2023 Solar Incentives Guide for Sheridan, AR - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Sheridan.
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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What Solar Tax Credits, Incentives, and Rebates are Available in Sheridan?
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Federal Residential Renewable Energy Tax Credit
Solar incentives are meant to help mitigate the cost of installing a solar panel system on your home. These financial incentives are intended to encourage more Americans to switch to renewable energy. Different types of incentives, including discounts, cash back or credit towards your monthly utility bill, may be available to you. Certain incentives may be provided via the state of Arkansas, by your utility company or by county or municipality, while others are federal. You might qualify for any of the following types of solar incentives:
- Rebates: Rebates, or partial refunds after a purchase, are typically applied prior to any solar tax credits being calculated. Solar rebates may be given by your local utility company, by your state or by your county.
- Tax Credits: Different from tax deductions, tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the government.
- Net Metering: Net metering becomes relevant after your solar panels are up and running. If you have in place a net metering agreement with your Sheridan utility company, the company will subtract the value of the excess energy your solar system produces from your monthly utility bill. In some places, this is a dollar-for-dollar credit, while in others you might make back a percentage of the value.
- Tax Exemptions: Your solar panels might qualify for both sales tax and property tax exemptions. Sales tax exemptions come into effect at the time of purchase. Property tax exemptions allow you to ignore the value added by your solar panels when you are calculating property taxes on your home.
Federal Solar Incentives
When thinking about solar incentives, you likely think of federal incentives first. The solar incentive that you may be most familiar with is the Federal Solar Investment Tax Credit (ITC), which provides a credit on your taxes equal to a specified percentage of your solar system's cost.
The ITC can be applied to solar panels installed on your primary or secondary residence in the United States. The solar system must have been installed after January 1, 2006 on a property you own for you to claim the credit. Initially, the ITC applied to 30% of all costs (panels, accessories, equipment and labor), although this amount has fluctuated slightly over time between 26-30%. The amount you qualify for will depend on when your solar system was installed. There is no cap on the claim amount.
To better understand exactly how much money the ITC could save you, get in touch with your local Sheridan solar panel installer.
In August 2022, the Inflation Reduction Act laid out new provisions for the ITC, now titled the Clean Energy Credit. The Clean Energy Credit re-raises the credit up to 30% for solar installation projects started after January 1, 2022 and completed by the end of 2032. After this, the percentage will decrease slightly each year until the program expires in 2035. Beginning in 2023, it will also be easier to claim credits for energy storage systems under the new laws.
Click here to learn more about the new Inflation Reduction Act. Your local Sheridan solar panel installer can answer any questions you have and explain how the new Clean Energy Credit will apply to you.
State & Local Solar Incentives
There are more than just federal solar incentives; rebates, tax credits and more may be offered at the local or state level. Incentives may be given by the state of Arkansas, or by your county or municipality. Certain incentives are available for only a limited time, while others are ongoing.
Next Steps for Installing Solar in Sheridan
The expanding number of available solar incentives has contributed greatly to the increase in the nationwide adoption of solar energy over the past 15 years. You might qualify for solar incentives from the federal government, the Arkansas government or from your local utility company. If you're ready to make the change to solar energy, talking to your local Sheridan solar panel installation expert is an excellent place to start.
EcoWatch's Sheridan, AR Solar Incentives FAQs
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.