Does Home Solar Still Make Sense in Arkansas Without the 30% Tax Credit?

For years, the 30% federal tax credit was the first number in almost every residential solar conversation. It expired at the end of 2025, and systems finished after December 31, 2025 do not qualify (IRS FAQ). Homeowners who install solar now pay the full cost, and a lot of people have asked us whether that means solar no longer makes sense.

The short answer is that for some homes it still does, for others it no longer does, and the difference is easier to spot than you might think.

What the Numbers Look Like Now

Here is a rough example for a typical Arkansas home. It is not a quote, but it shows the shape of the math.

• An 8 kW home system at about $2,600 per kW costs roughly $20,800.
• In Arkansas, that system produces about 11,600 kWh a year.
• Under Arkansas net billing, solar your home uses as it is produced saves the retail rate of about 13 cents per kWh. Solar you send to the grid earns only about 3.3 cents. How much you save depends on how much you use directly.
• If the home uses about 60% of its solar directly, a common middle case, first-year savings come to about $1,060. If rates rise about 4% a year, payback takes roughly 15 years.
• With heavy daytime use (about 75% used directly), savings rise to about $1,230 and payback drops to roughly 13 years.
• If the house sits empty most weekdays (about 45%), savings fall to about $890 and payback stretches to roughly 17 years.

With the old 30% credit, the same system would have paid back in roughly 10 to 13 years under those same assumptions. So losing the credit adds three to four years, and net billing means how and when you use power matters as much as the size of your bill. For many homes the numbers are tighter than they were a few years ago. That is worth knowing before anyone quotes you a price.

Where Home Solar Still Works

• Higher electric bills. Homes spending $200 or more a month, especially with heavy summer cooling loads.
• A good roof. South, east, or west-facing space with little shade and at least 15 years of life left, or a roof you are replacing anyway.
• Plans to stay. If you expect to be in the house for ten years or more, you keep most of the savings yourself.
• High daytime use and a right-sized design. Arkansas now credits exported power at a much lower rate, so the best systems are sized to what the house uses while the sun is up. We explain why in Net Billing in Arkansas.
• Cash or low-cost financing. High interest can eat most of the savings.

Where It Is Harder to Justify

• Low usage or small monthly bills
• Heavy shade from mature trees you want to keep
• A roof that will need replacing within a few years, unless you replace it first
• A likely move within five years
• Financing where the monthly payment runs higher than the savings for many years

A Word on Leases and Power Purchase Agreements

With the homeowner credit gone, some national companies are steering customers toward leases and power purchase agreements, where the company owns the panels and can still claim a business tax credit, at least through 2027. These can work, but read the terms closely. Look at the annual price escalator, the length of the contract, what happens if you sell the house, and who pays for repairs. Our post on buying a house with solar explains why these contracts sometimes complicate a sale.

Questions to Ask Before You Decide

1. What is my payback with no tax credit, using my actual bills?
2. How much of the system's output will my home use directly, and how much will it export?
3. What happens to the numbers if utility rates stay flat?
4. How many years does my roof have left?
5. Who services the system if something goes wrong in year eight?

The credit made solar easier to sell. It did not change what makes a project work: good sun, steady usage, a sound roof, and a system sized to the house. If your home checks those boxes, solar can still be a solid long-term decision.

Curious where your home lands? Our solar calculator lets you pick your daytime routine and see the difference, or send us twelve months of bills and we will tell you straight whether solar is worth it for your house.