Solar Power in Arkansas: All You Need to Know

Arkansas Solar Power: Check Your Savings, Costs, Tax Breaks Incentives and Rebates

Arkansas receives sunlight that is equivalent to 4.5-5.0 peak sun-hours a dayIf you live in the state of Arkansas, you can get plenty of energy from a residential solar PV system.

Throughout the year, Arkansas receives an average amount of sunlight that is equivalent to 4.5-5.0 peak sun-hours per day. In other words, for every kilowatt of solar panels you install, you can expect to get up to 5 kWh of electricity per day.

Consider for example the city of Little Rock, capital of Arkansas. According to the NASA Atmospheric Science Data Center, you can expect a yearly average of 4.83 peak sun-hours per day, with a maximum of 6.03 peak sun-hours during the month of July.

This represents a considerable solar power potential that you can benefit from if you live in the city.

Arkansas also has a very favorable net metering policy, where the entire price of any kWh you export to the grid becomes a credit on the next month’s bill.

This ensures that you save the full price of every single kWh of energy produced by your system, as opposed to only a fraction of the price, which is a common practice among electric utilities in many other states.


Return of Investment for Residential Solar Power in Arkansas

save more than $600 per yearIn order to illustrate the project financials for a solar PV system in the state of Arkansas, let’s assume a 5-kilowatt system is installed in an Arkansas home.

For this system, you can expect to pay more than $21,000 upfront, which is equivalent to $4.2 per installed watt.

However, by making use of the available tax credits and considering the first year savings, it is possible to reduce the year one cost to around $14,000.

This is equivalent to $2.8 per installed watt, which is great for a residential solar PV system when you consider that the installed price is commonly in the range of $3 to $4 per watt.

Here is our breakdown of the costs and savings when installing a 5 kW PV system in Arkansas:

  • - The upfront price of the residential PV system will be in the range of $21,000.

  • - Subtract the federal solar tax credit at 30%, and you can deduct around $6,300.

  • - With this, the quote for your solar PV system in Arkansas drops to around $14,700.

  • If you consider that you will save more than $600 per year initially, your net cost for year one is around $14,000.

  • You can expect to get the return on your investment in around 18 years.

  • Your property will also increase in value, and so will your net worth.

The payback period is extended due to the fact that Arkansas has very low electricity prices – $0.10/kWh on average.

However, if you consider that PV arrays have a typical service life of 25 years, you will still get 7 years of free energy once the system has paid for itself.

You can expect so save around $620 on electric bills during the first year of operation, and this will only increase with time given that inflation tends to drive up energy prices by around 3.5% per year.

Over the total lifetime of the solar PV array, you can expect to see above $9000 in net savings!

In addition to the direct financial benefit of a PV system in Arkansas, also consider that you will increase the value of your home significantly.

Of course, this is just a general scenario to give you an idea of the financial performance you can expect, for a more accurate calculation we recommend you vist our UV calculator.

Every project is different, and there are many factors to consider such as:

  • - The orientation of your rooftop.

  • - Presence of natural or man-made obstacles that might cast shadows on your PV array.

  • - Your exact location in the state of Arkansas.

Talk to a trusted solar installer near you for a detailed PV analysis and quote according to the exact location and conditions of your home.


Arkansas Solar Power Incentives, Tax Breaks and Rebates

in Arkansas you have access to the 30% federal tax creditArkansas has no state-level incentives, tax breaks and rebates for solar power, but you have access to the 30% federal tax credit, which can greatly reduce your initial investment when you install a PV array.

You also have access to an excellent net metering policy, which maximizes savings obtained per kWh produced by your PV system.

The main reason why local incentives are not available in Arkansas is that the state lacks a Renewable Portfolio Standard (RPS).

When an RPS is available, there is a state-wide directive to obtain a specified percentage of energy from renewable sources by a specified date.

This could change in the near future thanks to the Clean Power Plan announced by President Obama in 2015, which sets forth a nation-wide directive to reduce emissions.

Arkansas Tax Credit

While there are no state-specific tax credits in Arkansas, you can still take advantage of the 30% ITC, which as its name implies allows you to deduct 30% of a PV system’s cost from your taxes.

You have to pay the full price of the system during installation, but will see the ITC savings as soon as you file your next tax declaration.

The ITC was set to expire in 2016, but fortunately the government has renewed in order to further motivate home and business owners in the USA to implement solar PV systems.

Arkansas Electricity Rates

The electricity price in Arkansas is $0.10 on average, and this is the main reason why the payback period of a solar PV system tends to be extended. However, when you take into account the entire lifetime of the photovoltaic system, you are getting electricity at a lower price that if you purchase 100% of your energy from the electric utility grid.

If you install a solar PV system in Arkansas, you will still pay less for your energy over the system’s lifetime, and the environmental benefit will be comparable to planting more than 100 trees.

Fortunately, Arkansas has one of the best net metering policies in the US. If there is a month where you produce more energy that what you consume and have to export the surplus to the electric utility grid, don’t worry, you will get 100% of the price of the exported energy as a credit on your next electricity bill.

The fact that you can carry credits month by month means that you can take advantage of the extra sunshine in the summer to reduce your electric utility bills over the winter.

If you live in Arkansas, you can size your solar photovoltaic system so that your net consumption throughout the year is zero, and you will never have to spend on electricity again once you have installed your solar PV system.

Keep in mind, however, that you cannot overdo it: the net metering policy does not allow credits to be rolled over to the next year, so sizing the PV system accurately is very important.

The best way to make sure you size your solar PV system correctly is to talk to our experts, who can get you in touch with reliable solar contractors close to you.

A qualified contractor willcalculate just the right size of system to meet your energy needs throughout the year without going overboard.

Also keep in mind that Arkansas does not have a standard interconnection process for solar PV arrays: this is yet another reason why you should look for the best solar PV installers, and make sure your system will operate safely and reliably.

Which Taxes Apply for Solar PV Systems in Arkansas?

If you will install a residential solar PV system in Arkansas, keep in mind that you will have to pay the sales tax, and you will also be taxed on the increase of property value.

The good thing is that the 30% ITC helps offset this, and the end result will be in your favor!

Are There 0 Down Payment Financing Options in Arkansas?

Unfortunately, solar leasing and power purchase agreements (PPAs) are not available in Arkansas.

This means that your only two options for installing a solar PV system are to purchase the system in cash or to take a HELOC – home equity line of credit.

Solar Loan

If you decide to install a solar PV system in Arkansas with a home equity line of credit, you will see a nearly immediate positive cash flow thanks to the 30% investment tax credit, which applies regardless of whether you purchased the system in cash or with a loan; if you already own the solar PV system, the ITC benefit is yours to take.

Of course, the drawback of the solar loan is that you will pay interest for several years, and over the total lifetime of the system you will most likely break even instead of making a profit.

In other words, owning the PV system and purchasing all that energy from the grid will have approximately the same cost for you.

The benefits of a solar loan in Arkansas are the 30% ITC at the beginning and the increase in your home’s value.

However, the lifetime cost of the system will be the same as if you had purchased all of its production from the grid.

If you a purchasing a home in Arkansas, consider going solar right away: the extra cash flow from the ITC at the beginning will help you keep up with payments in the long run.


Cash Purchase VS Loan: What’s Best for Arkansas Homeowners?

Each option has benefits and disadvantages, and the final choice is for the homeowner. Both alternatives can be summarized in the following way:

  • Purchasing a PV system in Arkansas in cash has a payback period of around 18 years, but after that you will get more than $1000 per year in free energy.

  • Over its lifetime, the PV system will save you a net amount of more than $9000.

  • If you can afford the upfront cost, this is the best option for going solar in Arkansas.

  • Purchasing a PV system in Arkansas through a loan gives you an immediate benefit thanks to the 30% investment tax credit, but the net savings over the system’s lifetime will tend to be zero unless energy prices start to rise dramatically.

  • If you are looking for the short-term benefit of the ITC, or are more concerned with the environmental benefits of solar power and not that much about the financial aspect, you could look into this option.


What is the Solar Power Installation Process in Arkansas?

If you want to know the exact cost and potential savings a PV system offers you in Arkansas, our best recommendation is to set up a home visit by a trusted solar installer.

The procedure to own a solar PV system is very simple, and you can start today:

  • 1. Fill our solar installation form, providing basic information on your property.

  • 2. Talk to trusted installers near you, and receive accurate quotes.

  • 3. Compare quotes and choose the best option, we recommend you compare at least three.

  • 4. Have your contractor install the PV system, and enjoy clean power while helping the planet.

A trusted contractor can custom-tailor a solar PV system according to your budget and needs, and once you sign the agreement the installation process only takes from three to four days.



net metering is favorable for owners of residential solar PV systemsArkansas receives generous amounts of sunlight, and the net metering policy is very favorable for owners of residential solar PV systems, allowing any surplus production to be carried over to the next month.

With respect to acquiring the PV system, your two viable options are to purchase the system in cash, or to finance it through a home-equity line of credit (HELOC).

The first option requires having the cash availability to purchase the system, but will provide over $9000 in net savings of the PV array’s lifetime.

On the other hand, the solar loan option breaks even but provides a considerable year-one benefit in the form of the 30% investment tax credit – it is viable if you want to combine it with another investment and improve the cash flow over the first few years.

At the moment there are no local rebates and tax benefits, which in great part is due to the lack of an RPS in Arkansas.

However, with the Clean Power Plan that was launched in 2015, this will start to change as more states are committing to push forth renewable energy sources.

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