Low Cost of Solar Panels in Arkansas: Solar Incentives, Tax Credits, Rebates

But even if you’re not convinced or not confident enough to permanently unplug from your energy supplier, there are numerous ways that you can benefit from installing solar power system in your home that will not only clean up your carbon footprint but also reduce your energy costs.

This guide explains the Arkansas solar incentives available that can be used to reduce the cost of solar panels in Arkansas.

Solar Panel Cost Calculator: Arkansas (Figure the Cost of Solar Panels in Arkansas)

Arkansas solar incentives are unfortunately not the best in the country, certain exemptions well, exempted.

Nevertheless, if you approach a PV system from a different angle going solar is achievable, just a little slower.

The traditional methodology is to calculate how much kWh your home consumes on a monthly or yearly basis by using an online solar panel calculator to estimate the overall cost.

The figures staring back at you from the screen and the balance in your bank balance may well be so far apart that any thoughts of installing an energy-saving system will be quickly squashed from your mind.

But that needn’t be the case. They always say that the best way to eat an elephant is one bite at a time, and the same method can apply to solar panels.

Instead of purchasing an entire system, why not downsize and purchase just a few 400 kWh panels, an inverter, and a small battery bank for storage that’s sufficient to empower your more energy-intensive appliances such as:

• Washing Machines
• Dishwashers
• Tumble Driers
• Heaters
• Water Heaters
• AC Units
• Fridges
• Freezers
• Ovens

To calculate the kWh for an oven, you will need to know the wattage and how many hours a day it is on for. If your oven is rated between 1,200-3,000 w that would equate to 1.2-3 kWh of electricity and would give you the basics on how to calculate how many kWh it will use per day and per month.⁸

If you used an average of 2 kWh, the calculations would look like this:

• 2 kWh x 2 hours a day = 4 kWh a day
• 4 x 30 days = 120 kWh
• 120 x 12 months = 1,440 kWh a year
• 1,440 ÷ 400 = 4 panels

A simple way to estimate the cost is to multiply 1,440 kWh by the average solar cost in Arkansas per kWh, which is $2.54.

• 1,440 x 2.54 = $3,657.60
• $3,657.60 – 30% tax credit = $2,560.32

Less solar panels will mean less energy production but there will still be savings on your utility bill and over a period of time, you can continue to add solar panels to your array to offset your utility costs.

And who knows, within a few years your electricity supply could be completely generated from your newly expanded PV system to such a degree that you can actually go off-grid, and no longer tethered to the energy grid.

Arkansas School Solar Panels Incentives (Arkansas Solar Incentives)

Having an expansive roof is a prerequisite for installing solar panels, especially more so if no land is available for ground mounting. The bigger the roof, the more solar panels can be fitted – and the more electricity can be produced.

This is undeniable and what is also undeniable is that solar power will save you money.

More and more schools in Arkansas, just as with many business leaders, are arriving at the realization that schools are as much a business enterprise with books that need to be balanced, staff that have to be paid, ongoing maintenance costs, and overheads that need to be covered and, of course, lights that need to be kept on.

School finances are not infinite and have to often be stretched to breaking point, often with building upgrades and repairs being constantly pushed aside for a later date.

However, due to the cost of solar panels in Arkansas, it is often a pipe dream for a school board to sanction the purchase of a PV system. A particular example was a school audit in Batesville that revealed a yearly electricity expenditure of $600,000 in the district.

It was unsustainable and created an ever-widening hole in the school’s budget.

Help came in the form of a power purchasing agreement agreement with a local Arkansas power company that enabled 1,400 solar panels to be installed in the school in 2017,⁹ alongside a bond that the school took out.

Within a few years, the effect was nothing short of miraculous as the utility costs were slashed, the $250,000-a-year budget deficit was turned into a $1.8 million surplus, and all the teachers were rewarded for their loyalty over the years by raises in their wages.

It wasn’t long before neighboring schools began to follow suit.

Not all of them will embark on such a large project with 1,400 panels, but the leasing or PPA options available demonstrate that solar conversion for schools is possible. More than 80% of schools undertaking this transition are partnering with third-party entities, so if your local school needs a little help, talk to your local Arkansas energy provider to see what assistance is out there.

Arkansas Solar Incentives: Solar Energy Arkansas and Net Metering

After weighing up all your options on which is the best method for changing over to solar energy, you come to the conclusion that none of them is a perfect fit, what other choices do you have?

You don’t qualify for the Residential Clean Energy Credit, the Arkansas solar incentives programs do not include the sales tax exemption, and, even if you could afford to buy the entire system with your life savings, there is no exemption on your property taxes from the extra value gained from fitting a new PV system to your rooftop.

Under these circumstances, net metering may well be the solution you’ve been looking for, enabling you to partake in this renewable clean energy resource that has the potential to make life just that little bit greener for you and may well just put some cash back into your pocket.

Arkansas has one of the most generous NEM programs in the nation, and enrolling in it couldn’t be easier.

Net metering works when your array is connected directly to the local electricity grid rather than to a battery storage bank.¹⁰

In this method, a smart meter, called a bidirectional meter, is fitted into your home to record all the necessary information about the amount of electricity your property is using, and not using.

It works when your solar panel system produces more energy than your home requires and the excess is transferred into the grid.

You earn credits for every kWh sent at a higher rate than what you are paying so when you do need to use electricity from the grid if the last few days have been very overcast, these credits will be attributed to your account automatically by the smart meter and reduce your monthly electricity costs.

During the night when the solar panels are producing no electricity at all, it will run that credit backward and create a balance between what is used and the results will be noticeable at the end of the month on your bill.

Only 20 to 40% of the production of a solar energy system is typically exported to the grid so there will always be a stable supply for your household, meaning you will not be left powerless.

In some states, and with some energy providers, the peak daily sunshine is so good that crediting the customer is pointless and a cashback scheme is occasionally available.

Always enquire with your provider what their NEM program entails so you get the best deal possible.

Solar Panel Cost Arkansas With the REAP Program

Not to be left out in the cold, the agricultural industry has been offered assistance in integrating solar power into their businesses under the Rural Energy for America Program.

Under this scheme, farmers and small rural businesses are offered loans and grants of up to 75% of the cost for renewable energy systems or to make energy efficiency improvements; this company helps to find and apply to these companies.

If you’ve ever had to search for funding resources, you will be keenly aware that it can be a time-consuming and soul-sucking endeavor with no guarantee at the end of it.

With REAP, they fill out reams of paperwork based on the information you provide and the type of funding you’re most interested in to launch your venture.

In fact, the Rural Energy for America Program has received nearly $2 billion in funding for renewable energy systems through 2031 as a result of the Inflation Reduction Act,¹¹ and because of that grants have recently been made available from the organization now, from $500,000 to $1 million.

If you have a big project or are looking for funding, you have to get in touch and REAP the rewards now.

Community solar farms are just one of the beneficiaries of this program.

Community Solar Farms in Arkansas (Solar Incentives to Reduce Energy Costs)

REAP funds farmers and solar community projects to mount an installation that provides electricity to local businesses and homes.

A community solar farm can also be funded by investors, a utility company, nonprofit organizations, or even a cooperative of individual local residents.

It functions under a contracted agreement where the participants receive an agreed-upon kWh of electricity production that is often purchased through a subscription model based on their expected usage or actual usage.

Adjustments are made to the project’s power output to reflect continual changes in capacity, technology, costs, and energy pricing on the open market.

Credit for the project’s power output is awarded to the participants through the local energy grid as credits on energy bills, proportionate to the level of investment.

This is an important aspect of this program as not everyone requires 700 kWh per month in Arkansas. If your energy consumption is less, you can purchase a lesser fixed amount each month, and the same if your needs are higher.

If you are in a situation where solar home installation is not possible either on your rooftop or in a ground-mounted location, or if you are from a low-income household, then a community solar farm is an excellent option for you to embark on and an economical path forward to relieve the burden of high electricity costs.¹²

So popular are these solar gardens becoming, that there is at least one community solar project in 40 U.S. states.

Arkansas has made sure not to be left behind with community projects being set up in Lake Village that will have the capacity to produce electricity for over 16,000 homes, while a smaller project in Camden will do the same but for only about 2,000 properties.

Recently, construction has started on what is to be the largest facility near Osceola in Mississippi County. When completed, there will be 650,000 solar panels generating enough electricity for 50,000 homes.

Arkansas Solar Program (Are Solar Panels Worth It in Arkansas?)

It’s safe to say that Arkansas isn’t leading the way in the solar revolution, languishing in the 30th position out of 50 states when it comes to converting to solar power.

While other states over the last few decades are racing ahead, enacting laws and offering solar incentives to appeal to homeowners, business people, and entrepreneurs, to adopt, manufacture and install utility-scale projects, Arkansas legislators are playing catch-up.

Part of the problem is that even though as a working resident of Arkansas you are eligible for the 30% federal tax break on solar purchases, there are not many other Arkansas solar incentives to entice many residents to purchase a photovoltaic system.

Still, that is not to say that solar power is not worth pursuing in this state.

Over the last decade, there has been a marked increase in the uptake of solar energy, partly due to the increase in electricity rates that are constantly on the rise for both commercial and residential homeowners alike.

Here are just a few electricity rates in neighboring states,¹ specifically for the year 2018 and for the last couple of years.

Neighboring States	Electricity Rates 2018	Electricity Rates 2022	Electricity Rates 2023
Arkansas	$9.34	$10.90	$12.21
Missouri	$10.71	$11.04	$11.65
Tennessee	$10.70	$11.49	$12.48
Mississippi	$11.22	$12.66	$14.01
Texas	$11.69	$12.82	$14.46
Oklahoma	$11.00	$11.21	$11.93
Louisiana	$9.11	$11.05	$11.85
Kansas	$13.32	$13.32	$13.97
Kentucky	$10.77	$11.98	$12.15
Illinois	$13.23	£14.73	$17.43

The commercial rates have climbed even higher, which could be an even greater impetus for businesses to venture into solar energy to boost their bottom line.

Neighboring States	Electricity Rates 2018	Electricity Rates 2022	Electricity Rates 2023
Arkansas	$7.05	$9.43	$10.48
Missouri	$8.45	$8.85	$9.85
Tennessee	$10.19	$11.36	$11.89
Mississippi	$10.40	$12.18	$13.11
Texas	$7.93	$8.56	$9.13
Oklahoma	$8.02	$8.80	$8.67
Louisiana	$8.19	$10.77	$11.06
Kansas	$10.61	$11.08	$11.46
Kentucky	$9.54	$11.34	$11.31
Illinois	$9.26	$10.90	$11.61

Electricity rates have a tendency to fluctuate with the market, going up and down by cents regularly but in the end, at the start of the following year, they are generally always going up, costing you more.

Whether you’re a residential or commercial energy user of the local grid company, you will want to know if solar panels will save you money, how much it’s going to cost you to install them, and whether it’s worth it.

The first thing to you’ll notice when doing your due diligence is that Arkansas has enough sunlight to get the job done and make solar worthwhile.

About 4.69 hours of peak sunshine is available every day of the year and with the correct configuration, a solar array can have a positive impact on the ever-rising utility bills that you would be happy to be paying less on.

But first, you’re probably asking: Why are solar panels so expensive?

Low Cost of Solar Panels in Arkansas (How Much Are Solar Panels in Arkansas?)

A photovoltaic system can be either very expensive or relatively cheap.²

If your home is a mobile camper van, then your costs could be no more than about $3,500.

If your house has 4 walls, 5 bedrooms, a roof, and is jam-packed with gadgets and children who forget to turn the lights off, you could easily be paying 10 times that figure at $35,000.

That’s a considerable amount of money and not many people have that lying around ready to be spent.

In Arkansas, prices range from $12,708-$17,192, with $14,970 being the average.

The reason for such a wide gap in the price range is down to the kWh that your property consumes, an amount that will dictate what size of panels are best suited to your circumstances, and how many you will need.

The sizes of residential solar panels are fairly standard at 5.4 ft. x 3.25 ft. or 5.10 ft. x 3.45 ft. and have different output ratings, and prices to match.

Below is a chart that displays what premises each is capable of powering up, as well as the possibility to generate all of your own electricity.

Output Rating	Cost	kWh per year	Uses
3kW	$8,970	2,500 kWh	2 Bed, 1 Bath
4kW	$11,960	3,400 kWh	Average family of 3-4 people
5kW	$14,950	4,500 kWh	4 bedroom house
6kW	$17,940	4,800-10,800 kWh	5-6 bedroom property
7kW	$20,930	8,400-12,000kWh	Large property with EV
8kW	$23,920	12,000 kWh	Possibility to go off-grid
10kW	$29,900	14,600kWh	Completely off-grid system

However, if you wanted to go completely off-grid a battery-supported system would need to be included to store any extra power absorbed throughout the day.

A typical home requires between 17 and 21 solar panels to be able to comfortably run all the appliances within, as well as reduce the reliance on the grid and the cost of your utility bills.

To go beyond that and generate over and above the average household’s yearly consumption of 10,000 kWh, you would have to install between 28-36 panels.

But you will also need the space to be able to do that.

There are a lot of variables that determine the amount of solar panels needed,³ not least of which is what you can afford.

To help with the cost of solar panels in Arkansas, the federal government has extended a helping hand.

Federal Solar Tax Credit (Solar Rebates From the Government)

Started in 2005, this innovative solar investment tax credit has helped millions to realize their dream of converting to solar energy either fully or partially by slashing 30% off their tax bill.

Now called the Residential Clean Energy Credit, it can save you a ton of money from a typical quote, lopping about $5,400 off the top, and reducing your costs to a more affordable $12,600 instead of $18,000.

It works by offsetting that amount from your taxes either in 1 year or in the following 5 if the taxes you have to pay in that year are less than the credit amount. So, even though the relief isn’t discounted directly from the quote, it is still a saving because that’s money you won’t have to pay to the IRS.

The Federal energy credits cover the costs of solar panels, racking mounts, inverters, batteries, and installation.

There are limitations to eligibility, however.

To be able to claim the tax credit, you have to owe taxes. That means that you have to be working and earning a wage for the year that the PV system is installed.

It is no good installing the system one year and starting a job a year later and trying to claim the tax relief.

That won’t work. If you’re wondering: How does the solar tax credit work if I don’t owe taxes, it simply means you won’t be able to get it.

Also, the property that is going to be the beneficiary of all this renewable energy has to be yours, your primary residence, and not rented.

The 30% was destined to be pushed down to 26% in 2022 but proved to be so popular in convincing Americans to change over to solar energy that it was extended to 2033 for both business and individual use.⁴

On that date 30% tax relief will be a thing of the past and 26% will be the best that you can get, if you’re still waiting around to make that solar leap forward into a clean energy future.

After that year is up, there will be a further reduction to 22% in 2034 and then it will cease to exist at the start of 2035.

If you want to apply before the expiry date, verify that you qualify, arrange to get your house solarized, and then complete form 5695 when you file your taxes.¹⁵

Commercial Solar Arkansas Solar Incentives

One sector that is benefitting from solar power probably the most in Arkansas, is the business sector.

If you are a business owner in one of the following areas then the addition of a PV system will quickly become noticeable when the energy bill not only drops through the door but drops in price.

• Gas station
• A fitness facility
• A convenience store
• A Restaurant
• An agricultural enterprise
• Manufacturing
• A laundrette

Just as residential premises are eligible for the 30% tax rebate, so, too, the Federal Investment Tax Credit (ITC), offers commercial enterprises the same discount structure, with the added advantage that in 2035 the program will not come to an end but simply reduced to 10%.

These discounts are particularly relevant to businesses as the level of solar investment is generally higher than for residential properties and can elicit even greater savings.

It has been estimated that a medium-sized business will need about 70 solar panels to make a dent in their utility expenses, at a cost of between $50,000 to $200,000.

By taking advantage of the 30% tax credit from the ITC, a saving of $15,000 to $60,000 can be realized.

For any business that is a considerable amount of money that can be re-invested into another part of the business to enable it to grow, while saving on the utility rates at the same time.⁵

Commercial Solar Panel Installation Cost and Solar Incentives (and Not-So-Free Solar Panels Arkansas)

Residential properties in Arkansas have a monthly usage of about 1,120 kWh compared to 900 kWh nationally. This equates to a bill every month of $104 on average and 13,440 kWh per year compared to the 10,800 kWh on a national level.

A medium-sized business in Arkansas will have a monthly usage of 5,547 kWh at a cost of $428, while an industrial-sized complex can have monthly costs of over $2,300.

Purely from a business point of view, if those overheads can be reduced by investing in solar there is the potential to save thousands a year, even if thousands have to be spent initially. Fortunately, there are even more incentives to be gained from the federal government and from local incentives in Arkansas.

Commercial Loan Programs for Solar Arkansas

From a business point of view the intention of using solar energy to reduce the amount of electricity has to be to save money, going green is also a consideration. To do so, purchasing a PV system in cash is an option, but a $200,000 hole in your company’s finances can take a while to refill.

With a well-structured commercial loan, substantial savings can be gained without a down payment.

Low-cost financing may well be a great option for your business as you can take advantage of the 30% Federal Tax Credit. By how much will depend on the length of the term of the contract but it can be significant.

With the right financing strategy, your company, can save money and improve your social image and at the same time become an eco-warrior by reducing the number of fossil fuels incinerated to keep your lights on.

Leasing for Solar Panels Arkansas

With a solar lease, your business will have the option of leasing the solar array and owning it at the end of the contract, with various terms of 5, 10, 15, 20, or 25 years.

The advantage of leasing is that there will be little or no up-front payment fees, lowering or deleting any initial capital outlay that may affect the stability of your company’s cash flow.

In many situations, you will start saving money immediately on your electricity bills as the repayment plan can be tailored to be lower than what you are accustomed to paying out on a monthly basis.

Power Purchasing Agreement for Solar Energy Arkansas

An alternative to paying for and owning the system is a solar power purchase agreement (PPA).⁶ With a PPA, you may install solar electricity at your site without having to pay any up-front costs or worry about system upkeep, cleaning, or maintenance costs.

This form of financing is referred to as a “third party” ownership model occasionally because the PV system will be owned by another entity, and you will pay a monthly fixed fee for its use.

You will benefit from cheaper, steady electricity costs as well as the sustainable, green energy produced by your solar power system throughout the term of your contract which is usually up to 20 years, but you will never own the system and will not be able to claim the ITC.

But be aware that not all solar installers are the same.

You can occasionally see adverts displaying offers where solar panels can be installed for free. When you enquire about how to get solar panels for free under their special promotion they will highlight the benefits.

It will all sound good when the sales staff describes how the leasing or PPA agreement will change your life.

The devil is in the details, and sometimes the small print can be somewhat misleading.

For starters, the company can claim the 30% Residential Clean Energy Credit without passing on the benefit to you. All they have to do is purchase the PV system for a different address and then install it at your residence.

And this is where the no-cost solar scam starts to work against you and in their favor.

Because they haven’t passed that saving on to you, which is often in the thousands, your monthly payments will be more expensive. The increase may not be more than $20 or $40, but over 10 or 20 years of the loan that will add up to a few thousand dollars that you will be out of pocket.

And on top of that not, your payback period for the array will also be extended, possibly by years.

Any reputable company could pass that saving onto you the customer as the profits for them under the PPA agreement are still going to be substantial. But the financial harm to an unsuspecting client can be painful, the damage hidden in the overall price and not felt for years to come when it’s too late to do anything about it.

Take the time to ask questions to avoid a situation where your dream of owning a PV system, turns out to be just the opposite.

Arkansas Solar Panel Cost (Solar Panels for Home in Arkansas)

During the months of summer in Arkansas, the temperature on those hot days spirals up to hover around the mid-80s and 90s, with a few days going over 100 F° in some parts of the state.

Also within the period, the hours of peak sun, when the sun is at its zenith for most of the day, also goes over 5 hours a day and shines brighter.

These are ideal reasons to go solar in Arkansas, especially as in the summer the price of electricity goes up by about 25% when air conditioning units start humming constantly as residents struggle to cool down.⁷

This is when being fully solar-powered would be perfect if you could afford it.

With the cost of solar panels in Arkansas still beyond the reach of some residents, there is still a way to get on the solar train without jumping all the way on board.

Why not simply convert to solar energy slowly?

The Recycling of Low Cost of Solar Panels in Arkansas and the Carbon Footprint Solar Panels

After 25-30 years of faithful service, many solar panels are at the end of their usefulness and are being replaced by newer, shinier modules.

The carbon emissions generated from the manufacturing process have long been offset decades earlier, and clean energy has been constantly produced since that date.

Due to the expensive process of extracting valuable metals and components from the modules, however, landfills up and down the country have been overflowing with tons of discarded solar panels and old batteries that many experts believe will eventually have serious environmental consequences due to metals leaking into surrounding ecosystems.

Recognizing a problem is the first step in finding a solution, and, in an effort to avoid a disaster, many states are stepping up to head off this impending catastrophe.

Arkansas solar incentives are being made available for companies and entrepreneurs to develop and expand their businesses to enable discarded modules to be recycled not only cost-effectively but profitably.

At one stage it was cheaper to throw away an end-of-life panel rather than attempt to save anything apart from the aluminum frame.

That has now changed, with technology and innovation improving dramatically over the last few years so that the silicon can now be separated economically from the cells, and precious metals like silver and copper that are integrated into the module can be safely removed.

New departments are being added within solar panel manufacturing companies as well as stand-alone businesses starting up over the state to fully recycle solar panels.¹³

All parts successfully harvested can be reused in new modules without loss of efficiency to either make a profit for the company or reduce the cost of solar panels in Arkansas to make them more affordable for the inhabitants of the state.

Solar Power in Arkansas

It may not have the full range of solar incentives as other states or the 7 hours of peak sun a day, but Arkansas is investing heavily in solar energy that is still gaining momentum.

Individual homeowners, businesses, non-profit organizations, community farms, and condos are searching for the best option for them to claim credits and whatever available assistance there is to convert to solar energy.

The volume of solar rooftop arrays is increasing across the state partly due to improved climate awareness and the low cost of solar panels in Arkansas.

And, by employing Arkansas solar incentives, you can reduce the cost of solar panels in Arkansas even more for your home solar installation plan.

Frequently Asked Questions About Arkansas Solar Incentives