Typical home: Close call

Is solar worth it in Arkansas?

For a typical Arkansas home in 2026, solar is a close call: about a 14.5-year payback and $20,493 saved over 25 years after paying for the system. Check your own home, because roofs, usage and utilities vary a lot.

Payback, typical home
14.5 yrs8 kW, paying cash
Electricity price
13.4¢per kWh, U.S. 18.0¢
Solar production
1,402kWh per kW per year
Exports credited at
~30%Avoided-cost export credit

The numbers for a typical Arkansas home

Electricity use1,042 kWh a month (Arkansas average)
Best-value system8 kW, producing 11,216 kWh a year (90% of use)
Price$21,500 at about $2.75/W
First-year savings$1,469
Payback14.5 years
25-year net$20,493 (5.4% a year return)
Rate increase assumed2.7% a year, from Arkansas's 2015–2025 history

Paying cash, no federal credit, 5% discount rate, microinverters, $25 per kW a year for maintenance and repairs. Methodology.

Why it comes out this way

  • Electricity is cheap: 13.4¢ per kWh, 25% below the U.S. average (18.0¢), so each solar kWh saves less.
  • Exported solar is typically credited at about 30% of retail, so systems pay best when sized for what you use yourself.
  • A typical system here produces about 1,402 kWh per kW per year (ranked #23 of 51).
  • There is no federal tax credit for homeowners who buy in 2026, which adds several years to payback compared with 2025.
Watch out for leases right now. Lease and PPA providers can still claim a federal credit that homeowners can't, so they're being pushed hard. Compare any lease against buying with our lease vs. buy calculator.

Net metering and export rules in Arkansas

Avoided-cost export credit. Under Act 278 of 2023, new solar customers (applications after Sept 30, 2024) still offset their own usage at retail, but any excess electricity sent to the grid is credited only at the utility's avoided cost, often under half of retail. Customers who connected earlier keep 1:1 retail credit through 2039-2040.

Net excess generation credited at the utility's avoided cost (wholesale energy value), set per utility.

  • Netting: monthly
  • Unused credits: Excess credits carry forward at avoided-cost value; legacy customers keep kWh banking at retail. Exact rollover/expiration terms vary by utility tariff (not verified).
  • System size limit: 25 kW
  • Fixed charges: Act 278 permits utilities to recover certain costs from net-metering customers; standard customer charges apply. No specific statewide solar fee confirmed.
  • Last major change: Act 278 (signed Mar 2023); net billing at avoided cost effective for new customers from Oct 1, 2024. Legacy customers grandfathered for 20 years (through ~2040).

Read net metering explained to see why export rules can swing payback by years.

Rules by utility
UtilityExport creditNotes
Entergy Arkansas~30% of retailNet excess generation credited at avoided cost per its net metering rider; current value not verified.
Southwestern Electric Power Co. (SWEPCO)Avoided-cost export creditAct 278 avoided-cost credit.
Oklahoma Gas & Electric (Arkansas)Avoided-cost export creditAct 278 avoided-cost credit.

Solar incentives in Arkansas

The federal 30% Residential Clean Energy Credit ended for systems installed after December 31, 2025. What that means.

ProgramTypeWhat you getStatus
No state solar incentivesotherArkansas has no state solar tax credit, rebate, or solar-specific sales/property tax exemption for residential systems. Federal 25D ended for expenditures after 2025. Eligibility: n/aunknown

What solar costs in Arkansas

A fair cash price is around $2.75 per watt before incentives. For the 8 kW system that fits a typical home, expect roughly $18,700 to $26,400; smaller systems cost more per watt.

Solar costs in every state · What's a good price per watt?

Average residential electricity price in Arkansas (¢/kWh)

EIA annual averages. Prices rose 2.7% a year from 2015 to 2025; Arkansas ranks #45 of 51 for price. Last 12 months through July 2026: 13.4¢.

Show as a table
PeriodValue
'129.3
'139.6
'149.5
'159.8
'169.9
'1710.3
'189.8
'199.8
'2010.4
'2111.3
'2212.1
'2312.3
'2412.3
'2512.9
Monthly production per kW of solar in Arkansas

kWh per kW for a south-facing roof at a 20° tilt, population-weighted across 19 cities (PVWatts, NLR). Total 1,402 kWh a year.

Show as a table
PeriodValue
Jan90
Feb94
Mar116
Apr125
May136
Jun142
Jul143
Aug140
Sep127
Oct114
Nov93
Dec81

How many homes have solar

Homes with net-metered solar (2025)
19,458
Share of homes
1.3%
Residential solar capacity
182 MW
Growth over the past year
+1.5%

Sources: EIA-861 (2025), EIA small-scale solar estimates, LBNL Tracking the Sun and state interconnection data.

Electric utilities in Arkansas

UtilityHomes servedPrice (2026 est.)Typical useTypical-home verdict
Entergy Arkansas612,25413.9¢1,085 kWh/moClose call
SWEPCO109,77713.5¢1,104 kWh/moNot worth it
Carroll Electric Cooperative104,57914.0¢1,067 kWh/moClose call
First Electric Cooperative96,68513.5¢1,202 kWh/moClose call
Ozarks Electric Cooperative74,24714.5¢1,018 kWh/moClose call
OG&E58,56912.9¢1,045 kWh/moClose call
Arkansas Valley Electric Cooperative55,00014.7¢1,104 kWh/moWorth it
North Arkansas Electric Cooperative36,59514.8¢1,011 kWh/moWorth it
City of North Little Rock35,72113.0¢898 kWh/moClose call
City Water and Light Plant35,3357.4¢1,258 kWh/moNot worth it
Conway Corporation31,3769.9¢1,006 kWh/moNot worth it
Craighead Electric Cooperative25,18013.0¢1,344 kWh/moClose call
Southwest Arkansas E C C24,97414.5¢1,272 kWh/moWorth it
City of Bentonville22,55912.3¢1,084 kWh/moClose call
C & L Electric Cooperative20,02014.4¢1,097 kWh/moClose call
Petit Jean Electric Cooperative18,87817.3¢960 kWh/moWorth it
City of Benton13,37110.8¢996 kWh/moNot worth it
Paragould Municipal Utilities (AR)12,6479.4¢1,382 kWh/moNot worth it
Woodruff Electric Cooperative12,10013.1¢1,201 kWh/moClose call
Clay County Electric Cooperative10,50315.1¢930 kWh/moWorth it
City of West Memphis10,1878.8¢1,150 kWh/moNot worth it
South Central Ark El Cooperative9,44716.8¢981 kWh/moWorth it
City of Siloam Springs9,13712.0¢861 kWh/moNot worth it
Ouachita Electric Cooperative8,39214.1¢1,026 kWh/moClose call
City of Hope5,79212.9¢935 kWh/moClose call

Solar by city in Arkansas

Protect yourself when buying

  • Check the license. Arkansas Contractors Licensing Board (residential/commercial contractor license as applicable) and a licensed electrician/master electrician via the Arkansas Board of Electrical Examiners (Dept. of Labor and Licensing). Look up an installer
  • Cancellation rights. Federal law gives you 3 business days to cancel most door-to-door sales over $25. How to cancel
  • HOA and solar access. No statewide solar access/HOA protection law.
  • Community solar. Limited: net-metering law permits shared/community facilities and some co-ops offer subscriptions; no robust statewide program after Act 278.

Installers active in Arkansas

Ranked by installations in public records, not by payment. Volume isn't quality: always check licenses and reviews.

  1. Stellar Solar 9 installs
  2. Sun Solar Energy Solutions 1 installs

Search all Arkansas installers

More about solar in ArkansasAvoided-cost values per utility were not verified; treat export value as roughly 25-35% of retail. Payback for new systems depends heavily on self-consumption.

Questions about solar in Arkansas

Is solar worth it in Arkansas in 2026?

For a typical Arkansas home, solar is a close call. A 8 kW system costing about $21,500 after state incentives saves about $1,469 in the first year and pays back in about 14.5 years. Your result depends on your roof, usage, utility and price, so run the calculator for your address.

How much do solar panels cost in Arkansas?

A reasonable cash price is around $2.75 per watt before incentives, or roughly $18,700 to $26,400 for a 8 kW system.

Does Arkansas have net metering?

Under Act 278 of 2023, new solar customers (applications after Sept 30, 2024) still offset their own usage at retail, but any excess electricity sent to the grid is credited only at the utility's avoided cost, often under half of retail. Customers who connected earlier keep 1:1 retail credit through 2039-2040.

Is there a solar tax credit in Arkansas?

The 30% federal credit for homeowners ended for systems installed after 2025. Arkansas does not offer a state income tax credit for solar that we're aware of.

How do I check a solar installer's license in Arkansas?

Arkansas Contractors Licensing Board (residential/commercial contractor license as applicable) and a licensed electrician/master electrician via the Arkansas Board of Electrical Examiners (Dept. of Labor and Licensing).. Look up any installer with the state's license search at https://aclb.arkansas.gov/.

Policy research current as of October 2026; sources include uaex.uada.edu, pv-magazine-usa.com, apsc.arkansas.gov. Electricity data: EIA, through July 2026. Found something out of date? Tell us.