Solar Incentives in Arkansas
Arkansas homeowners considering solar in 2026 have access to one active state-level incentive: a net-metering and net-billing framework administered by the Arkansas Public Service Commission under its Net-Metering Rules (23 CAR Part 457), revised to implement Act 278 of 2023, the Arkansas Cost-Shifting Prevention Act. Under this program, jurisdictional electric utilities are required to interconnect customer-owned renewable generation, including rooftop solar. The credit rate a customer receives for excess generation sent to the grid depends on when their interconnection paperwork was filed and which utility serves them — export compensation varies by utility and by customer category, so homeowners should confirm their specific terms directly with their utility or the Commission.
At the federal level, the residential Clean Energy Credit under Internal Revenue Code §25D — commonly known as the 30% solar tax credit — expired for systems placed in service after December 31, 2025, under the One Big Beautiful Budget Act (Pub. L. 119-21). A homeowner installing a new residential solar system in 2026 does not qualify for that federal credit. The absence of this significant incentive lengthens the payback period compared to prior years when the credit was available, and prospective buyers should factor this into any financial analysis.
Arkansas's residential electricity rate averaged approximately 13.63 cents per kilowatt-hour as of March 2026, up about 1.04 cents from the prior year. At that rate, self-consumed solar generation still offsets bill costs, but without the federal credit, overall project economics depend more heavily on system cost, local utility export rates, and electricity price trends.
These figures are verified as of June 2026 against official sources; programs change each legislative session and rate case, and the Arkansas Public Service Commission (www.apscservices.info) remains the authoritative source for current rules.
Federal credit update. The federal residential Clean Energy Credit (the 30% “solar tax credit” under §25D) expired for systems placed in service after December 31, 2025. New 2026 residential installs do not qualify; a 2025 install can still be claimed on a 2025 return (IRS Form 5695). What this means for 2026 →
Current solar incentives in Arkansas
Arkansas Net-Metering / Net-Billing (Arkansas Cost-Shifting Prevention Act of 2023)
Arkansas requires its jurisdictional electric utilities to interconnect customer-owned renewable generation, including solar, under the Commission's Net-Metering Rules (23 CAR Part 457), which were revised to implement Act 278 of 2023 (the Arkansas Cost-Shifting Prevention Act). Customers who qualified for legacy or legacy-transitional status -- generally by submitting a Standard Interconnection Agreement (or an equivalent facilities agreement with paid make-ready costs) before September 30, 2024 -- remain under the pre-2023 full retail 1:1 net-metering rate structure until June 1, 2040, with kWh credits that never expire and carry forward indefinitely. Customers interconnecting after the legacy window are billed instead under an alternative rate structure that each utility elects pursuant to Ark. Code Ann. § 23-18-606, so the crediting rate for exported energy varies by utility tariff (compliance tariffs were filed in APSC Docket No. 23-070-TF). For all customers, the utility must buy out remaining export credits at its avoided cost when the customer leaves the utility, stops operating the facility, or transfers it, and legacy customers may cash out credits older than 24 months at avoided cost if the balance is at least $100.
| Amount | Legacy/legacy-transitional customers (interconnection paperwork before September 30, 2024): 1:1 retail kWh crediting until June 1, 2040, credits never expire. Non-legacy customers: credited under the utility-elected rate structure of Ark. Code Ann. § 23-18-606; varies by utility -- see the utility's APSC-approved net-metering tariff. Avoided-cost buyout of credit balances at account closure (and at customer election for legacy credits older than 24 months when >= $100). |
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| Who qualifies | Customers of Arkansas electric utilities jurisdictional to the Arkansas Public Service Commission with on-site renewable generation (solar, wind, hydroelectric, geothermal, biomass, etc.); facility size limited by statute (Ark. Code Ann. § 23-18-603(9)) and by the customer's highest monthly usage, whichever is less. Meter aggregation to additional commonly-owned meters in the same service territory is allowed on request. |
| Administered by | Arkansas Public Service Commission |
Source: 23 CAR §§ 457-101 to 457-206 (APSC Net-Metering Rules, as revised in Docket No. 23-021-R); Ark. Code Ann. § 23-18-601 et seq. (Arkansas Cost-Shifting Prevention Act of 2023, Act 278 of 2023) Official source →
Compare solar incentives across all states → · Check what applies to you →
Programs verified as of June 2026 against official state and federal sources (each cited above); refreshed quarterly as legislatures and utility rate cases change the rules. How we verify this data. This page is informational only — not tax or legal advice.