Is Solar Worth It in Arkansas in 2026?
Arkansas gets a solid, if unspectacular, amount of sun — around 217 sunny days a year, enough to make panels worthwhile on the right roof. At about 35 degrees north latitude (similar to Memphis or Oklahoma City), a well-placed system in Little Rock produces roughly 1,384 kWh per installed kilowatt per year. Real output, not a marginal state for solar.
But 2026 is a much harder year to run this math than 2024 was. The 30 percent federal tax credit is gone for any system completed after December 31, 2025, and Arkansas never had a state credit or rebate to fall back on. If your system wasn't interconnected by September 30, 2024, you also missed the cutoff for full 1:1 net metering — new installs get a much lower avoided-cost rate for exported power instead. None of that makes solar dead here, but the fast, easy payback stories from a few years ago mostly don't apply anymore. You need your own numbers, not an installer's pitch.
Arkansas Electricity Prices Keep Climbing
Solar is a bet against your future electricity bill. Every kWh your roof makes is one you don't buy from Entergy, SWEPCO, or your co-op. Here's the long-term trend, from federal EIA data.
Full Arkansas electricity price data (1990–2025)
| Year | Arkansas (¢/kWh) | US avg (¢/kWh) |
|---|---|---|
| 1990 | 8.1 | 7.8 |
| 1991 | 8.1 | 8.0 |
| 1992 | 8.3 | 8.2 |
| 1993 | 8.3 | 8.3 |
| 1994 | 8.1 | 8.4 |
| 1995 | 8.0 | 8.4 |
| 1996 | 7.8 | 8.4 |
| 1997 | 7.8 | 8.4 |
| 1998 | 7.5 | 8.3 |
| 1999 | 7.4 | 8.2 |
| 2000 | 7.5 | 8.2 |
| 2001 | 7.7 | 8.6 |
| 2002 | 7.3 | 8.4 |
| 2003 | 7.2 | 8.7 |
| 2004 | 7.4 | 9.0 |
| 2005 | 8.0 | 9.5 |
| 2006 | 8.9 | 10.4 |
| 2007 | 8.7 | 10.7 |
| 2008 | 9.3 | 11.3 |
| 2009 | 9.1 | 11.5 |
| 2010 | 8.9 | 11.5 |
| 2011 | 9.0 | 11.7 |
| 2012 | 9.3 | 11.9 |
| 2013 | 9.6 | 12.1 |
| 2014 | 9.5 | 12.5 |
| 2015 | 9.8 | 12.7 |
| 2016 | 9.9 | 12.6 |
| 2017 | 10.3 | 12.9 |
| 2018 | 9.8 | 12.9 |
| 2019 | 9.8 | 13.0 |
| 2020 | 10.4 | 13.2 |
| 2021 | 11.3 | 13.7 |
| 2022 | 12.1 | 15.0 |
| 2023 | 12.3 | 16.0 |
| 2024 | 12.3 | 16.5 |
| 2025 * | 12.8 | 17.3 |
Source: US EIA, average residential retail electricity price. Values in cents per kWh. * 2025 is preliminary.
Arkansas residential electricity ran about 12.8 cents per kWh in 2025 (EIA preliminary), up roughly 60 percent since 2005, at a pace of about 2.7 percent a year over the last decade. That's below the national average — and it's part of why the value of exported solar power was worth fighting over in the legislature. A kilowatt-hour is worth less here than in a high-cost state, so the terms of net metering matter more, not less, to whether solar pencils out.
The Arkansas Sun, Month by Month
Panels respond to how high the sun climbs and how long it stays up, not to air temperature. At 35°N, Arkansas sun angles swing more between summer and winter than a Gulf Coast state, which shows up directly in monthly production.
Arkansas monthly solar production data
| Month | kWh per installed kW |
|---|---|
| Jan | 100 |
| Feb | 97 |
| Mar | 119 |
| Apr | 126 |
| May | 125 |
| Jun | 129 |
| Jul | 127 |
| Aug | 129 |
| Sep | 119 |
| Oct | 122 |
| Nov | 103 |
| Dec | 91 |
| Year | 1384 |
Source: NREL PVWatts typical-year estimate (Little Rock), per installed kW at latitude tilt.
Spring and early summer are your best production months — long days and a high sun before the muggiest, haziest stretch of summer cuts in. Winter production drops noticeably at this latitude, which matters if your biggest bills come from electric heat in January. A system sized for your annual average, not your best month, avoids the disappointment of a strong April followed by a weak December.
What Solar Costs in Arkansas in 2026
Installed cost in Arkansas runs about $2.38 to $2.70 per watt in 2026, depending on the source and system size — EnergySage puts the average around $2.38/W for a 14.36 kW system (about $34,235 gross before any credit), while other trackers report $2.44/W and $2.65 to $2.70/W. A reasonable working number is about $2.50/W.
| System Size | Typical 2026 Cost | Roughly Offsets | Fits |
|---|---|---|---|
| 5 kW | $11,900 to $13,500 | ~6,900 kWh/yr (~$74/mo at 12.8¢) | Smaller home, lower usage |
| 8 kW | $19,000 to $21,600 | ~11,100 kWh/yr (~$118/mo) | Average Arkansas home |
| 12 kW | $28,600 to $32,400 | ~16,600 kWh/yr (~$177/mo) | Large home, electric heat/AC |
Because the federal credit is gone and Arkansas has no sales tax exemption for solar equipment, this gross price is essentially your real cost. You'll also pay the standard 6.5 percent state gross receipts tax (plus local tax) on the equipment — nothing here softens the sticker price the way it does in some neighboring states. Get at least three quotes and compare price per watt, not just the total.
Estimate Your Arkansas Payback
The calculator below is set to Arkansas's average rate and typical Little Rock-area sun production. Enter your own monthly bill to see an estimated system size, payback period, and 25-year savings. Arkansas rates have risen about 2.7 percent a year over the last decade — a reasonable starting point for the inflation field, though you can drag it to test other scenarios.
Arkansas Solar Incentives in 2026 — Mostly Gone
Arkansas is one of the more honest cases to lay out, because there's genuinely little left once you strip out the SEO noise.
- Gone — the 30 percent federal credit: The federal Residential Clean Energy Credit ended for installations completed after December 31, 2025, with no phase-out. If a quote still assumes it, ask what else in the proposal is out of date.
- Never existed — a state income tax credit or rebate: Arkansas has no state-specific solar tax credit and no cash rebate program for residential systems.
- Not real — the "Act 1114" sales tax exemption: Several lead-gen sites claim Arkansas exempts solar equipment from sales tax under an "Act 1114," citing $700 to $1,000 in savings. It's not true — a 2021 bill to create that exemption (HB 1628) died in committee, and Arkansas's own Department of Finance and Administration ruled in 2019 that solar doesn't even qualify for the existing manufacturing exemption. Standard 6.5 percent state gross receipts tax, plus local tax, applies.
- Not real — a property tax exemption: Claims of $150 to $350 a year in property tax savings don't hold up either. An academic inventory of state solar property-tax treatments found no special treatment for Arkansas, and current guides agree — added value is assessable like any other improvement.
- Partially — leases and PPAs: Third-party-owned systems can still capture a separate federal business credit through 2027, but it belongs to the leasing company, not you.
The one place Arkansas policy still moves the needle is net metering — covered next.
Net Metering Under Act 278: Grandfathered vs. New
Net metering used to mean the same thing everywhere in Arkansas: your meter ran backward on a sunny day, and you drew down those credits later at the same retail rate. Act 278 — the Arkansas Renewable Energy Development Cost-Shifting Prevention Act of 2023 — and the Public Service Commission's rules in Docket 23-021-R split that into two tiers.
Legacy systems (interconnected on or before September 30, 2024) keep full 1:1 retail-rate net metering, guaranteed for 20 years from their interconnection date — for the last systems that beat the deadline, that runs as late as 2040. If you installed before that cutoff, congratulations: you locked in the old deal, and nothing here changes it.
New systems (installed after September 30, 2024) — which, in 2026, means anyone reading this — fall under a different model entirely. True net metering is gone. Exported energy is credited at an avoided-cost rate instead of the retail rate, reported at roughly 20 to 40 percent of what it used to be worth — Entergy Arkansas has been cited around 2.47 cents per kWh for exports, against 13-plus cents per kWh to buy power back. Credit rollover was also tightened, so banking credits indefinitely is no longer guaranteed, and a roughly 100-mile interconnection and metering distance restriction was added. Utilities including Entergy and SWEPCO file their own tariffs to implement this, and it remains contested in Arkansas press as of mid-2026 — but there's no signal Act 278's core framework is being reversed.
The Deadline Arkansans Still Talk About
Ask around and you'll find Arkansas homeowners talk about September 30, 2024 the way people elsewhere talk about a grandfathered insurance rate — "did you get in before the cutoff" was a real, deadline-driven scramble, with installers racing to interconnect systems before the old 1:1 rule closed. If you're installing now, you're on the other side of that line, and it's worth knowing this state has form here: Arkansas's tax agency actively ruled against solar getting favorable treatment in 2019, and a 2021 attempt to carve out a dedicated sales-tax exemption died quietly in committee. Unlike some neighboring states, Arkansas's tax code has been tested on solar-specific breaks more than once and has come down against them each time. Go in with that context, not with a lead-gen site's rosier numbers.
How to Go Solar in Arkansas
Work through these steps before you sign anything.
- Pull your last 12 power bills and calculate your true average monthly cost — Arkansas bills swing with both summer AC and winter electric heat.
- Confirm your roof faces south, east, or west with minimal shade; north-facing or heavily shaded roofs rarely pay off.
- Ask every installer what export rate applies to your utility under Act 278 — don't accept a vague "net metering" answer, get the actual avoided-cost figure.
- Size the system to your own usage; self-consumption is where most of your savings will come from now.
- Get at least three quotes and confirm none still bake in the expired federal credit.
- Compare the realistic payback period against how long you plan to stay in the home — payback can now run well past a decade for many Arkansas homes.
For the full picture of how solar works, sizing, and buying versus leasing, read our main solar panels guide — it covers the technology in depth, while this page focuses on what's specific to Arkansas. For how a new system interacts with your panel and wiring, see our electrical guide.
Sources
Figures on this page are 2026-current. Rates: US EIA, Electric Sales, Revenue, and Average Price (2025 values preliminary). Production estimates: NREL PVWatts. Net metering law and rules: Act 278 of 2023 and the Arkansas PSC Docket 23-021-R net metering rules. Incentive and cost figures: EnergySage — Arkansas solar incentives and EnergySage — Arkansas solar cost. Sales/property tax history: Arkansas DFA gross receipts tax ruling and 2021 HB 1628 committee record. We review these figures every six months.