Arkansas solar 101: must read before you buy solar panels

The Solar Investment Tax Credit (ITC) allows homeowners to claim 26% of the cost of their solar power system installed until 2022 as an income tax deduction. For example, if your solar system costs $20,000, you are eligible for $5,200 (26% of the total gross cost) in tax credit. Solar system cost comprises not only the money spent on solar panels, but also freight shipping costs, professional installer fees, tools bought or rented and so on. To claim the ITC, complete all the necessary forms and submit them when filing your taxes.

Solar laws in Arkansas allow customers of investor-owned utilities and electric cooperatives to join Net Metering programs. This gives residential solar owners an opportunity to put the excess electricity into the utility grid instead of storing it with batteries.

When you sell your solar power back, you receive credits that can be used to offset your next bills. In Arkansas their value is equal to full retail electricity price. If you have unused credits at the end of the calendar year, you may choose to roll them over indefinitely or receive a payment after two years of accumulation. The payment amount will be calculated according to avoided cost rates determined by utilities. You may also request a payout upon leaving the Net Metering program, transfering your system to another person or leaving the utility company.

A solar easement contract is a written agreement between you and another party, for example, your neighbor. This type of contract helps to ensure that your PV system will always have adequate sun exposure, protecting you from potential obstacles. It is voluntary, but can not be cancelled unless a specific clause is included in the document. Once signed, it is tied to the land, not the owner. Any such agreement must be created in written form and must meet the general requirements for legal contracts.

It is legal to install solar panels on your house in Arkansas. However, the state doesn’t implement any specific laws to protect its residents from restrictions imposed by homeowners associations (HOAs). Thus, you may be required to submit your project for approval before changing the exterior of your house. The board may ask you to hide the system from view, reduce the number of panels or just reject your proposal. Contact your HOA or study its declaration and rules to find more information.

According to the data from FEMA, Arkansas is one of the ten states most at risk of flooding. The floods are often accompanied by severe rainstorms and powerful wind. Solar panels can easily withstand that and more, up to a full-blown hurricane. This reliability is very welcome during a blackout. In 2019, heavy rains and unceasing winds left more than 19,200 customers without electric power. It is a good reason to use a PV system, especially considering that extreme weather events are becoming more frequent and powerful.