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
The term "solar incentives" covers a wide 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. Various 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 other incentives are federal. You might qualify for any of the following types of solar incentives:
- Tax Credits: Tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the federal government. (A tax credit is different from a tax deduction.)
- Tax Exemptions: Your solar system might qualify for exemptions on both sales and property tax. Sales tax exemptions are applied at the time of purchase. Property tax exemptions let you ignore the value added by your solar panels when calculating property taxes on your home.
- Rebates: Rebates, or cash back after a purchase, are usually applied prior to any solar tax credits being calculated. These rebates might be offered by your local utility company, by your state or by your county.
- Net Metering: Net metering becomes relevant once your solar system is up and running. If you have a net metering agreement with your Texarkana utility company, it will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some locations, this credit is dollar-for-dollar, while in others you may receive a refund equivalent to a percentage of the value.
Federal Solar Incentives
When thinking about solar incentives, you probably think of federal incentives first. 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 your solar system's cost.
The ITC was originally for 30% of the cost of installing solar panels, although it has fluctuated slightly over the last few years between 26-30%. The installation date of your solar system will determine what percentage you qualify for. The total installation cost includes the panels themselves as well as the cost of equipment, accessories and labor. There is no maximum amount you can claim. The ITC applies to solar systems installed after January 1, 2006 on your primary or secondary residence. The residence must be in the United States and owned by you.
To more fully understand how the ITC might apply to your situation, reach out to your local Texarkana solar panel installation expert and request more information.
In August 2022, the ITC (now titled the Clean Energy Credit) was expanded and extended by the passing of the Inflation Reduction Act. The new Clean Energy Credit extends until 2035. You can now apply 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 the date of expiration. Starting in 2023, the program expansion will also make claiming credit for energy storage systems easier than ever before.
More information about the new Inflation Reduction Act can be found here. To fully understand how the new Clean Energy Credit applies to you, get in touch with your local Texarkana solar installers.
State & Local Solar Incentives
There are more than just federal solar incentives; rebates, tax credits and more are often offered at the local or state level. These incentives — which may be provided by your county or municipality, or by the state of Arkansas — could be offered on an ongoing basis, or for only a limited time.
Next Steps for Installing Solar in Texarkana
You can qualify for solar incentives from the Arkansas government and the federal government, as well as from your local utility company. This increase in availability of solar initiatives in the past 15 years has helped increase nationwide solar energy use enormously. Getting in touch with your local Texarkana solar panel installer is the best first step towards getting all the incentives you qualify for when you switch to solar energy.
EcoWatch's Texarkana, AR Solar Incentives FAQs
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