Solar Incentives in Arkansas

Arkansas does not provide a state-level property tax exemption for residential solar PV. County assessors typically include the market-value contribution of a solar system when reassessing residential property at the next assessment cycle. Practice varies — rural counties often informally exclude solar value, while suburban Pulaski (Little Rock), Benton (Bentonville), and Washington counties tend to include it. The combination of net billing reform (sub-retail export compensation), no property tax exemption, no state PIT credit, and the federal Section 25D ITC having expired 2026-01-01 makes Arkansas residential solar economics challenging despite reasonable solar resource (4.5–5.0 peak sun hours).

Arkansas's 6.5% state sales tax applies to residential solar PV equipment, with no consumer-facing exemption. County and city local-option sales taxes typically add 2-5 percentage points, bringing the combined rate to 9-11.5% in most populated jurisdictions. Arkansas Department of Finance and Administration administers the regime. Limited utility-scale renewable equipment exemptions exist but do not extend to residential rooftop installs. The combined sales tax burden on a typical $25,000 residential PV install is approximately $2,500 — a meaningful adverse factor in the post-ITC economic environment.