Renewable Energy Incentives for the state of Arkansas | The Renewable Energy Hub USA

Renewable Energy Technology Incentives in Arkansas


Arkansas has valuable land resources that could make it a centre for biomass production in the future but has been slow on the uptake with other renewable energy sources such as solar and wind. The fact that some large wind manufacturing businesses have set up in the state in recent times could well signal a sea change that brings more engagement and more jobs.

Without a clear renewable energy strategy in the past, Arkansas lags well below mid table in the incentive stakes but may begin to catch up quickly in the near future. Only producing some 9,000 MW through wind power and with just 50 solar arrays around the state, there’s certainly work to be done. Arkansas has a high level of sunshine that would benefit a stronger solar infrastructure but much of the work so far has concentrated on energy savings rather than installing renewables.

Part of the problem could be that over half of Arkansas’ land is covered by commercially owned forests and there are issues such as wildlife preservation to be addressed. This may also be why the concentration in future could be on biomass energy production – estimates suggest that the state could provide electricity for more than 2 million homes if this area is properly realized.

Solar PV Incentives in Arkansas

Arkansas is well placed for solar and there is the incentive of the Federal Tax Rebate that can reduce the amount paid by 30%. Residential and non-residential installations were eligible for the state rebate that was introduced in 2010 but this was a limited. The commercial sector can also benefit from nationwide tax rebates such as the Renewable Electricity Production Tax Credit which also applies to wind, biomass and hydroelectric and other technologies. The AEP SWEPCO rebate for businesses and public bodies such as schools also provides good incentives with solar getting $450 per kW installed.

Solar PV Case Study in Arkansas

Even without major state incentives for solar PV, installations benefit from a 30% rebate from Federal Tax. Arkansas does have net metering though this is not paid out but offset against future electricity bills. The options for buying solar PV involve either paying outright using savings or taking out a loan. A 5 kW installations would cost around $21,250 and with the tax rebate that brings the price down to $14,875. Add in the savings on utility bills and most installers can expect to see a return after 18 years, longer than most other states. Overall profit after 25 years could be as much as $10,000.

Solar Thermal Incentives in Arkansas

As with solar PV, most of the incentives if any are from state wide initiatives and the ones produced by Arkansas are largely aimed at commercial and public bodies. Installations benefit from the Federal Tax Credit and small businesses can take advantage of offers such as the Small Business Revolving Loan Fund for energy efficiency development.

Small Hydro Incentives in Arkansas

Micro hydro is not widely utilized in Arkansas but should be a viable option for renewable energy production for remote areas. More suited to off-grid, there are currently few incentives though with fast running water the ROI can come through in under ten years for systems under 100 kW.

Geothermal Incentives in Arkansas

The use of heat pumps is gaining popularity and benefits also from the government 30% Federal Tax Rebate. Suited more to homes that have a high levels of insulation, geothermal is a growth industry in the state. Companies like First Electric do include heat pumps in their residential loan program up to $15,000 at a low interest rate.

Biomass Incentives in Arkansas

Biomass is gathering ground in Arkansas and could be its main contribution to clean energy production in the future. Much of this may well come from large plants that could deliver a staggering 19.8 billion kWh per year for the state if realized. Again, much of the incentive is aimed at the commercial and public sector with initiatives such as the Arkansas Energy Technology Loan Program.

Wind Power Incentives in Arkansas

Wind power is on the up in the state of Arkansas with a number of major companies setting up business there and providing some 3,000 new jobs in the region. It may be strange to some that the state in fact had no power produced by wind turbines as of 2014 though a few new projects were beginning to gain ground by the end of 2015. While installations benefit from the Federal Tax Rebate there are still no other incentives designed to boost the wind power industry or private development at the moment.

Much of the problem with Arkansas is its lack of a renewable portfolio standard, which means it essentially doesn’t have the regulation in place to produce large amounts of renewable energy – it doesn’t even have a target for the next few years for reducing the amount of gas, oil and coal it consumes.

Find out more about the renewable incentives currently available for Arkansas on the Database of State Incentives for Renewables and Efficiency.

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