State solar guide
Kentucky solar economics in 2026 depend entirely on your utility rate, available state incentives, and net-metering rules. The federal residential credit expired December 31, 2025. We present the honest picture for your location.
Sources: ElectricChoice June 2026 | NREL PVWatts (verify at your assessment) | EnergySage June 2026 | Federal residential credit: Section 25D expired December 31, 2025, H.R.1 (One Big Beautiful Bill Act).
Net metering
Net metering structure varies significantly by utility in Kentucky. LG&E (Louisville Gas and Electric) and KU Energy (Kentucky Utilities) offer full 1-to-1 retail net metering for residential customers with monthly credit rollover, covering most of the state's urban and suburban service area. Duke Energy Kentucky transitioned to a Net Metering II (NM II) tariff in January 2025, crediting excess generation at the avoided-cost rate, considerably below retail. Rural electric cooperatives are exempt from the state net metering mandate and TVA-member utilities are excluded. Kentucky SB 100 (2019) set the maximum system size at 45 kW and directed the PSC to determine crediting structures for each utility, as of June 2026.
LG&E (Louisville Gas and Electric, serving Louisville and surrounding areas): full 1-to-1 retail net metering with monthly credit rollover. KU Energy (Kentucky Utilities, serving central and eastern Kentucky): full 1-to-1 retail net metering with monthly credit rollover. Duke Energy Kentucky (serving parts of northern and western Kentucky): Net Metering II (NM II) tariff since January 2025, excess credited at avoided-cost rate below retail; Duke KY customers who pair solar with battery may qualify for the PowerPair rebate. Rural electric cooperatives (including Big Sandy Rural Electric and Jackson Energy Cooperative): exempt from state mandate; verify current net metering terms directly with your co-op. TVA-member utilities: excluded from state net metering requirements.
Program: NM1_partial. Last verified: June 1, 2026. DSIRE source (opens in new tab).
Verify with your utility
Net-metering rules change by utility and program cycle. Confirm current export credit rates and eligibility with your specific Kentucky utility before contracting. Current program details at DSIRE (opens in new tab).
State incentive stack
The federal residential credit expired December 31, 2025. The programs below are what remains for Kentucky homeowners. Amounts and availability change; every program is date-stamped and linked to its DSIRE source.
Federal residential solar credit (Section 25D): expired. The Section 25D residential investment tax credit expired December 31, 2025. The residential credit rate is 0%. State and local incentives below may still significantly reduce your net system cost. Commercial systems still qualify for Section 48E (30%).
| Program | Benefit | Eligibility | Status | Source |
|---|---|---|---|---|
| Kentucky Solar Incentives State and local programs Incentive amounts and availability change frequently. Verify at dsireusa.org before relying on any program. | See description Duke Energy PowerPair rebate: up to $9,000 for a qualified solar plus battery system for Duke Energy Kentucky residential customers. This is the largest single residential solar incentive currently available in Kentucky, but it applies only to Duke Energy Kentucky service territory, not to LG&E or KU customers. No statewide rebate program. Verify current PowerPair availability and capacity with Duke Energy Kentucky before relying on this amount. | Kentucky homeowners. Verify current programs at dsireusa.org. | Limited | DSIRE (opens in new tab) |
Data last verified June 1, 2026. Incentive programs change; verify current amounts and availability at dsireusa.org (opens in new tab) before committing to a project.
Battery storage incentives in Kentucky
Duke Energy PowerPair rebate: up to $9,000 for a qualified solar plus battery storage system for Duke Energy Kentucky residential customers. This is the largest single residential solar incentive available in Kentucky and applies only to customers in Duke Energy Kentucky service territory. Verify current program availability and capacity with Duke Energy Kentucky before relying on this amount. No comparable storage incentive exists for LG&E, KU Energy, or rural cooperative customers in Kentucky.
Savings example
This example uses real Kentucky market data. No federal residential credit is applied. Figures are illustrative; your in-home assessment uses your actual utility bills and the current rate schedule for your specific utility.
An 8 kW system at the EnergySage June 2026 Kentucky average of $2.55 per watt costs approximately $20,400 with no incentives reducing the out-of-pocket cost for LG&E or KU customers. The federal residential credit is zero (Section 25D expired December 31, 2025). Kentucky has no state tax credit, no SREC market, and no property or sales tax exemptions. At 4.79 peak sun hours per day and LG&E full retail net metering at 13.42 cents per kWh (the lowest electricity rate in this regional group), estimated annual electricity bill savings are $1,000 to $1,200, producing an illustrative payback of approximately 18 to 19 years. Duke Energy Kentucky customers on the NM II avoided-cost tariff would see even lower annual savings and longer payback. Duke Energy Kentucky customers who pair solar with battery storage may qualify for the PowerPair rebate of up to $9,000, which would materially reduce net cost. Kentucky is viable for solar primarily for customers with very high electricity usage and strong self-consumption, and for Duke territory customers qualifying for the PowerPair rebate. Figures are illustrative. Your in-home assessment will use your actual utility bill, utility territory, and current program status.
Kentucky homeowner savings example (illustrative)
Illustrative example. Federal residential credit: $0 (Section 25D expired December 31, 2025). Your estimate will use your actual utility bills and current rate schedule.
Permitting
Permit requirements in Kentucky vary by municipality. Verify permit timelines and fees with your installer and local Authority Having Jurisdiction (AHJ).
Commercial solar in Kentucky
The commercial solar credit (Section 48E, 30 percent) remains available for qualifying commercial projects. Construction must begin by July 4, 2026 to qualify for the full placed-in-service window. Combined with MACRS accelerated depreciation and 100 percent first-year bonus depreciation, the combined first-year federal benefit can reach 45 to 55 percent of project cost for many Kentucky business owners. Direct Pay is also available for nonprofits, municipalities, and other tax-exempt entities.
Commercial solar overviewCommercial solar projects must begin construction by July 4, 2026 to qualify for the 30 percent Section 48E federal tax credit. After that date, the system must be placed in service by December 31, 2027.
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Frequently asked
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