2023 Solar Incentives Guide for Texarkana, AR - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Texarkana.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2023 and beyond)
- Ways to optimize your solar investment
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What Solar Tax Credits, Incentives, and Rebates are Available in Texarkana?
Federal Residential Renewable Energy Tax Credit
Solar incentives are intended to make renewable energy usage more affordable through financial incentives for those who install solar panels on their homes. Incentives might include things like discounts, cash back or credit on your utility bill each month. Some incentives are provided by the federal government, while others are provided by the state of Arkansas or by your specific utility company, county or municipality. Some broad categories of solar incentives include:
- Tax Exemptions: Sales tax exemptions are applied at the time of purchase for your solar panels. Property tax exemptions let you ignore the value that your solar panels add when you calculate how much property tax you need to pay on your house.
- Tax Credits: Tax credits decrease, dollar-for-dollar, the total amount of tax you owe the government. These differ from tax deductions.
- Rebates: Your solar installer might help you claim a rebate, or partial refund after purchase, for your solar panels. Counties or states will also offer limited-time rebates at various times. If you receive a rebate, that amount will usually be deducted from your total price before tax credits are calculated.
- Net Metering: You can sign a net metering contract with your Texarkana utility company. This agreement may apply to all or a percentage of the excess electricity your solar panels generate. Your utility company will then deduct this value from your utility bill each month.
Federal Solar Incentives
When thinking about solar incentives, federal incentives might be the first thing that comes to mind. One of the incentives that most people are probably familiar with is the Federal Solar Investment Tax Credit (ITC). The ITC is a tax credit for a specific percentage of your solar system's cost.
The ITC covers solar systems installed after January 1, 2006 and under this program you can deduct from your taxes a percentage of the total cost of solar panels, equipment, accessories and labor. You can receive this credit for solar panels installed on a primary or secondary residence that you own in the United States. Originally, you could claim 30% of the total cost, although certain projects may qualify for only 26%, depending on the details. There is no maximum amount you can claim.
To know exactly how much the ITC could save you, talk to your local Texarkana solar panel installer.
The ITC has been renewed and expanded following the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. Homeowners are now eligible for a credit of 30% of the total costs of solar system installation for projects started after January 1, 2022 and completed before the end of 2032. This percentage will then decrease on a yearly basis until the Clean Energy Credit ends in 2035. The program expansion also makes it easier to get credit for energy storage systems, starting in 2023.
More information about the new Inflation Reduction Act can be found here. Your local Texarkana solar panel company is the best resource for answering your questions about the new Clean Energy Credit and how it applies to you.
State & Local Solar Incentives
Federal solar incentives are not your only option; rebates, tax credits and more are often offered at the local or state level. Certain incentives are offered for only a limited time, while others are ongoing. These local incentives could come from the Arkansas government, or from your specific county or municipality.
Next Steps for Installing Solar in Texarkana
The nationwide use of solar energy has increased enormously in the last 15 years, in part due to the growth in the number of solar incentives. You may get these incentives from your local utility company, the federal government or the Arkansas government. We suggest talking to your local Texarkana solar installer for more information about these incentives and to be sure that you're getting all of the money you can for your solar panels.
EcoWatch's Texarkana, AR Solar Incentives FAQs
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