In April 2001, Arkansas enacted legislation directing the Arkansas Public Service Commission (PSC) to establish net-metering rules for certain renewable-energy systems. The Arkansas Public Service Commission (PSC) adopted net-metering rules in July 2002 (Order No. 02-046-R). Section 3 applies to the interconnection of net-metered facilities to existing electric power systems.* Systems that generate electricity using solar, wind, hydro, geothermal and biomass resources are eligible to interconnect and net meter. Microturbines and fuel cells using renewable resources are also eligible. Net metering is available to residential systems up to 25 kilowatts (kW) in capacity and non-residential systems up to 300 kW.

Systems must meet all performance standards established by local and national electric codes, including the National Electric Code (NEC), the Institute of Electrical and Electronic Engineers (IEEE), the National Electrical Safety Code (NESC) and Underwriters Laboratories (UL). In addition, utilities may require facilities to meet any other safety and performance standards approved by the PSC. Customers must pay any equipment costs, including those necessary to fulfill safety standards. The PSC's rules require mutual indemnification, but do not address insurance requirements. In 2012, the PSC amended the Standard Interconnection Agreement to exempt local, state and federal government entities and agencies from previously required indemnity agreements (Docket 12-001-R Order No. 6). Utilities must use a PSC-approved standard interconnection agreement for interconnected facilities.

Arkansas requires customers to install an external disconnect switch, but this may be waived if the customer meets certain conditions. First, the customer's inverter must be designed to shut down or disconnect in the event that utility service is lost. This cannot be manually overridden by the customer. The inverter also must be warranted by the manufacturer to shut down or disconnect upon utility service loss. Finally, the inverter must be properly installed and operated, and may need to be inspected or tested by the utility.

* Municipal utilities do not fall under the PSC's jurisdiction and are not required to follow the PSC's rules. The PSC regulates investor-owned and cooperative utilities.