Arkansas changed its net metering rules in October 2024. Anyone installing solar now earns avoided-cost export credits — not full retail. Know what changed before estimating your ROI.
Arkansas changed its statewide net metering rules around September 29–30, 2024, affecting both Entergy Arkansas and the state's electric cooperatives (First Electric, South Central Arkansas Electric, Southwest Arkansas Electric, Craighead Electric, Arkansas Valley Electric, and others). Homeowners who interconnected solar before this date are grandfathered into Legacy Net Metering — full 1:1 retail-rate credit through June 2040.
Anyone installing solar now in 2026 falls under Non-Legacy Net Metering — exported surplus solar earns an avoided-cost (wholesale) rate, not the full retail rate. Many online guides still describe Arkansas as offering full 1:1 net metering. That is only true for customers who went solar before October 2024. If you are a new customer in 2026, your exports earn meaningfully less per kilowatt-hour.
The 30% federal residential solar tax credit (Section 25D) expired December 31, 2025 and does not apply to systems installed in 2026 or later. Numerous online guides about Arkansas solar — including some published recently — still incorrectly describe this credit as available through 2032 under the Inflation Reduction Act. That law was subsequently changed. Be cautious of any installer whose quote includes a "30% federal tax credit" for a 2026 installation. Confirm this with a tax professional.
Find out how much you can save based on your location and current energy usage.
The October 2024 net metering rule change is the dominant fact about Arkansas solar for anyone installing now. Here's the full picture — utility by utility, incentive by incentive.
The practical impact: every kilowatt-hour you produce and consume yourself still saves you the full retail rate (~12–14¢/kWh). But every kilowatt-hour you export earns only the avoided-cost/wholesale rate — a meaningful difference that most generic online solar calculators do not account for. Self-consumption optimization is far more important in Arkansas now than before October 2024.
For Entergy Arkansas customers under Non-Legacy Net Metering, the avoided-cost credit rate is based on the 12-month average MISO locational marginal price for Entergy's load zone, recalculated annually through a filing with the Arkansas Public Service Commission.
This rate is not fixed — it changes year to year based on wholesale electricity market prices, and it is significantly below Entergy Arkansas's residential retail rate of roughly 12–14 cents/kWh. Because the number changes annually, check Entergy Arkansas's current published Non-Legacy rate directly before finalizing any payback estimate.
Entergy Arkansas raised residential rates by approximately $6/month for a 1,000 kWh customer following a rate case approved by the Arkansas PSC in early 2026 — an upward trend that increases the value of solar you consume directly.
For customers of Arkansas's electric cooperatives (First Electric, South Central Arkansas Electric, Southwest Arkansas Electric, Craighead Electric, Arkansas Valley Electric, and others under the AECC umbrella), the Non-Legacy structure has a modest structural advantage over Entergy.
Excess kilowatt-hours generated within a billing period first go into a kWh credit bank that does not expire and rolls forward to offset future consumption. Only truly stranded unused credits that remain unabsorbed are eventually settled at the avoided-cost/wholesale rate.
This gives co-op customers more time to use their surplus through their own consumption before credits are settled at the lower avoided-cost rate — a real distinction from Entergy's structure. Confirm current credit-bank terms with your specific cooperative directly, as policies may have individual variations.
Arkansas's sales tax treatment of solar equipment is one area where public information is genuinely inconsistent, and we are presenting it honestly rather than asserting a specific answer.
Some sources describe no statewide sales tax exemption for solar equipment in Arkansas. Others reference a partial exemption under what has been called "Act 1114" of Arkansas law. The current scope, status, and applicability of any such exemption is not clear from publicly available information.
Confirm the current sales tax treatment for solar equipment directly with your installer or with the Arkansas Department of Finance and Administration (dfa.arkansas.gov) before finalizing your system cost estimates. This matters for understanding your true upfront cost.
Arkansas allows individual cities and counties to offer a local-option property tax exemption on the added value of a solar installation — but this is not a guaranteed statewide exemption that applies uniformly across Arkansas.
Whether your home's increased assessed value from going solar is exempt from property tax depends on whether your specific city or county has adopted this local option. Some jurisdictions have, others have not.
Check with your city or county tax assessor's office to confirm whether a solar property tax exemption applies in your specific location before counting on this benefit in your long-term savings estimates.
The 30% federal residential solar tax credit under Section 25D of the Internal Revenue Code expired December 31, 2025. Systems installed in 2026 or later are not eligible for this credit.
This is especially important to flag for Arkansas homeowners: numerous online guides about Arkansas solar — including some recently published ones — still incorrectly describe the 30% federal credit as available through 2032. That refers to earlier law (the Inflation Reduction Act as originally enacted), which was subsequently changed, allowing the residential credit to expire at the end of 2025.
Be cautious of any Arkansas installer whose proposal still includes a "30% federal tax credit" for a 2026 installation. That credit does not exist for residential solar systems installed this year. Confirm with a tax professional if your installer references federal incentives. The absence of this credit materially extends payback periods compared to pre-2026 estimates.
The October 2024 Non-Legacy Net Metering rule applies statewide to both Entergy Arkansas and Arkansas's electric cooperatives. Individual cooperative credit-bank structures may vary. Contact your specific provider directly before estimating savings:
Arkansas receives approximately 4.6–5.0 peak sun hours per day on average — a solid solar resource. But the financial outcome in 2026 depends heavily on how much of your solar production you consume directly, given that Non-Legacy exports earn only avoided-cost rates.
Strategies that maximize self-consumption matter more now than before October 2024: right-sizing your system to match your actual annual usage (rather than oversizing to maximize exports), running high-consumption appliances — dishwashers, washing machines, EV chargers, pool pumps — during peak solar production hours, and potentially adding battery storage to shift afternoon solar generation into evening consumption.
When getting quotes, ask every installer to show you a month-by-month production vs. consumption model that uses current Non-Legacy net metering rates — not legacy 1:1 assumptions. An estimate that still assumes full retail credit for all exports will overstate your savings in 2026.
Arkansas changed its statewide net metering rules effective around September 29–30, 2024, affecting both Entergy Arkansas (the state's dominant investor-owned utility) and the state's electric cooperatives under the Arkansas Electric Cooperative Corporation umbrella. The change created two distinct classes of solar customers: Legacy Net Metering (grandfathered full 1:1 retail-rate credit) and Non-Legacy Net Metering (avoided-cost export credit). Anyone who interconnected solar before approximately September 29–30, 2024 is grandfathered into Legacy Net Metering with full 1:1 retail-rate credit through June 2040. Anyone installing solar in 2026 — or after that October 2024 cutoff — falls under Non-Legacy Net Metering instead. Under Non-Legacy, your excess solar exported to the grid is credited at the utility's avoided-cost (wholesale) rate rather than the full retail rate. This is meaningfully lower than what you pay for electricity. Many generic solar guides and online calculators still describe Arkansas as offering full 1:1 net metering — that is only true for pre-October-2024 legacy customers. If you are installing solar now, you are a non-legacy customer, and your export credits will be at avoided-cost rates, not retail. This is the most important fact to understand before getting Arkansas solar quotes in 2026.
For Entergy Arkansas customers under Non-Legacy Net Metering, the avoided-cost export credit rate is based on the 12-month average MISO (Midcontinent Independent System Operator) locational marginal price for Entergy's load zone, recalculated annually through a filing with the Arkansas Public Service Commission. It is not a fixed rate — it changes year to year based on wholesale electricity market prices. This rate is significantly below Entergy Arkansas's residential retail rate (currently roughly 12–14 cents/kWh). Because the avoided-cost rate changes annually and we cannot guarantee the figure stated here is current, homeowners should check Entergy Arkansas's current published Non-Legacy Net Metering rate directly on their website or through the Arkansas Public Service Commission's docket system before finalizing any payback estimate. The practical implication: solar energy you consume directly from your own panels is still valued at the full retail rate you'd otherwise pay — maximizing your own consumption of solar output matters far more in Arkansas now than it did under the old 1:1 regime.
Yes, there is a modest structural difference worth knowing. For customers of Arkansas's electric cooperatives — including First Electric Cooperative, South Central Arkansas Electric Cooperative, Southwest Arkansas Electric Cooperative, Craighead Electric Cooperative, Arkansas Valley Electric Cooperative, and others under the Arkansas Electric Cooperative Corporation umbrella — excess kilowatt-hours generated within a billing period first go into a kWh credit bank that does not expire and rolls forward to offset future consumption. Only truly stranded credits that remain unused are eventually settled at the avoided-cost/wholesale rate. This is a modestly more favorable structure than Entergy Arkansas's straightforward avoided-cost payout for excess monthly generation, because it gives you more time to 'use' your surplus credits through your own consumption before they are settled at the lower avoided-cost rate. However, it still means persistent over-generation — like producing far more in summer than you can use — will eventually earn only wholesale rates for the excess. Confirm current credit-bank terms with your specific cooperative, as cooperative policies may have individual variations within the AECC framework.
Arkansas has one of the lower average residential electricity rates in the country — roughly 12–14 cents per kilowatt-hour on average. Entergy Arkansas's average residential bill runs approximately $145/month. Importantly, Entergy Arkansas received approval from the Arkansas Public Service Commission in early 2026 for a rate increase that added approximately $6/month for a typical 1,000 kWh residential customer. This upward trend is worth factoring into long-term savings estimates — higher future rates improve the value of solar generation you consume directly. However, Arkansas rates starting from a below-average baseline means the absolute dollar value of each kilowatt-hour of solar generation is lower than in higher-rate states like Massachusetts or Connecticut, which affects payback period calculations.
This is genuinely unclear from publicly available sources, and we are presenting it honestly rather than asserting a specific answer. Some sources describe no statewide sales tax exemption for solar equipment in Arkansas. Others reference a partial exemption under what has been called 'Act 1114' of Arkansas law. The status, scope, and current applicability of any such exemption is inconsistent in public information. Rather than risk giving you incorrect information that affects your system cost estimate, we recommend confirming the current sales tax treatment for solar equipment directly with your installer or with the Arkansas Department of Finance and Administration (dfa.arkansas.gov) before finalizing your purchase.
Arkansas allows individual cities and counties to offer a local-option property tax exemption on the added value of a solar installation — but this is not a guaranteed statewide exemption that applies uniformly across the state. Whether your home's increased value from going solar is exempt from property tax depends on whether your specific city or county has adopted this local option. Some jurisdictions have, others have not. Check with your city or county tax assessor's office to confirm whether a solar property tax exemption applies in your specific location before counting on this benefit in your payback estimates.
No. The 30% federal residential solar tax credit under Section 25D of the Internal Revenue Code expired December 31, 2025. Systems installed in 2026 or later are not eligible for this credit. This is especially important to flag for Arkansas homeowners because many generic online guides about Arkansas solar — including some recently published ones — still incorrectly describe the 30% federal credit as available through 2032. That information is outdated and refers to earlier law before the credit was allowed to expire at the end of 2025. Be cautious of any installer or solar quote that still advertises 'claim 30% back from the federal government' for a 2026 installation — that credit no longer exists for residential systems. Confirm this with a tax professional if your installer references federal incentives in their proposal.
Payback period in Arkansas is harder to estimate in 2026 than it was before the October 2024 net metering rule change — and any generic calculator that still assumes full 1:1 net metering will give you a misleadingly optimistic answer. Key factors working against fast payback: Non-Legacy Net Metering means surplus exports earn avoided-cost rates (well below retail), below-average electricity rates of 12–14 cents/kWh reduce the per-kWh value of solar generation, and the 30% federal tax credit is no longer available. The practical implication is that right-sizing your system to match your actual annual usage (to minimize low-value exports) and maximizing self-consumption of solar output matters more in Arkansas than in states with full 1:1 net metering. Get quotes from Arkansas-based installers who specifically model Non-Legacy net metering rates in their cash flow projections — not installers who still quote based on legacy 1:1 net metering assumptions. Demand a month-by-month production and consumption comparison to understand how much of your production you'll actually consume versus export at avoided-cost rates.
DISCLAIMER: All estimates are approximations based on regional averages. Actual savings vary by location, roof orientation, utility provider, and installer. This calculator does not guarantee specific savings.
Electricity rates last updated: August 2026 (source: EIA)