Arkansas's solar story in 2026 leads with one fact most coverage hasn't caught up to: the famous 1:1 full-retail net metering ENDED for new systems on September 30, 2024. If you're reading a quote dated 2026 that still describes Arkansas as having "one of the best 1:1 net metering policies in the country" — that's OUTDATED. It applies only to systems grandfathered before October 2024, which keep 1:1 retail terms for 20 years (through 2044). A new 2026 buyer is on NLN-M net billing, NOT 1:1.
The headline:
- Act 278 of 2023 moved new systems to NET ENERGY BILLING with INSTANTANEOUS NETTING, effective for installations after September 30, 2024. Monthly banking of generation is NO LONGER ALLOWED.
- Self-consumed at retail (about $0.105/kWh). Instantaneous EXCESS exported is credited at Entergy Arkansas's Non-Legacy Net-Metering (NLN-M) rate of about $0.089/kWh (retail minus distribution charges) — NOT retail.
- Annual NET-EXCESS SURPLUS (cumulative production exceeding annual consumption): settled at AVOIDED COST about $0.04/kWh.
- NLN-M export rate is RESET ANNUALLY by APSC — can fall further.
- Grandfathering (context, not modeled): pre-Sept-30-2024 systems keep 1:1 retail for 20 years (through 2044). The calculator default is a new 2026 install on NLN-M.
- Both IOUs follow the same framework: Entergy Arkansas (central / eastern AR, Little Rock) and SWEPCO (northwest AR, Fayetteville). Co-ops and municipals vary.
- Federal §25D = $0 for systems installed after December 31, 2025 (OBBBA P.L. 119-21, signed July 4, 2025).
- NO state income tax credit.
- Property tax NOT EXEMPT at state level (local-option claims; verify with county assessor — don't assume).
- Sales tax NOT EXEMPT for residential — AR 6.5% state + local (combined about 9-11%). "Act 1114" claims not confirmed for residential rooftop.
- NO SREC market, no RPS.
- NO statewide battery rebate.
- About $2.47-2.85 per watt install pricing — among cheaper US markets (modeled at $2.65 default).
- Typical solar-only payback 14-18 years with federal $0 and net-billing export.
Sources citing 9-12 year payback assume BOTH the dead 30% federal credit AND the old 1:1 net metering — neither applies to a 2026 cash buyer. Self-consumption and batteries are now critical to the math because exports earn far below retail.
The case for Arkansas solar in 2026: retail offset on self-consumed power + excellent sun resource + cheap install pricing. The drags: 1:1 ended, federal $0, no state credit, sales NOT exempt, property NOT exempt at state level, no SREC, no battery rebate, exports far below retail.
What changed federally — and what's still on Arkansas quotes that shouldn't be
The federal Residential Clean Energy Credit (§25D) — the 30% homeowner credit — was repealed for systems installed after December 31, 2025. For 2026 Arkansas buyers, the federal credit on a purchased system is $0. The same applies to home batteries purchased outright. The §48E commercial credit (30%) still exists, but only for leased or third-party-owned systems where construction begins before July 4, 2026 — and the lessor claims it, not you. Full federal context here.
The repeal came through the One Big Beautiful Bill Act (P.L. 119-21), signed July 4, 2025. Arkansas-focused solar sites are slow on this — any 2026 quote still showing "30% federal through 2032" is using the dead pre-OBBBA schedule. If a 2026 AR quote includes "30% federal solar tax credit" on a cash purchase, ask the contractor to redo the math with $0 federal and verify with IRS.
VERIFIED 2026-06 · IRS §25D repeal under OBBBA P.L. 119-21The 1:1 net metering era ended September 30, 2024
This is the single most important Arkansas solar fact in 2026, and the part most coverage still gets wrong.
Act 278 of 2023 authorized the Arkansas Public Service Commission (APSC) to restructure net metering for new systems. The APSC implementation set the cutoff at September 30, 2024:
- Systems installed ON OR BEFORE September 30, 2024: grandfathered to 1:1 retail net metering for 20 YEARS (through 2044). These customers keep the old favorable terms.
- Systems installed AFTER September 30, 2024 (all new 2026 buyers): NET ENERGY BILLING under Entergy Arkansas's Non-Legacy Net-Metering (NLN-M) tariff and equivalent SWEPCO terms.
The new (NLN-M) mechanism for 2026 buyers:
- INSTANTANEOUS NETTING — monthly banking of generation is NOT allowed. You self-consume in real time at retail (~$0.105/kWh).
- Any instantaneous EXCESS exported is credited at about $0.089/kWh — retail minus distribution charges. NOT full retail.
- Annual NET-EXCESS SURPLUS (cumulative production over a year exceeding annual consumption): settled at AVOIDED COST about $0.04/kWh.
- NLN-M export rate is RECALCULATED ANNUALLY by APSC — it can be revised down in future filings.
MYTH ALERT: many Arkansas solar marketing sites still describe AR as having "one of the best 1:1 net metering policies in the country." That description is OUTDATED for 2026. It applies only to systems grandfathered before October 2024. A new 2026 buyer does NOT get 1:1. If a contractor's payback math assumes full retail export on a 2026 install, the numbers are wrong.
This calculator models the new 2026 NLN-M case correctly.
VERIFIED 2026-06 · APSC Act 278 / Entergy NLN-M / UADAUtility coverage — Entergy and SWEPCO, plus co-op / municipal caveat
The APSC NLN-M framework applies to both Arkansas investor-owned utilities:
- Entergy Arkansas (default modeled — Little Rock metro, central and eastern AR). Retail about $0.105/kWh; NLN-M export about $0.089/kWh.
- SWEPCO (Southwestern Electric Power Company, AEP subsidiary — northwest AR including Fayetteville). Same APSC NLN-M framework; verify SWEPCO's specific tariff filing.
Co-ops and municipal utilities vary — terms are NOT bound by the APSC IOU framework. If you're not on Entergy or SWEPCO, verify your specific utility's tariff in writing before signing.
State income tax credit — does NOT exist
Arkansas has NO state solar income tax credit. The state-level financial picture in 2026 is the NLN-M net-billing framework — and that's it.
If a contractor includes an "Arkansas state solar credit" line in your quote, ask for the statute citation; there isn't one.
Property tax — NOT exempt at state level (verify locally)
Arkansas does NOT exempt residential solar from property tax at the state level. Some sources reference local-option exemptions — these are NOT statewide and NOT confirmed for residential rooftop.
Conservative treatment: do NOT assume a property tax exemption. Verify with your county tax assessor before counting on any benefit. If your specific county has a local-option exemption that applies to residential rooftop, that's a bonus to your modeled payback; don't bake it in upfront.
Sales tax — NOT exempt for residential (verify)
Arkansas does NOT exempt residential solar from sales tax. AR state sales tax is about 6.5% plus local rates (combined typically about 9-11% depending on jurisdiction).
One source claims an "Act 1114" sales tax exemption applies to solar — this is NOT confirmed for residential rooftop. Conservative treatment: assume normal sales tax applies. Verify with the Arkansas Department of Finance and Administration before signing. Your installer's quote should include sales tax — if your installer claims an exemption, ask for the specific 2026 statute citation.
SREC / RPS — does NOT exist
Arkansas has NO Renewable Portfolio Standard and NO SREC market for residential. There is no SREC revenue stream available to AR residential solar owners. Any quote citing "SREC revenue" is fictional.
Battery — no rebate, resilience case + arbitrage matters more now
No statewide battery rebate in Arkansas. Federal storage credit is $0 (§25D repealed for storage purchase).
Arbitrage gap matters MORE under the new NLN-M framework than it would under 1:1:
- Retail $0.105 vs NLN-M export $0.089 = gap about $0.016/kWh (modest, but real).
- Retail $0.105 vs annual-surplus avoided cost $0.04 = gap about $0.065/kWh (more meaningful for oversized systems).
- Battery captures retail value on stored solar that would otherwise export at the reduced rate.
$12,000 capex doesn't pay back on arbitrage alone, but the case is stronger now (under NLN-M) than it was under the old 1:1 era. Resilience case is real for Arkansas: severe weather, ice storms, summer storms. Battery as backup makes more sense than as ROI tool, but the arbitrage delta now adds meaningful value too.
The honest payback — 14-18 years post-Act-278
At default install pricing of about $2.65/W (range $2.47-2.85; Arkansas is among the cheaper US install markets), typical solar-only payback runs in the 14-18 year range with the federal credit at $0 and the new NLN-M net-billing export.
- Sources citing about 9-12 year payback for Arkansas assume BOTH the now-dead 30% federal credit AND the old 1:1 net metering (pre-Act-278). NEITHER applies to a 2026 cash buyer. Don't use those figures.
- Self-consumption and batteries are now critical to the math because exports earn far below retail. Right-size tightly to your load; load-shift toward daylight; consider a battery to capture more retail value.
- Cheap install pricing helps, but it doesn't fully offset the export-rate cut.
The structural changes in Act 278 + the federal repeal + the unchanged sales-not-exempt and property-not-exempt status all stack against the 2026 buyer relative to a 2024 grandfathered buyer. Arkansas solar is still viable for 2026 — just not the bargain it was.
VERIFIED 2026-06 · eia.govHow to read this — Arkansas's case for solar
AR solar in 2026 is self-consumption-driven and timing-sensitive to APSC future filings.
- Reject any quote that describes Arkansas as having "1:1 net metering." For a 2026 install, 1:1 ended September 30, 2024. The new mechanism is NLN-M instantaneous net billing — exports at about $0.089/kWh, not retail.
- Reject any 30% federal credit on a 2026 cash purchase. §25D was repealed effective for systems installed after December 31, 2025 (OBBBA P.L. 119-21, signed July 4, 2025) — sites still citing "30% through 2032" are using the dead pre-OBBBA schedule.
- Reject any payback figure under about 12 years. Those numbers assume both the dead 30% federal credit and the old 1:1 net metering — neither applies to a 2026 cash buyer.
- Reject any quote citing an Arkansas state solar income tax credit. Doesn't exist.
- Right-size to your load. Instantaneous netting punishes oversizing — exports earn about $0.089 vs $0.105 retail offset within consumption. Annual surplus pays only about $0.04. Match production to consumption tightly.
- Load-shift toward daylight. Self-consumed kWh at retail (
$0.105) vs exported kWh at NLN-M ($0.089) is a meaningful gap. Dishwasher, laundry, EV charging during solar production hours. - Don't assume sales tax exemption. AR 6.5% state + local applies — verify your specific local combined rate. "Act 1114" exemption claims are not confirmed for residential rooftop.
- Don't assume property tax exemption. Not statewide; some local-option claims. Verify with your county assessor; don't bake in.
- Don't budget for SREC revenue. Arkansas has no RPS, no market.
- Battery for resilience + meaningful arbitrage — the NLN-M era makes battery more valuable than it was under 1:1, but no statewide rebate, federal storage $0. Ice storms, severe weather are real for AR — backup case is real too.
- Watch APSC dockets for further erosion. The NLN-M export rate is reset annually by APSC; it can fall further in future filings. Existing systems would likely grandfather to whatever terms they interconnected under, but verify.
If you can right-size tightly to your load, take advantage of Arkansas's cheap install pricing, and you're on Entergy or SWEPCO (not a co-op with potentially worse terms), Arkansas solar is still a respectable case for 2026 — just expect 14-18 year payback rather than the under-12 figures from the pre-2025 era. If you were counting on the federal credit, on the old 1:1 net metering, on a state credit, on guaranteed sales / property tax exemption, or on SREC revenue — none of those apply to a 2026 cash buyer.
Run your real Arkansas payback →The honest picture
| Fact | Arkansas | Source |
|---|---|---|
| Mechanism | NET ENERGY BILLING with INSTANTANEOUS NETTING (post-Act-278) | Act 278 of 2023; APSC NLN-M |
| Federal credit | $0 (cash purchase) | IRS — §25D repealed under OBBBA P.L. 119-21 |
| State credit | NONE | (no statute) |
| SREC | NONE — no RPS, no market | (no market) |
| Property tax | NOT EXEMPT at state level (some local-option claims; verify with county assessor) | (no state statute) |
| Sales tax | NOT EXEMPT for residential — AR 6.5% state + local (combined about 9-11%); 'Act 1114' exemption claims not confirmed for residential rooftop | Arkansas Department of Finance and Administration |
| Net metering / export | INSTANTANEOUS netting — self-consumed at retail, instantaneous excess exported at REDUCED rate (NOT 1:1 for new 2026 installs) | Act 278; Entergy NLN-M |
| Excess credit rate | NLN-M about $0.089/kWh on instantaneous excess (retail minus distribution); annual net-excess surplus at AVOIDED COST about $0.04/kWh; reset annually by APSC | APSC NLN-M filings |
| Retail rate | About $0.105/kWh | EIA; Entergy Arkansas tariff |
| Install $/W | About $2.47-2.85 per watt before incentives (modeled $2.65 default — among cheaper US markets) | NREL; EnergySage |
| System cap | Per APSC tariff (residential systems far below cap in practice) | APSC |
| Battery treatment | No statewide rebate; federal storage $0; arbitrage gap matters more under NLN-M (about $0.016 vs export, up to about $0.065 vs annual-surplus avoided) | (no program); IRS |
| Payback range | About 14-18 years with federal $0 and NLN-M export (sources citing 9-12 years assume BOTH the dead 30% federal credit AND the old 1:1 net metering — neither applies to a 2026 buyer) | this calculator |
| Main risk | Compensation already cut once (Act 278, effective Sept 30, 2024); NLN-M export rate is reset annually by APSC — it can fall further. Continued erosion is the realistic trajectory | APSC dockets |
| Utility coverage | Mandate applies to Entergy Arkansas + SWEPCO (IOUs) on same APSC framework; co-ops and municipal utilities vary — verify if not on an IOU | Act 278; APSC |
| Right-sizing | Critical — instantaneous netting punishes oversizing because exports earn far below retail; size to on-site use, load-shift toward daylight | Entergy NLN-M; UADA |
Before you commit:
- Reject any quote that describes Arkansas as having "1:1 net metering" for a new 2026 install. The 1:1 era ended September 30, 2024 under Act 278 of 2023. Only systems grandfathered before October 2024 keep 1:1 terms (for 20 years, through 2044). New 2026 buyers are on NLN-M net billing — exports at about $0.089/kWh, NOT retail.
- Reject any 30% federal credit on a 2026 cash purchase. §25D was repealed effective for systems installed after December 31, 2025 (OBBBA P.L. 119-21, signed July 4, 2025) — sites still citing "30% through 2032" are using the dead pre-OBBBA schedule.
- Reject any payback figure under about 12 years. Those numbers assume BOTH the dead 30% federal credit AND the old 1:1 net metering. Neither applies to a 2026 cash buyer.
- Reject any quote citing an Arkansas state solar income tax credit. Doesn't exist.
- Don't assume sales tax exemption. AR 6.5% state + local applies. "Act 1114" exemption claims are not confirmed for residential rooftop — verify with the AR Department of Finance and Administration.
- Don't assume property tax exemption. Not statewide. Some local-option claims; verify with your county tax assessor.
- Right-size tightly to your load. Instantaneous netting + reduced NLN-M export rate punishes oversizing. Annual surplus at $0.04 avoided cost is even worse. Match production to consumption.
- Load-shift toward daylight. Self-consumed at $0.105 vs exported at $0.089 is a real gap; the more you self-consume, the better your payback.
- Watch APSC dockets for further erosion. The NLN-M export rate is reset annually — it can fall further in future filings.
- Battery for resilience + meaningful arbitrage. The NLN-M era makes battery more valuable than under 1:1; no statewide rebate and federal storage $0; ice storms and severe weather make backup a real consideration.
Estimates only — Entergy Arkansas NLN-M export rate is recalculated annually by the APSC and may change; SWEPCO net-metering tariff specifics may differ slightly from Entergy's; co-op and municipal utility terms vary widely and are not bound by the IOU APSC framework. Verify with the Arkansas Public Service Commission, your specific utility (Entergy Arkansas, SWEPCO, or your co-op / municipal), the Arkansas Department of Finance and Administration for sales tax confirmation, and your county tax assessor for any local-option property exemption. This is not financial advice.