to a certain percentage of your solar system's cost.
The ITC was originally for 30% of the cost of solar system installation, although it 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 installation cost includes the panels themselves as well as the cost of equipment, accessories and labor. 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.
To better understand exactly how much the ITC could save you, speak with your local Paragould solar panel installation expert.
In August 2022, the Inflation Reduction Act expanded and extended the ITC, now titled the Clean Energy Credit. With the new provisions, solar installation projects that are completed between 2022 and 2032, can qualify for a 30% tax credit. The amount of the credit will then decrease slightly each year until the current Clean Energy Credit expires in 2035. The expansion to the program also makes credits for energy storage systems even easier to claim, starting in 2023.
More information about the new Inflation Reduction Act can be found here. Your local Paragould solar panel installation expert is the best person to answer your questions about the new Clean Energy Credit and how it will apply to you.
State & Local Solar Incentives
Some solar incentives are often also provided by state and local governments. As with federal incentives, these might include rebates, tax credits and more. These incentives might be distributed by your county or municipality, or by the Arkansas government. Some are ongoing, while others are available for a limited time.
Next Steps for Installing Solar in Paragould
There are many types of solar incentives: those provided by the federal government, those given by the Arkansas government and those provided by local utility companies, to name a few. Solar energy use has grown tremendously in the last 15 years, thanks to these incentives. When you're ready to switch over to solar energy, reaching out to your local Paragould solar panel installation expert is an excellent place to start.
EcoWatch's Paragould, AR Solar Incentives FAQs
If I already have a solar system installed on my house, can I still claim incentives?
If your solar panels were installed after January 1, 2022, you may qualify for the newly increased 30% tax credit under the Inflation Reduction Act. If you had your system installed between 2006 and 2021, you may qualify for a tax credit between 26% and 30%, depending on the year it was installed. Speaking with a representative from the company that installed your system, or any local Paragould solar installer, can help you learn more about what incentives you can apply for.
How much will a solar system save me annually on my electric bill in Paragould?
Typically, homeowners in Paragould who install solar panels save around $871.44 per year, or approximately $16,557.29 over 20 years after they make the switch.
If I trade in my appliances for ones that use solar energy, are there credits that I can claim?
The new Inflation Reduction Act creates several new financial incentives that are available when you make eco-friendly improvements to your home. More details about these incentives, including information about incentives for purchasing new appliances, can be found here.
Can I receive 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 eligible for but in most cases yes, you can receive multiple types of incentives for your solar project. Speak to your solar installer or a local tax professional to make sure you are claiming all possible incentives and applying them in the correct order.
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.