2023 Solar Incentives Guide for Little Rock, IL - Tax Credits & Rebates

What Solar Tax Credits, Incentives, and Rebates are Available in Little Rock?

Source: https://www.dsireusa.org/

The term "solar incentives" includes a range of financial incentives implemented to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. Incentives might include things like discounts, cash back or monthly utility bill credits. Some incentives are offered federally, while others are offered by the Illinois government or by your specific utility company, county or municipality. Types of solar incentives might include:

• Tax Exemptions: Your solar system may qualify for both sales tax and property tax exemptions. Sales tax exemptions are applied at the time of purchase. Property tax exemptions allow you to exclude the value that solar panels add when you are calculating property taxes on your home.
• Tax Credits: These credits are dollar-for-dollar reductions (not deductions) in how much in taxes you owe the government.
• Net Metering: Don't forget to talk to your Little Rock utility company about signing a net metering agreement. This will allow you to get a credit towards your monthly utility bill for the value of excess energy generated by your solar panels. You could receive either a dollar-for-dollar credit or a percentage of the value.
• Rebates: Solar rebates might be offered by your local utility company, or by your state or county. These rebates work as partial refunds that are applied after you purchase solar panels and before tax credits are calculated.
• Solar Renewable Energy Certificate (SREC): SRECs and similar performance-based incentives may be available to you if your solar system produces more than a specified (typically small) amount of electricity. This category of incentives is generally handled at the state level. You can sell the SRECs you receive to your utility company or other buyers, and the money you make is normally considered part of your taxable income.

Federal Solar Incentives

When thinking about solar incentives, federal incentives are likely the first thing that comes to mind. One of the incentives many people are likely to be familiar with is the Federal Solar Investment Tax Credit (ITC). This incentive is a tax credit for a given percentage of the cost of your solar system.

The ITC applies to a solar system installed on your primary or secondary residence in the United States. The solar system has to have been installed after January 1, 2006 on a property owned by you for you to claim the credit. Initially, the ITC applied to 30% of all costs (panels, labor, accessories and equipment), although the amount has fluctuated over the years between 26-30%. The installation date of your solar system will determine what percentage you are eligible for. There is no cap on the amount you can claim.

Speaking with your local Little Rock solar panel installer is the best way to learn more about how the ITC applies to your situation.

In August 2022, the Inflation Reduction Act expanded and extended the ITC, now titled the Clean Energy Credit. Homeowners can now receive a credit equal to 30% of the total costs of solar system installation for projects that began after January 1, 2022 and will be finished by the end of 2032. The percentage will then begin to decrease on a yearly basis until the Clean Energy Credit expires in 2035. Beginning in 2023, it will also be easier to obtain credits for energy storage systems under the new laws.

Click here to learn more about the new Inflation Reduction Act. Your local Little Rock solar panel company can answer any questions you have and explain how the new Clean Energy Credit will apply to you.

State & Local Solar Incentives

Federal solar incentives are not your only option; tax credits, rebates and more are often offered at the state and local level. Incentives might be provided by the state of Illinois, or by your county or municipality. Some incentives are available for only a limited time, while others are ongoing.

Next Steps for Installing Solar in Little Rock

You can apply for solar incentives from the federal government and the Illinois government, as well as from your local utility company. The increased availability of solar initiatives in the past 15 years has helped increase nationwide solar energy use enormously. Your local Little Rock solar panel installer can provide you with more details about which incentives you may qualify for, and get you feeling good about making the change to renewable energy today.