With a nickname like the Natural State, one might expect developments in renewable energy. However, it seems like much the opposite; those that are looking to save money on solar panels in Arkansas might feel hard-pressed for opportunities.
However, some incentives exist if you know where to look. With benefits from federal, state, and local levels, homeowners can still make renewable energy work in their favor. Keep reading for a detailed guide to solar incentives in Arkansas.
How to Save Money on Solar Panels in Arkansas: Overview
Generally, several incentives can make the cost of solar panels even more affordable. These incentives typically come in a few forms:
- Federal Solar Tax Credit
- State credits and rebates
- Government regulations
In Arkansas, the benefits that support solar energy (and other alternative energy technologies) are scarce. Beyond the federal incentive, the Natural State has taken a stance against switching from traditional power systems. Let’s break down the benefits below.
Federal Solar Tax Incentive
Fortunately for those interested in the financial and environmental benefits of renewable energy, the United States offers a federal tax return on residential solar purchases. This benefit comes in the form of a credit off federal taxes for every aspect of an array, including equipment, installation, and sales taxes.
Those that qualify can see 30% of their purchases come back in the credit. However, this incentive only lasts until 2032. Perks start to drop off each year until the program terminates in 2035. Qualifications include owning the system outright, living at the residence in which it’s installed, and purchasing new equipment.
Solar Panels in Arkansas: Credits and Rebates
In some states, some benefits can drop the cost of solar energy even further. Similar to the federal incentive, there exist state tax incentives that come back as a credit as well. In other states, you can even receive a rebate on your equipment. Arkansas currently does not offer either a state tax credit or a rebate.
However, the Natural State does have net metering. This is a program that requires Arkansas municipal utilities to purchase a portion of excess power from solar arrays connected to the grid. Net metering requirements vary depending on the city but work for any solar array up to 25kW (which should cover most residential needs).
Arkansas Political Regulations
Another way that people find savings on solar is through government policy; a Renewable Portfolio Standard (RPS) is a compiled set of plans that support infrastructure for renewable energy. The position of a state’s RPS helps us project how it feels about solar. Arkansas is one of the few states that has no RPS, meaning there are no plans to promote solar energy in the near future.
This helps explain the total lack of regulations involving state and property taxes. Where some states exempt solar panel purchases from these taxes, Arkansas still requires both. Unfortunately, the state is making no moves to change this.
Should Arkansans Lease Solar?
In 2019, the Natural State approved the ability to lease an array. However, due to the cost of solar panels in Arkansas coupled with the location, homeowners won’t see much in return for nearly 25 years. In addition to disqualifying you from the federal incentive, a solar lease will result in a net loss for nearly the entirety of the system. As such, Arkansans should only consider this option if they’re truly married to the environmental benefits of sustainable energy.
Solar Panels in Arkansas: Incentive Summary
|Federal Tax Incentive
|Arkansas Tax Credits / Rebates
|Available to residential systems up to 25kW
|Renewable Portfolio Standard
|Property Tax Exemption
|Sales Tax Exemption
|Performance Payment Program
How to Save Money on Solar Panels in Arkansas: Further Reading
As far as saving money on solar panels in Arkansas goes, your options are limited. With no state-level support and programs that dwindle more every year, it’s hard to responsibly promote this as an affordable option. To follow the solar industry for future developments, check out the articles below.
The 10 Largest Renewable Companies in the World, and What They Do – From solar energy to geothermal power, these companies want to change the way we use power.
A Guide to All of Tesla’s Gigafactories, ad Where They Are Located – The leading EV manufacturer plans to evolve technology with these next-level factories.
7 Solar-Powered EVs You Can Buy Today – Here’s how car manufacturers are using solar energy to power their newest models.
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