Hey there! If you‘re an Arkansas homeowner considering installing solar panels, you‘ve come to the right place. My name‘s Alex, and I‘m a renewable energy analyst here to provide an in-depth look at everything you need to know about the costs, savings, and incentives for solar energy in the Natural State. I‘ll be speaking to you directly throughout this guide, walking through the key factors that determine whether solar is a wise investment for your home. Let‘s dive in!
Across the United States, solar energy is absolutely exploding. The U.S. solar market has grown at an average annual rate of 49% over the last decade, with over 4 million installations now online. Falling panel prices combined with policy incentives have made solar a great investment in many states. But how does Arkansas stack up?
Here in Arkansas, we‘ve been a bit slower on the uptake – only about 0.2% of our electricity comes from the sun. But solar is gaining momentum! We currently have around 88 megawatts of solar capacity installed, mostly from large utility-scale projects. Residential adoption is rising too, with around 1,500 Arkansas homes now powered by the sun. And projections show our solar growth rate doubling over the next 5 years as prices fall further.
So solar is coming to the Natural State in a big way. Let‘s look at what it would mean for you.
How Much Do Solar Panels Cost in Arkansas?
When considering going solar, the first question is always – how much are we talking here?
The average cost for solar panels in Arkansas is $2.63 per watt according to 2022 installation data. For a typical 6 kW system for a home, that comes out to around $15,780 in total.
Here‘s a breakdown of what‘s included in that price:
- $7,890 for solar panels
- $1,500 for inverters
- $2,600 for racking, wiring, and other equipment
- $3,790 for installation labor, permits, etc.
And the total cost can vary based on:
|System Size||Total Price|
You‘ll also have a choice between monocrystalline and polycrystalline panels. Monocrystalline cost a bit more upfront but are more efficient and productive.
Compared to the national average of around $2.95/Watt, Arkansas‘s costs are roughly 11% below average. Solar panel pricing has dropped 15% over the last 5 years too, so costs are trending down.
How Is Your Solar System Sized?
Your home‘s solar array needs to be sized correctly to match your electricity usage and sunlight availability. Here‘s how to calculate the optimal system size:
Let‘s look at two example homes:
House 1 has an average monthly usage of 850 kWh. Divide by 30 days = 28.3 kWh/day. They are in Northwest Arkansas with 4.2 sun hours/day. 28.3 kWh / 4.2 hours = 6.7 kW system needed.
House 2 uses more electricity at 1300 kWh/month. That‘s 43.3 kWh/day. In Central Arkansas they get 4.8 sun hours. 43.3 kWh / 4.8 hours = 9 kW system.
Oversizing your system a bit is recommended to account for future energy needs if you add an electric vehicle, accessories, etc. I‘d suggest a minimum of 6 kW capacity for most homes.
When Does Solar Start Saving You Money?
Let‘s look at the two example homes again:
For House 1, the 6.7 kW system at $2.63/Watt costs around $17,600. But taking the 26% federal tax credit saves them $4,570. Their monthly bill is around $140, and solar will provide $70 in savings by generating that power instead.
With those factors, the payback period is about 9 years.
House 2 pays $23,700 for their larger 9 kW system. The tax credit saves $6,160. Their $200 monthly bill will drop by $105 from solar energy.
Their payback period is also around 9 years.
Over the 25 year lifespan, House 1 will save $19,000 in electricity costs after payback. House 2 will save nearly $30,000.
And if utility rates rise significantly, the savings could be even greater!
Solar Incentives and Rebates in Arkansas
Unfortunately, Arkansas does not offer many state-level solar incentives like our neighbors do. Here‘s what is available:
- Federal Tax Credit – 26% of system cost back on 2023 taxes, steps down to 22% in 2024
- Net Metering – Get 1:1 bill credit for excess solar generation sent to grid
- Utility Rebates – A few co-ops offer modest rebates of around $300-$500
The lack of strong state support has hindered solar growth so far. But the economics are starting to make sense even without incentives, so we expect to see installations rise in the coming years.
Opportunities and Challenges for Solar Expansion in Arkansas
With the right policies and conditions, solar energy could really flourish here in Arkansas:
If a Renewable Portfolio Standard passed requiring utilities to get 20% of energy from solar and wind, we could see solar capacity expand more than 10x.
As electric vehicles catch on, higher electricity demand will make solar more cost-effective.
Community solar programs would allow even renters and apartment dwellers to utilize solar energy.
Continued declines in solar panel pricing will shorten the payback period.
However, some factors still pose challenges:
Arkansas has very low electricity rates – only about 10 cents per kWh. Higher rates would improve solar savings.
Lack of strong state incentives to lower costs further compared to our neighboring states.
But the future is bright for solar energy in the Natural State! Interest is rising among homeowners who want to save money and help the environment.
Key Takeaways on Residential Solar in Arkansas
If you‘re considering installing solar panels on your Arkansas home, here are the key facts:
Current costs are very affordable at $2.63 per Watt, about 11% below the U.S. average.
Make sure to size your system correctly based on your home‘s specific electricity usage. Most homes need 6-8 kW.
The 26% federal tax credit saves you thousands. But few other incentives are available.
At 9-11 years, payback is slower than some states. But 25 years of subsequent savings make solar a wise long-term investment.
I hope this overview has provided you with a solid understanding of the economics and opportunities of going solar in Arkansas. If you have any other questions, feel free to reach out! I‘m always happy to help folks evaluate whether solar is the right choice for their home.