25-year savings projection for Arkansas
This projection starts from Arkansas's assumed $0.13/kWh electricity rate and 1,360 kWh/kW of annual production, then grows savings by 3% a year as electricity prices rise and reduces output by 0.5% a year as panels degrade.
| Year | Annual savings | Cumulative savings | vs. $22,200 cost |
|---|---|---|---|
| Year 1 | $1,165 | $1,165 | −$21,035 |
| Year 5 | $1,286 | $6,124 | −$16,076 |
| Year 10 | $1,454 | $13,048 | −$9,152 |
| Year 15 | $1,643 | $20,876 | −$1,324 |
| Year 20 | $1,858 | $29,727 | +$7,527 |
| Year 25 | $2,101 | $39,732 | +$17,532 |
A simple, undiscounted projection — it does not apply a discount rate, financing interest, inverter replacement (commonly needed once in 25 years), maintenance, or any change in home value. Treat it as a shape, not a forecast. See methodology.
Why savings look like this in Arkansas
Decent sunshine and low installed costs help, but modest electricity rates and changing export rules lengthen payback.
The single biggest variable is what your utility pays for exported power. Arkansas moved from 1:1 net metering to net billing for new customers under Act 278 of 2023, with exports credited near avoided cost. Systems grandfathered under older rules keep better terms.
What would change this number
- Your actual rate. This uses a $0.13/kWh Arkansas average. If you pay more, savings scale up roughly proportionally.
- Self-consumption. We assume 68% of output is used on site at retail value and the rest exported at 45% of retail. Households home during the day, or with a battery, do better.
- Electricity price growth. At 3% a year, savings nearly double by year 25. Slower growth meaningfully reduces lifetime return.
- Incentives. Arkansas offers no significant state incentive, so the installed cost above is close to what you would actually pay. See Arkansas incentives →
- Financing. A cash purchase earns the return above. A loan shifts it — interest can consume a large share of lifetime savings.
Frequently asked questions
How much can you save with solar panels in Arkansas?
An 8 kW system in Arkansas could save roughly $1,165 in the first year — about $97 a month — and around $39,732 across 25 years, assuming electricity prices rise 3% a year and panel output declines 0.5% a year. Against a midpoint installed cost of $22,200, that is a net gain of about $17,532.
What is the ROI on solar panels in Arkansas?
On these assumptions, roughly 79% over a 25-year system life — $17,532 of net savings on a $22,200 system. That is a simple, undiscounted return: it ignores financing interest, the time value of money, and any effect on home resale value. A cash purchase and a loan produce very different numbers.
How long does it take for solar to pay for itself in Arkansas?
Around year 16, when cumulative savings first exceed the $22,200 installed cost. A simple payback that ignores rising electricity prices gives a wider range of 16–22 years.
Do solar savings in Arkansas include the federal tax credit?
No. The 30% federal residential clean energy credit (Section 25D) ended for systems installed after December 31, 2025, so none of these figures include it. Any savings projection you see elsewhere that still applies 30% to a 2026 purchase is overstating the return.
What most affects solar savings in Arkansas?
Three things, in order: your utility's export compensation (Arkansas moved from 1:1 net metering to net billing for new customers under Act 278 of 2023, with exports credited near avoided cost.), how much of the output your household consumes on site rather than exporting, and your actual electricity rate versus the 0.13/kWh state assumption used here.
Where these numbers come from
State assumptions are informed by public data and reviewed periodically (September 2026):