Net Billing in Arkansas: Why System Size Matters More Than It Used To

If you talked to a solar company in Arkansas a few years ago, you may have heard that every kilowatt-hour your panels produced was worth the same as one you bought from the utility. For new systems, that is no longer true. Arkansas has moved from traditional net metering to net billing, and the change affects both how big your system should be and how much it will save.

This is not a reason to avoid solar. It is a reason to understand the new math before you sign anything.

What Changed

Act 278 of 2023 changed how new solar customers are credited. Customers who applied to interconnect before September 30, 2024 kept the old one-for-one retail credit as legacy customers until June 1, 2040. Under the Arkansas Public Service Commission's net metering rules, that status belongs to the system on the property rather than to the owner, so if the home is sold the agreements can transfer to the buyer and the legacy credit continues. Moving the system to a new address ends it. Systems that applied after September 30, 2024 fall under the new rules.

Under the new rules, the meter tracks two things separately: the power you pull from the grid and the power your system sends to it.

• Power your home uses the moment it is produced saves the full retail rate, because it is power you never buy.
• Power your system sends to the grid is credited at the utility's avoided cost rate. This applies any time the panels are making more than the house is using, even for a few minutes at midday.
• Power you pull from the grid, such as in the evening after the sun goes down, is billed at the full retail rate.

The two are not netted against each other. Sending 10 kWh to the grid at noon and buying 10 kWh back at 7 p.m. does not cancel out.

Export credits are applied to your bill as a dollar amount and roll forward if you have more than you need. They cannot be used against the customer charge or other fixed charges.

How Big the Gap Is

Avoided cost is roughly what it would cost the utility to generate or buy that power elsewhere. For March 2026 through February 2027, the filed rates are about 3.3 cents per kWh for Entergy Arkansas, about 3.7 cents for SWEPCO, and about 3.7 cents for the electric cooperatives. The average Arkansas residential retail rate was about 13.4 cents in the first half of 2026, according to the U.S. Energy Information Administration. So power you export is worth roughly a quarter of power you use yourself.

A Simple Example

Take an 8 kW home system that produces about 11,600 kWh a year. What it saves depends on how much of that power the house uses as it is produced. Using round numbers at 13 cents retail and 3.3 cents for exports:

• If the home uses 75% of the solar as it is produced, which is typical when someone is home during the day, the first year is worth about $1,230.
• If it uses 60%, a common middle case, the first year is worth about $1,060.
• If it uses 45%, typical when the house sits empty on weekdays, the first year is worth about $890.
• Under the old one-for-one rules, the same system would have been worth about $1,500.

Same panels, same roof, same sunshine, and a very different result. That is why the old rule of thumb of sizing a system to cover 100% of your annual bill no longer holds up for new customers.

What This Means for Your System

• Size to your daytime use, not your roof. Every panel beyond what the house uses during sunny hours mostly produces exports at avoided cost.
• Look at when you use power, not just how much. Homes with heavy daytime loads, such as air conditioning on summer afternoons, someone home during the day, or a pool pump, use more of their solar directly.
• Shift what you can to daylight hours. Running the dishwasher, laundry, pool pump, or electric vehicle charger at midday turns low-value exports into full-value savings.
• Expect a smaller system than older proposals suggested. A right-sized system often covers well under 100% of annual use.

Watch for Proposals Built on the Old Rules

Some proposals still calculate savings as if every kilowatt-hour is worth the retail rate, or as if production and usage net out over the month. For a new Arkansas customer, that math overstates the savings. When you review a quote, ask:

1. How much of the system's production do you expect my home to use directly, and how did you estimate that?
2. How many kWh will it export in a typical year, and at what rate did you value them?
3. Did you use my actual bills, and do the savings assume net billing or the old net metering rules?

An honest installer will have clear answers. If the proposal shows a single savings number with no breakdown, ask for one. Our guide on comparing solar proposals covers the other assumptions worth checking.

Does Battery Storage Help?

More than it used to. A battery lets you store midday solar and use it in the evening instead of exporting it for about 3.3 cents and buying power back later for about 13. A battery loses about 10% of what it stores, so every kWh shifted that way is worth roughly 8 cents more. Whether that pays for the battery depends on its cost and how much you cycle it, and for many homes the math works best when backup power during outages is also a priority. Our savings calculator can add a home battery to your estimate so you can see the difference.

Businesses Face the Same Math

Commercial and agricultural systems are credited the same way, with larger size limits: up to 5,000 kW for nonresidential customers, compared with 25 kW for homes, and never more than the site's highest monthly usage. A business or farm with strong daytime load, such as a shop, office, cold storage, or poultry ventilation, can use most of its production on site, which is where solar economics are strongest. Sites that run mostly at night need more careful design.

Utility tariffs and avoided cost rates are updated each year. The figures here reflect filings effective March 2026 through February 2027. Municipal utilities such as Conway Corporation, North Little Rock Electric, and Jonesboro City Water and Light set their own rules. See Entergy Arkansas's net metering page for one utility's summary.

Not sure how much of your solar you would actually use? Send us a year of bills and tell us a little about your daily routine. We will show you what the numbers look like under the rules that apply to you.