2024 Solar Incentives Guide for Sherwood, AR - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Sherwood.
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 Sherwood?
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Federal Residential Renewable Energy Tax Credit
Source: https://www.dsireusa.org/
Solar incentives are designed to mitigate the cost of installing a solar panel system on your home. This category of financial incentives is in place to encourage more Americans to make the switch to renewable energy. Solar incentives might include upfront discounts, cash back or credit towards your monthly utility bill. Some incentives are offered by the federal government, some by the Arkansas government and some by your utility company, county or municipality. Categories of solar incentives include:
- Rebates: Solar rebates may be offered by your county or state, or by your local utility company. These rebates work as partial refunds that are applied after you pay for solar panels and before tax credits are calculated.
- Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the federal government. (A tax credit is different from a tax deduction.)
- Net Metering: You may be able to sign a net metering agreement with your Sherwood utility company. This agreement may apply to all or a percentage of the excess electricity that is generated by your solar panels. Your utility company will then subtract this value from your utility bill each month.
- Tax Exemptions: Your solar system could qualify for exemptions on both sales and property tax. Sales tax exemptions come into effect at the time of purchase. Property tax exemptions let you ignore the value that solar panels add when you are calculating property taxes on your house.
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SunPower
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Tesla Energy
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Federal Solar Incentives
When thinking about solar incentives, federal incentives may be the first thing that comes to mind. The solar incentive that you're most familiar with is probably the Federal Solar Investment Tax Credit (ITC), which gives you a credit on your taxes equal to a percentage of the cost of your solar system.
The ITC applies to solar systems installed after January 1, 2006, on a primary or secondary residence in the United States that you own. The credit initially covered 30% of the total cost – for panels, accessories, equipment and labor – although it may range from 26-30%, depending on when your solar project was undertaken. There is no cap on the claim amount.
Curious how the ITC might apply to your specific situation? Reach out to your local Sherwood solar panel installer to get more information.
In August 2022, the Inflation Reduction Act made revisions to the ITC, now titled the Clean Energy Credit. The Clean Energy Credit runs until 2035. Any solar installation project that is completed between January 1, 2022, and December 31, 2032, may qualify for a 30% tax credit. The amount will be decreased slightly each year until the end of the current program. Starting in 2023, the program expansion will also make credits for energy storage systems even easier to claim.
Click here to learn more about the new Inflation Reduction Act. To understand how the new Clean Energy Credit applies to you, talk to your local Sherwood solar installation company.
State & Local Solar Incentives
Rebates, tax credits and more can be claimed at multiple levels. Along with federal solar incentives, there are often state and local ones, too. These incentives — which might be handled by the state of Arkansas, or by your county or municipality — might be offered on an ongoing basis, or for only a limited time.
Next Steps for Installing Solar in Sherwood
Solar incentives might be provided by your local utility company, the Arkansas government or the federal government. The growing number of incentives available has helped nationwide use of solar energy increase greatly in the last 15 years. Your local Sherwood solar panel installer can provide you with more details about which incentives you can apply for, and get you on track to switch to renewable energy today.
EcoWatch's Sherwood, AR Solar Incentives FAQs
My home already has solar panels installed. Does my system qualify for any incentives?
Your best bet is to talk to the company that installed your solar system – or get in touch with a local Sherwood solar installer — to learn about which incentives you may qualify for. If your system was installed after January 1, 2022, you likely qualify for the newly increased 30% tax credit under the Inflation Reduction Act. Solar panels installed between 2006 and 2021 may qualify for a tax credit of 26-30%.
What are some environmental benefits of installing solar panels on my home?
You can lower your carbon footprint by 350 pounds of CO2 a year by installing solar panels. This adds up to approximately 7,000 pounds over 20 years. Solar is also a renewable energy source, meaning that making the switch reduces the drain on our planet's resources.
How long until the federal solar tax credit ends?
The federal solar tax credit, previously called the ITC and now named the Clean Energy Credit, is scheduled to end 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?
Yes, you can claim both rebates and tax credits towards the cost of solar panels. Depending on precisely which incentives you are claiming, they may apply in a different order. Make sure that you talk to your solar installer or a local tax professional to confirm that you are claiming incentives correctly and getting the most money possible.
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.