Is Solar Worth It in Arkansas in 2026?
Complete analysis of solar costs, incentives, net metering, and payback for Arkansas homeowners — without the federal ITC.
Cost Per Watt
$2.60
installed
Electricity Rate
$0.132
per kWh
Payback (No ITC)
14 yr
current reality
Payback (With 30% ITC)
9.8 yr
hypothetical
25-Year ROI
78%
return on investment
Incentive Breakdown — Arkansas
Available incentives for a typical 7kW residential solar system in Arkansas
Federal ITC (25D)
ExpiredThe federal solar Investment Tax Credit expired on January 1, 2026. No federal credit available for new installations.
State Tax Credit
NoneArkansas does not offer a state tax credit for solar installations.
SREC Market
Not AvailableArkansas does not have a traditional SREC market.
Property Tax Exemption
No statewide property tax exemption for solar
Sales Tax Exemption
No statewide sales tax exemption for solar
Key Incentives: No major state-level incentives currently available.
Solar Math — With vs Without Federal ITC
Cost breakdown for a typical 7kW residential system in Arkansas
2026 Reality (No Federal ITC)
- System Size
- 7 kW
- Cost per Watt
- $2.60/W
- Gross Cost
- $18,200
- Federal ITC
- $0
- Net Cost
- $18,200
- Annual Savings
- $1,298/yr
- Payback Period
- 14 years
Hypothetical (With 30% ITC)
- System Size
- 7 kW
- Cost per Watt
- $2.60/W
- Gross Cost
- $18,200
- Federal ITC (30%)
- -$5,460
- Net Cost
- $12,740
- Annual Savings
- $1,298/yr
- Payback Period
- 9.8 years
Impact: Without the federal ITC, Arkansas homeowners face a 4.2-year longer payback period — paying $5,460 more out of pocket.
Net Metering Policy — Arkansas
How Arkansas compensates your excess solar production
Reduced export credits or net billing — you earn less than retail for excess solar. Moderate impact on payback.
Arkansas mandates net metering but credits are based on the utility's avoided cost, typically below retail rate.
Cost Per Watt Benchmark — Arkansas
Arkansas Average
$2.60/W
National Average
$3.05/W
Typical 7kW System
$18,200
Arkansas's average installed cost is below the national average of $3.05/W
Breakeven Timeline
Without the federal ITC, a typical 7kW system in Arkansas breaks even in 14.0 years. With the former 30% ITC, payback would drop to 9.8 years.
Without Federal ITC
14
years to break even
With Former 30% ITC
9.8
years to break even
Production Details
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