2023 Solar Incentives Guide for West Memphis, AR - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in West Memphis.
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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Updated September 15, 2023
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What Solar Tax Credits, Incentives, and Rebates are Available in West Memphis?
Federal Residential Renewable Energy Tax Credit
Source: https://www.dsireusa.org/
The term "solar incentives" generally refers to financial incentives designed to encourage people to use renewable energy by making the installation and use of solar panels more affordable. Incentives can include things like discounts, cash back or monthly utility bill credits. Some incentives are provided by the federal government, while others are offered by the state of Arkansas or your specific utility company, county or municipality. Types of solar incentives might include:
- Tax Exemptions: Sales tax exemptions are applied at the point of sale for your solar system. Property tax exemptions allow you to exclude the added value of your solar system when calculating how much property tax you need to pay on your house.
- Rebates: Some solar companies will help you claim a rebate, or partial refund of your purchase, for your solar system. States or counties will also offer limited-time rebates at various times. Any rebates you receive will usually come off your total price before any tax credits are calculated.
- Net Metering: Be sure to speak to your West Memphis utility company about signing a net metering contract. This allows you to get a credit towards your utility bill every month for the value of excess energy your solar panels generate. You may receive either a dollar-for-dollar credit or a percentage of the value.
- Tax Credits: Tax credits reduce, dollar-for-dollar, the total amount of tax you owe the government. Tax credits are different from tax deductions.
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Federal Solar Incentives
Federal incentives are the kind of incentives that you are most likely to have some knowledge of. A federal incentive many people are probably familiar with is the Federal Solar Investment Tax Credit (ITC). This is a tax credit for a given percentage of your solar system's cost.
The ITC originally covered 30% of the cost of solar system installation, although that number has fluctuated slightly over the 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 accessories, labor and equipment. There is no maximum amount you can claim. The ITC applies to solar panels installed after January 1, 2006 on your primary or secondary residence. The residence must be owned by you and in the United States.
To best understand how the ITC will apply to your situation, reach out to your local West Memphis solar panel installer and ask for more information.
The ITC was both renewed and expanded by the passage of the Inflation Reduction Act in August 2022. It's also now called 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 then decrease slightly on a yearly basis until the current program ends. Starting in 2023, the 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. The best way to fully understand how the new Clean Energy Credit might apply to you is to talk with your local West Memphis solar panel installers.
State & Local Solar Incentives
There are more than just federal solar incentives; tax credits, rebates and more might also be offered at the state and local level. These solar incentives — which may be given by your county or municipality, or by the state of Arkansas — might be offered on an ongoing basis, or for only a limited time.
Next Steps for Installing Solar in West Memphis
Solar incentives may come from the federal government, the Arkansas government or your local utility company. The variety of solar incentives available has contributed to a large increase in solar energy use in the last 15 years. Your local West Memphis solar panel installation company can help you learn more about which incentives you should apply for, and get you feeling good about making the change to renewable energy today.
EcoWatch's West Memphis, AR Solar Incentives FAQs
How much will a solar system save me on my electric bill in West Memphis annually?
Typically, homeowners in West Memphis who install solar panels save about $769.24 per year, or about $14,615.60 over 20 years after they make the switch.
What are the environmental benefits of switching to solar energy?
Solar energy is a renewable energy source — by switching where you get your energy, you help reduce the strain on our planet's resources. Solar panels can also lower your home's CO2 emissions by 350 pounds annually, or roughly 7,000 pounds over 20 years.
If I trade in my appliances for ones that utilize solar energy, are there credits I can claim?
Under the new Inflation Reduction Act, there are several new financial incentives for making eco-friendly improvements to your home. More details regarding these incentives, including information about incentives for purchasing new appliances, can be found here.
Can I receive incentives both towards the up-front cost of solar panels, and later as reimbursement?
Yes, you can claim both tax credits and rebates towards the cost of solar panels. Depending on precisely which incentives you are receiving, they may apply in a different order. Be sure to speak with your solar installer or a local tax professional to verify that you are claiming the correct incentives and getting the most money you can.
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.