Arkansas Solar Panel Laws: Your Rights & How to Exit a Solar Contract

Arkansas homeowners who sign solar contracts generally have protections under both federal and state law. The FTC Cooling-Off Rule provides 3 business days for home solicitation sales, and Arkansas's Home Solicitation Sales Act (Ark. Code Ann. Section 4-89-101 et seq.) may provide up to 5 business days for qualifying transactions. Arkansas's Deceptive Trade Practices Act and the Arkansas Public Service Commission's net metering rules create additional important protections. We always recommend consulting a qualified Arkansas attorney before taking action.

Right to Cancel / Cooling-Off Period in Arkansas

If you recently signed a solar contract in Arkansas, your most immediate protection is the cooling-off period. Arkansas provides some of the broader cancellation windows in the region, potentially giving homeowners more time than the federal minimum to reconsider a solar purchase.

Federal FTC Cooling-Off Rule (3 Business Days)

The Federal Trade Commission's Cooling-Off Rule (16 CFR Part 429) generally provides Arkansas homeowners with 3 business days to cancel a sale that occurred at your home, workplace, or anywhere other than the seller's permanent place of business. Door-to-door solar sales are common throughout Arkansas — particularly in the Little Rock, Fayetteville-Springdale-Rogers, Fort Smith, and Jonesboro metro areas — making this rule frequently applicable.

Under this rule, the solar company is generally required to:

• Provide you with two copies of a cancellation form at the time of sale
• Inform you of your right to cancel within 3 business days
• Process your cancellation and refund any payments within 10 business days of receiving your notice

Arkansas Home Solicitation Sales Act (5 Business Days)

Arkansas Code Annotated Section 4-89-101 et seq. (the Home Solicitation Sales Act) may provide an extended cancellation window of 5 business days for qualifying home solicitation transactions. This is broader than the federal 3-day rule. Under this statute, if a solar sale was conducted at your residence through door-to-door solicitation, you may have up to 5 business days to cancel the transaction. The seller is required to provide a written notice of your cancellation rights.

Arkansas Statute of Limitations

For written contract disputes in Arkansas, the statute of limitations is generally 5 years under Ark. Code Ann. Section 16-56-111. For fraud claims, the limitation is typically 3 years from discovery. If you believe misrepresentations were made during your solar sales process, act promptly to preserve your legal options.

Arkansas Consumer Protection Laws Relevant to Solar

Arkansas Deceptive Trade Practices Act (ADTPA)

The Arkansas Deceptive Trade Practices Act (Ark. Code Ann. Section 4-88-101 et seq.) is the state's primary consumer protection statute and may apply to solar contract disputes. Under the ADTPA, homeowners may have grounds for legal action if the solar company engaged in:

• Deceptive or unconscionable trade practices — such as overstating energy production estimates, misrepresenting monthly savings, or making false claims about system performance
• False advertising — including misleading representations about energy savings, available incentives, or the terms of financing
• Knowingly making a false representation — about the goods, services, or the financial terms of the solar agreement

Under the ADTPA, consumers may recover actual damages and, in cases involving willful violations, the court may award up to three times actual damages plus reasonable attorney's fees under Section 4-88-113. The Arkansas Attorney General may also investigate and take enforcement action.

Arkansas Contractor Licensing

Arkansas requires contractors performing work over a certain dollar threshold to be licensed through the Arkansas Contractors Licensing Board. Solar installations typically fall under this requirement. If the solar company or its installers were not properly licensed in Arkansas, this may provide additional grounds for contract rescission or a claim under the ADTPA. You can verify a contractor's license status through the Arkansas Contractors Licensing Board.

Federal Truth in Lending Act (TILA)

If your solar agreement involves financing (a solar loan), the federal Truth in Lending Act may provide additional protections. TILA requires clear disclosure of all loan terms, including interest rates, total cost, and monthly payments. If the solar company or its financing partner failed to provide accurate TILA disclosures, you may have the right to rescind the entire transaction within 3 years of closing.

Solar-Specific Regulations in Arkansas

Net Metering in Arkansas

Arkansas has had significant developments in its net metering policies. The Arkansas Public Service Commission (APSC) has established rules governing net metering for distributed generation, though these rules have been modified in recent years. Key aspects of Arkansas net metering include:

Important net metering considerations in Arkansas:

• Net metering availability — Arkansas has had net metering rules for investor-owned utilities, though the compensation structure has evolved through APSC proceedings
• Rate changes — the APSC has conducted proceedings that may have modified how solar customers are compensated for excess generation, potentially moving from retail-rate net metering to different compensation structures
• Grandfathering provisions — existing solar customers may be grandfathered under previous net metering rates, depending on when they interconnected and the specific APSC orders in effect
• System size limits — net metering eligibility may be limited to systems of a certain capacity, typically up to 25 kW for residential systems

Arkansas Public Service Commission (APSC) Rules

The APSC regulates investor-owned utilities in Arkansas, including Entergy Arkansas and other providers. The APSC has authority over:

• Net metering rates and compensation — including how solar customers are credited for excess generation
• Interconnection standards — requirements for connecting residential solar systems to the utility grid
• Rate design — how utility rates are structured, which can affect the economics of solar for residential customers
• Distributed generation proceedings — the APSC has conducted multiple proceedings addressing the future of distributed generation compensation in Arkansas

Arkansas Solar Access and Property Tax

Arkansas does not currently have a broad solar access law that prevents HOAs from restricting solar installations, though individual covenants may vary. Regarding property taxes, the specifics of how solar installations affect property tax assessments in Arkansas may vary by county. If a solar salesperson made specific claims about property tax benefits that are not accurate, this could be relevant to a consumer protection claim.

Arkansas Sales Tax Exemption

Arkansas has considered various tax treatments for solar energy equipment. The availability and scope of any sales tax exemptions for solar equipment may have changed — verify current provisions with the Arkansas Department of Finance and Administration. If the solar company represented specific tax benefits that were inaccurate, this could constitute a misrepresentation.

Common Solar Contract Issues in Arkansas

Based on publicly reported complaints and consumer experiences, these are among the most frequently reported solar contract issues in Arkansas:

How to Exit a Solar Contract in Arkansas — Step by Step

If you're an Arkansas homeowner looking to exit your solar contract, the appropriate approach depends on your specific situation. Below is a general framework — we always recommend consulting a qualified Arkansas attorney before taking action.

Step 1: Gather Your Documents

Before taking any action, collect the following:

• Your original solar contract (lease, PPA, or loan agreement)
• Any marketing materials, brochures, or written estimates you received
• Records of any verbal promises made during the sales presentation (write them down from memory if needed)
• Your electricity bills from before and after solar installation
• Any correspondence with the solar company
• Your solar system's actual energy production data (available through your inverter's monitoring portal)

Step 2: Determine Your Cancellation Window

• Within 5 business days of signing (home solicitation): Send a cancellation notice via certified mail immediately. Reference both the FTC Cooling-Off Rule and the Arkansas Home Solicitation Sales Act (Ark. Code Ann. Section 4-89-101)
• Past the cooling-off period but before installation: Check your contract for a pre-installation cancellation clause. Pre-installation cancellation guide →
• After installation: Proceed to Steps 3-5 below

Step 3: Review Your Contract for Exit Provisions

Carefully review your contract (or have an attorney review it) for:

• Termination clause: Most solar contracts include a provision for early termination, often with a buyout fee
• Performance guarantees: If the system is underperforming the guaranteed minimum, you may have contractual grounds for relief
• Transfer provisions: If you're selling your home, the contract may allow you to transfer the agreement to the new owner
• Default provisions: Understand what constitutes a default and the consequences before taking any action

Step 4: Evaluate ADTPA Claims

If you believe the solar company made misrepresentations, consult an Arkansas attorney about potential ADTPA claims. Common bases include:

• Overstated energy production or savings projections
• Misrepresentation of net metering rates or compensation structure
• Failure to disclose the annual escalator clause or its long-term impact
• False claims about available tax credits or incentives
• Failure to disclose UCC-1 lien filings
• Unlicensed contractor performing the installation

Step 5: Send a Formal Demand

If you have a viable claim, your attorney will typically send a formal demand letter to the solar company. This demand often initiates settlement negotiations that may result in contract cancellation, buyout reduction, or other relief. The potential for treble damages under the ADTPA creates a strong incentive for companies to negotiate.

Step 6: Consider Professional Exit Services

If you need assistance navigating the exit process, professional solar contract exit services may be an option. Compare solar cancellation companies →

Arkansas Consumer Protection Agencies & Resources

If you're experiencing issues with a solar company in Arkansas, these agencies may be able to help:

Frequently Asked Questions About Arkansas Solar Panel Laws