Solar Panels in Arkansas: A Detailed Financial Analysis and Buying Guide

Are you an Arkansas homeowner interested in adding solar panels to reduce your electricity bills long-term?

With the state ranking among the highest for residential power consumption yet offering minimal incentives to adopt renewables, determining true out-of-pocket costs, system sizing, and potential return on investment warrants detailed analysis.

This comprehensive 2,200+ word guide serves as an essential starting place for Arkansas residents exploring solar. It outlines available pricing data, calculates size and savings potentials based on your needs, summarizes current incentive programs, and provides actionable next steps to vet viability on your own property.

Why Consider Going Solar in Arkansas?

While historically lagging behind leading solar states in terms of installing capacity, Arkansas has seen accelerating adoption growth recently thanks to widening cost-competitiveness with traditional utility rates.

As of 2021, over 8,100 homes and businesses have added solar arrays – more than double the total from just 5 years prior according to the Solar Energy Industries Association. And the market is only expanding more each year.

What’s driving interest?

For starters, Arkansas has:

• Among the top 15 highest average monthly electricity consumption figures nationally from EIA data
• Plentiful solar resources ranking 20th in the country for watt-hours produced annually per square meter
• Below average retail electricity rates (10.21 ¢/kWh) providing ample long-term savings potential
• Over 4 peak sun hours daily offering strong capacity factors for solar production
• Access to market-leading panel equipment packages and certified regional installers through robust national chains

While lacking state level incentives, the above conditions present a ripe opportunity for homeowners to secure affordable clean energy and insulation from rising utility expenses.

This guide serves to dispel uncertainty for Arkansas residents around exact costs, system sizing calculations, real-world savings potential, available incentive programs and final recommendations on pursuing solar.

How Much Do Solar Panels Cost on Average in Arkansas?

According to the most recent installation data aggregated by the National Renewable Energy Laboratory, the average quoted price per watt of solar panels in Arkansas ranges from $2.50 to $3.00 depending on exact system size and geographic region.

This price encompasses all hardware components, permitting fees, grid connection approvals, labor and installer margin required to deliver a turnkey functioning system.

For context, these Arkansas solar costs compare very favorably to the $2.95 per watt national average despite lacking state level purchase incentives.

You can use the Arkansas price per watt metrics to approximate how much a solar array may run for your property. However actual costs can fluctuate based on your specific build requirements.

Arkansas Solar Panel Cost Assumptions

• 6 kW System Size
• 18-24 Panels (360Watts Each)
• 1 or 2 String Inverter(s)
• Racking, Wiring, Conduit Hardware
• Installation Labor
• Permitting & Grid Fees

Applying the $2.63 per watt midpoint rate to our 6 kW system example equates to an out-of-pocket installed pre-incentive price of $15,780 for Arkansas homeowners on average.

However, this is just a baseline estimate. Exact solar panel system pricing is extremely dependent on your household energy needs, property specifics, and financing options utilized. Let‘s break down these variables in detail next.

How System Sizing and Site Considerations Impact Pricing

While the above statewide average pricing offers an initial budgetary baseline, your property‘s specific solar generation requirements play a substantial role in determining what size system to install and your true overall cost.

Tailoring capacity to match your household‘s energy needs ensures you‘ll offset the maximum amount of grid power each year while avoiding over or under building. Get ready to crunch some quick numbers!

Step 1: Calculate Your Annual kWh Electricity Usage

First, tally 12 consecutive months of electric bills to find your average monthly consumption. For most Arkansas homes, this figure lands between 900 – 1,200 kWh per month.

Once you have your monthly average usage, multiply it by 12 to get annual consumption. This sets the baseline for how much solar generation you‘ll require.

Example: 1,100 kWh monthly average x 12 months = 13,200 kWh yearly

Step 2: Determine Your Regional Peak Sunlight Hours

Next, you‘ll want to identify your county‘s peak sunlight hours (PSH) – the estimated amount of direct sun exposure solar panels receive on average including variables like seasonal weather and latitude.

This PSH number allows calculating potential system output. For Arkansas, peak hours range from 4.2 in the far north to 5.1 in the south.

See this Arkansas peak sunlight hour map for specifics on your county.

Step 3: Calculate Minimum Solar Array Size

Okay, with your annual household kWh usage and location‘s peak sunlight hours, determining an appropriate system capacity is straightforward.

Simply divide the annual usage by PSH to get your minimum solar array wattage.

Assuming the earlier 1,100 kWh monthly average home needing 13,200 kWh annually, at 4.5 peak hours they would require at least a 2,933 watt system (13,200 / 4.5).

To allow for future energy increases and some buffer, right-sizing closer to 3,500 watts (20% over) is recommended.

Based on $2.63 per watt with a 30% federal tax credit, this example system would cost about $6,300 out of pocket after incentives.

Step 4: Evaluate Site Specifics

Beyond getting your base solar power requirements set, assessing your home‘s specific roof size, age, orientation and shading will further dictate what size array can be accommodated.

If you have limited southern exposure area or obstruction conflicts, more efficient panel models can help condense system output into less square footage.

Getting an on-site evaluation is the best way to gauge fit. Many installers provide free site visits and shading assessments to measure.

You might also consider aging roof replacement costs into your solar budget if nearing 20+ years old. Doing so at the same time often proves more affordable.

What Incentives & Rebates Help Reduce System Pricing?

With a handle now on how average solar costs in Arkansas translate to your situation and property goals after running through sizing calculations, what potential incentives are available to further reduce your budget?

Unfortunately Arkansas lags the vast majority of states currently in terms of offering property tax exemptions, income tax credits, sales tax waivers or direct rebate programs on solar purchases.

Your best savings avenue lies with the 26% federal solar tax credit offered through 2032.

The tax credit effectively reduces your gross system cost by 26%. So if you purchased a $15,000 array for example, you could deduct $3,900 directly from your IRS tax bill or refund.

If unable to utilize the full rebate the initial year because of low tax liability, you could spread any remainder over future filings up to claim your entire savings.

The federal solar credit requires arrays are greater than 0.5 kW and installed at a primary or secondary residence domestically. All common panel setups and installation methods qualify if meeting these criteria.

When combined with accelerated tax depreciation benefits also offered for households going solar, the federal credit provides a major financial yield despite Arkansas lacking local supports.

Be sure to discuss requirements and process to capture these savings with prospective installers or your tax professional before moving forward with plans.

Additional Arkansas Solar Incentives

Aside from the federal credit, you may find small supplementary incentives through:

• Some municipal utilities and electric co-ops
• Limited time discounted panel offers from local installers
• Special low interest solar loans and payment plans if income qualifying

But any state level policy expansions remain unlikely in the near term unfortunately.

How Quickly Can You Recoup Solar Equipment Investments in Arkansas?

Now for the magic question – how many years will it take to payback your original solar panel system costs through accumulating utility savings?

The short answer: 12-16 years for most Arkansas properties after accounting for the federal tax credit.

While longer than leading solar states, a 15 year payoff on physical hardware isn‘t bad considering 25+ year operational lifespans.

To demonstrate, let‘s revisit our earlier 6 kW, $15,780 system example for an average 1,100 kWh per month home.

Factoring incentives, out-of-pocket cost drops to $12,396 after the 30% tax credit.

Over 12 months, the system would generate about 6,600 kWh offsetting $660/year in utility costs (at $0.10 per kWh retail electricity rate).

$12,396 system cost / $660 in annual bill savings = Break Even in ~19 years

But again, the above calculation doesn’t yet factor all variables like rising utility rates, panel production degradation or financing costs/terms if not buying outright.

When accounting for these dynamics in net present value models, the true breakeven point for a Arkansas solar array investment lands closer to 12-15 years for most homes.

While on the higher end nationally, achieving payback in a decade and a half remains quite feasible. And it leaves 10+ years of pure savings over your system‘s usable lifespan.

Use our Arkansas solar return on investment calculator for a custom estimate on your particular utility company and system specifications.

How Much Money Could You Save Over Solar Panel System Lifetime?

Figuring one-time installation cost recoup period offers just a partial glimpse into Arkansas solar energy’s money saving potential from reducing your ongoing grid dependence.

The full financial value becomes apparent when looking at 20 to 30-year utility savings accrued after you’ve paid off your hardware investment. This is where households reap the most return.

For our example 6 kW system:

• Gross Pre-Incentive Price: $15,780
• Net Cost After Federal Credit: $12,396
• Annual Bill Savings: $660
• Payback Period: ~15 Years

Savings After Payback Over Remainder of 25 Year Warranty Period = $9,900

Accounting for the entire generational lifecycle and an average annual utility escalation rate of 1.5%, you could expect over $23,500 in total electric bill savings.

Compare this to conventionalutility costs which would have added up to ~$33,400 over the same 25 years without any solar generation.

That’s nearly $10,000 positive net cash flow after paying off your equipment.

Extend the savings calculations out further over 30+ years and the overall benefit grows substantially larger. While producing clean renewable power all the while!

Exact utility savings potential does depend on the specific annual system production estimate in kWh for your location and installation specifics.

Use our Arkansas solar calculator tool for a detailed long term cost/benefit projection.

Expert Recommendations on Going Solar in Arkansas

“While historically trailing other states in overall solar adoption, Arkansas presents a unique opportunity today for homeowners to deploy panels cost-effectively amid high energy bills yet languishing policy incentives.” – Max Miller, Founder Arkansolar Inc.

We corroborated analysis and recommendations within this guide with two solar executives operating regional installation companies in Arkansas since 2008 and 2011 respectively. Both underscore:

• Favorable equipment pricing dynamics and ample sunshine enable payback in 10-15 years without state rebates
• Federal tax credits + low interest solar loans can outright slash 50% off gross costs for many
• Utility savings north of $15,000 lifetime even at current grid rates are feasible
• Using local crews for permitting, installations and maintenance is key

In their words, sunlight conditions allowing for 4.5+ peak hour solar production paired with below average energy rates now compete cost-wise with traditional retail power pricing even absent state incentives. Enabling double digit return timeframes.

This dynamic along with better consumer awareness is driving record deployment volumes for Arkansas despite policy shortcomings.

Key Takeaways on Solar Panels in Arkansas

1) Equipment & Installation Pricing is Very Competitive

At $2.50 to $3.00 per watt all-in, Arkansas solar system costs sit well below national averages allowing affordable electrification.

2) Payback of Initial Investment in 10-15 Years is Achievable

Even lacking state rebates, favorable Federal credits and utility savings add up to pay for equipment costs for most properties in 10-15 years.

3) 20+ Years of Pure Savings After Payback

Lifetime utility savings between $15,000 to $25,000+ are feasible yielding substantial consumer ROI.

4) Right-Sizing System Capacity is Crucial

Custom tailoring arrays to annual energy usage and site specifics maximizes offset potential and total dollar returns.

5) Elevated Electric Usage Makes Solar Enticing
With Arkansas homes ranking among peak energy consumers nationally, large savings abound from high grid dependence despite reasonably priced retail electricity currently.

Solar in Arkansas – Frequently Asked Questions

If exploring your own solar opportunity and still evaluating merits, pros/cons or unknowns on costs – reviewing some common questions can help dispel myths.

How often do solar panels need replacing in Arkansas?

Modern solar equipment holds 25+ year lifespans. Many manufacturers warranty 80% efficiency up to 25 years. Only an inverter replacement around year 15 may be warranted.

Does weather impact solar production in AR?

Arkansas sees 5% lower winter solar yields but otherwise consistent production. EnergySage data shows strong annual performance without extreme variance.

Can solar panels withstand hail or storms?

Monocrystalline premium panels resist localized damage better. Further, 1% panel efficiency degradation minimally impacts total output.

How long do batteries increase payback?

Battery storage does 1.5x to 2x system costs. Simple payback rises to 18+ years. Best to oversize solar array, then add storage later if desired.

Can I claim solar tax incentives in future years?

If exceeding current years IRS tax liability with credits, you can roll over any excess credit annually to maximize benefit.

Does panel cleaning maintenance add costs?

Periodic cleanings every 3-5 years are recommended. But this presents minor expense compared to energy savings.

Call To Action: Next Steps for Gauging Your Arkansas Solar Potential

If reviewing the objectives costs, incentivizes and projected savings detailed throughout this guide has you now seriously weighing a solar transition – fantastic!

As a next step, I recommend reaching out to a few top-rated regional solar installers operating in Arkansas for quotes specifically catered to your property:

EnergySage – Instantly compare 5+ installer bids online

Arkansolar – Veteran Little Rock Area Installer Since 2009

Natural State Solar – Bentonville & NW Arkansas Specialist

Quality installation teams will provide solar production models catered to your specific utility usage, a detailed scope matching your home’s physical footprint, and financing options tailored to your budget.

They‘ll also help navigate claiming the federal tax credit alongside finalizing permits with your city and electric company.

I hope this guide offered an informative starting point for assessing if and how transitioning to solar could work financially in your specific situation as an Arkansas homeowner. Please don’t hesitate to reach out with any other questions!