If a neighbor tells you their Arkansas solar panels wiped out their power bill, they are probably telling the truth and it is probably irrelevant to you. Act 278 of 2023 closed one-to-one net metering to anyone whose interconnection paperwork landed after September 30, 2024. Everyone who beat that date keeps their old terms until 2040. Everyone since is on a different deal, and comparing the two is the most common mistake made here.
Two Arkansas Markets, Side by Side
When the interconnection paperwork landed | How your output is valued | How long it lasts |
|---|---|---|
On or before September 30, 2024 | One-to-one retail netting, kilowatt for kilowatt | Until June 1, 2040 |
After September 30, 2024 | Imports at retail; every exported unit at avoided cost | Redetermined every year, indefinitely |
The distinction is not a technicality. Under the current arrangement, power you draw from the grid still costs retail, modeled at the 12.81¢ statewide average residential rate, while every unit your roof sends back earns the avoided cost. At Entergy Arkansas, which serves roughly 42% of households, that rate is 3.34¢ per kilowatt-hour under Schedule 71 for the year running from March 2, 2026.
So the same panel on the same roof is worth the 12.81¢ statewide average when the house uses it and 3.34¢ when it does not. A grandfathered neighbor gets the 12.81¢ statewide average either way. That is the whole difference, and it is worth several years of payback.
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The Rate Moves Both Ways, Which Is Unusual
Most states that replaced net metering have since watched their export credit fall. Arkansas did something different: the avoided cost is recalculated annually against a trailing twelve months of wholesale market prices, so it tracks the market rather than a policy preference.
This year that worked in homeowners’ favor. Entergy’s figure rose from 2.47¢ to 3.34¢, an increase of about 35%. It could fall again next March with equal ease, and neither direction is a forecast anyone can sell you.
What this means practically is that an Arkansas proposal built on this year’s export rate is describing one year of a twenty-five year investment. Ask any installer to show the same design at a materially lower export figure. If the answer barely moves, your design is sound. If it collapses, you are buying exposure to a wholesale market.
What It Costs and What It Returns
Arkansas has the 4th-cheapest installations in the country at $2.51 per watt, 13.4% below the US average, and electricity prices that have risen about 4.68% a year over five years. Both work in your favor and neither is small. A typical system is 9.04 kW at about $22,693, producing roughly 12,575 kWh a year against household use of around 1,048 kWh a month.
Household pattern | What the year is worth at the 12.81¢ statewide average | Years to break even |
|---|---|---|
Grandfathered on one-to-one netting (every kWh at retail) | $1,611 | 14 years |
New customer, home most of the day (about 85% used on site) | $1,432 | 16 years |
New customer, mixed usage (about 60% used on site) | $1,135 | 20 years |
New customer, out during the day (about 40% used on site) | $896 | 25 years |
The statewide average is a benchmark rather than a tariff anyone is billed. Your bill comes from Entergy Arkansas, SWEPCO or a cooperative at that utility’s own filed rate, so rerun every row with the rate on your own bill and your own utility’s avoided-cost figure. To place yourself, compare what the house runs between roughly 9 a.m. and 4 p.m. with what it runs in a full day. Without storage, most households sized to their full annual usage land between the mixed row and the out-during-the-day row; the mixed row already assumes a daytime-heavy house, and reaching the 85% row usually takes storage, daytime electric vehicle charging or a home office that runs all day.
Read the gap between the first and last rows as the cost of the calendar. Same equipment, same sunshine, eleven years apart, decided entirely by paperwork dates and by how much of the output the house happens to absorb.
Sizing Matters More Here Than It Used To
Under one-to-one netting, a slightly oversized system was harmless: the extra output simply banked against later consumption at the same value. Under the current arrangement it is not harmless at all, because every exported unit drops from the 12.81¢ statewide average to 3.34¢.
That inverts the usual sales logic. A bigger Arkansas array today produces a worse return per dollar, not a better one, and a quote sized to fill the roof is working against you. Anything that raises daytime consumption, whether that is a home office, an electric vehicle charged during daylight or storage shifting output into the evening, does more for the arithmetic than adding panels does. Storage adds to the ticket and has its own payback, so price it separately.
One useful detail in your favor: under the current tariff you keep the renewable energy certificates associated with your generation. They are yours to hold or sell, and they should not be quietly assigned away in a contract you sign.
When to Say No in Arkansas
- If the house is empty through the day and storage is not part of the plan. A twenty-five year payback on twenty-five year equipment is not an investment.
- If a quote uses a neighbor’s savings as evidence. Unless that neighbor interconnected by September 30, 2024, they are on different terms, and if they did, their numbers cannot be yours.
- If a purchase proposal shows a state or federal credit. Arkansas has no state solar tax credit and no statewide rebate, and Section 25D is $0 for purchased systems whose installation is completed after December 31, 2025 under Public Law 119-21. Solar leases are legal in Arkansas (residential PPAs are restricted), and a leasing company may qualify for the separate Section 48E business credit under current deadlines; whether any of that value reaches your payment depends on the contract, so ask for both in writing. No company currently offers leases to Arkansas homeowners, so treat any such offer as one to verify.
- If the design assumes this year’s export rate holds. It is redetermined annually against wholesale prices and it moved 35% in a single year.
- If a cooperative serves you. Carroll Electric, First Electric and others file their own avoided-cost rates, so the Entergy figure will not describe your bill.
Arkansas remains a reasonable place to buy solar for a household that uses power during the day, largely because installations are cheap and electricity prices are climbing quickly. It is simply no longer the state it was two years ago, and the pitch has not always caught up. Our Arkansas incentives guide covers the tariff detail, and the Arkansas installer list covers who works here.
Get your own utility’s current avoided-cost figure in writing before you compare quotes, then enter your ZIP code to see which Arkansas installers can price a self-use system for your home.
Price a self-use system for your home
Arkansas Solar FAQs
For a household that keeps most of its output on site, yes, at a simple payback around 16 years on our figures; a typical mixed-usage household lands nearer 20 years, and a house that is empty all day stretches to about 25 years, where the case is weak. Arkansas installations are the 4th-cheapest in the country at $2.51 per watt and electricity prices have risen about 4.68% a year, both of which help, but exported power now earns far less than the power it replaces. Plan to own the house past the break-even year, or price the system into the sale.
For new customers, yes. Act 278 of 2023 closed one-to-one retail net metering to anyone whose interconnection paperwork landed after September 30, 2024. Customers who beat that date keep one-to-one netting until June 1, 2040. New customers pay retail for what they import and receive the utility’s avoided cost for everything they export, which at Entergy Arkansas is 3.34¢ per kilowatt-hour under Schedule 71 for the year from March 2, 2026.
Nobody can tell you. It is recalculated every year against a trailing twelve months of wholesale market prices, so it tracks the market in both directions. This year it rose from 2.47¢ to 3.34¢, an increase of about 35%, and it could fall next March just as easily. Ask any installer to model your design at a materially lower export figure and see how much the answer moves.
Smaller than it would have been under the old rules. Because exported power earns 3.34¢ against the 12.81¢ statewide average retail rate, capacity beyond what your house consumes during daylight returns roughly a quarter as much. A bigger array in Arkansas today returns less per dollar. Raising daytime consumption through storage or daytime electric vehicle charging does more for the arithmetic than adding panels, though storage adds to the ticket and has its own payback, so price it separately.
No state solar tax credit and no statewide rebate. The federal residential credit under Section 25D is $0 for purchased systems whose installation is completed after December 31, 2025 under Public Law 119-21. Solar leases are legal in Arkansas and a leasing company may qualify for the separate Section 48E business credit under current deadlines, though no company currently offers leases to Arkansas homeowners and whether any of that value reaches your payment depends on the contract. One thing the current tariff does give you is ownership of the renewable energy certificates your system generates, which are yours to hold or sell and should not be quietly assigned away in a contract.
Methodology: figures use the EcoGen Solar Cost Index for Arkansas, $2.51 per watt as of March 1, 2026, a 9.04 kW system costing $22,693 and producing 12,575 kWh a year, self-used power valued at the 12.81¢ statewide average (labeled context; your utility’s filed residential rate governs), and exports at the Entergy Arkansas Schedule 71 avoided cost of 3.34¢ effective March 2, 2026, with no federal residential credit for host-owned systems. Payback figures are simple payback before financing, rate escalation (the state five-year average is 4.68%) and degradation. The one-time interconnection fee of $196.75 is not included and does not change the ranking.
References & Research Sources
EcoGen America reviewed Arkansas Public Service Commission material on net metering rules and Act 278 of 2023 for the closure of one-to-one retail net metering to interconnection paperwork filed after September 30, 2024, the grandfathering of earlier customers until June 1, 2040, and the structure under which new customers pay retail for imports and receive annually redetermined avoided cost for all exports; the Entergy Arkansas Schedule 71 tariff filed under Docket 23-070-TF for the rate of 3.34¢ per kilowatt-hour effective March 2, 2026 against the prior year’s 2.47¢, the trailing twelve-month wholesale market basis for that calculation, the interconnection fee of $196.75 for systems under 300 kW, and the customer’s retention of renewable energy certificates; the Database of State Incentives for Renewables and Efficiency for the absence of an Arkansas state solar tax credit or statewide rebate; EIA Electric Power Monthly for the 12.81¢ statewide average residential price and the five-year growth rate of roughly 4.68% a year; and IRS guidance on the Public Law 119-21 termination of Section 25D. Output of 1,391 kWh per kilowatt per year, 5.25 peak sun hours, the 9.04 kW system size, the $22,693 installed cost, the $2.51 per watt figure and the 1,048 kWh monthly usage are EcoGen America figures for Arkansas dated March 1, 2026. Cooperatives and municipal utilities file their own avoided-cost rates and are not described by the Entergy figure. Utility shares of residential customers are from EIA-861 2024. Sources accessed between June 10 and August 18, 2026.
