Kentucky has cheap power, about 14.98 cents per kWh, so solar pays here on steady sun and self-use, not a high rate. Under 2019 Senate Bill 100, Kentucky replaced 1:1 net metering with net billing: LG&E, KU, Duke Energy Kentucky, and Kentucky Power each set a below-retail export credit, so exports now earn less than retail.
- Kentucky residential power runs about 14.98 cents per kWh (EIA Electric Power Monthly, May 2026), one of the lower rates in the country, so payback leans on steady production and on using your own power.
- Your utility is most likely LG&E, KU, Duke Energy Kentucky, or Kentucky Power, alongside rural electric cooperatives and TVA-served systems, and it runs the interconnection and export program you enroll in (SEIA).
- Net metering was replaced. Kentucky’s 2019 Senate Bill 100 ended the 1:1 retail credit for new customer-generators; the Kentucky Public Service Commission now sets each utility’s export credit below the retail rate, so verify your utility’s current rate before you sign (DSIRE).
- Kentucky has no statewide solar tax credit or rebate for home solar in 2026, so the savings case rests on your bill offset, not a state incentive (SEIA).
- The 30% federal homeowner credit (Section 25D) ended for expenditures made after December 31, 2025 (IRS).
If you own a home in Kentucky, this is how rooftop solar actually pays you back in 2026, told straight. Kentucky power is cheap by national standards, and the state made one big change that reshaped the math: in 2019 it swapped 1:1 net metering for net billing, so the power you send back to the grid now earns less than the retail price. There is also no state solar tax credit, and the 30% federal homeowner credit (Section 25D) ended after December 31, 2025. That does not mean solar stopped working here. It means the smart play is to use more of your own power and, for many homes, to add a battery. This page covers what Kentucky pays, what changed under Senate Bill 100, and how to tell if your roof is a good fit.
Using NREL PVWatts and the current EIA rate, MySolarFY estimates a typical 7 kW rooftop system in Louisville produces about 9,404 kWh a year (NREL PVWatts v8), which is worth roughly $1,409 a year at Kentucky’s 14.98 cents per kWh residential rate (EIA, May 2026). But you capture the full value only on the power you use on-site, since exports are credited below retail under net billing, so timing your usage and storing power both raise your return.
Kentucky solar at a glance
Here is the short version of what drives your payback in Kentucky in 2026. Every figure below is sourced, and the export-credit and tax-credit lines are the ones that changed.
| Detail | What to know (2026) |
|---|---|
| Main utilities | LG&E and KU (both LG&E and KU Energy / PPL), Duke Energy Kentucky, Kentucky Power (AEP), plus co-ops and TVA-served systems |
| Residential rate | About 14.98 cents per kWh, low by national standards (EIA, May 2026) |
| Sun resource | Solid; a 7 kW Louisville system makes about 9,404 kWh a year (PVWatts) |
| Export program | Net billing since 2019 Senate Bill 100, not retail net metering, for new customers |
| Export credit | Set per utility by the Kentucky PSC, below the retail rate; confirm your utility’s current rate |
| State tax credit | None; Kentucky has no statewide residential solar tax credit or rebate |
| Federal credit | Section 25D ended for expenditures made after December 31, 2025 |
| Source | DSIRE, Kentucky PSC, SEIA |
Why solar still pays in Kentucky, even with cheap power
Kentucky’s challenge is a low electric rate, not weak sun. At about 14.98 cents per kWh, Kentucky power is cheaper than in most states (EIA, May 2026), so you are not offsetting an expensive bill the way a homeowner in the Northeast is. What carries the case is steady production and using your own power: a 7 kW system in Louisville makes about 9,404 kWh a year in our PVWatts estimate, and every kilowatt-hour you consume yourself offsets power at the full retail rate. Estimate your own roof with NREL’s free PVWatts calculator; your real output depends on roof pitch, direction, and shade. The catch is what happens to the power you do not use yourself, which is where Kentucky’s rules changed.
The big change: net metering was replaced by net billing
Kentucky no longer gives new solar customers full-retail net metering. This is the most important thing to understand about Kentucky solar in 2026. In 2019, Kentucky passed Senate Bill 100, which ended the old full-retail, 1:1 net metering deal for new solar customers and directed the Kentucky Public Service Commission to set a compensation rate for exported power through each utility’s own tariff (DSIRE). LG&E, KU, Duke Energy Kentucky, and Kentucky Power each filed a successor net-billing tariff, and the PSC approved export credits that are below the retail price you pay to buy power back (Kentucky Public Service Commission). The exact cents-per-kWh credit differs by utility and is reset in rate cases, so verify your utility’s current export rate before you sign a contract. For the mechanics of how export credits work in general, see how net metering credits your solar exports. If LG&E or KU is your utility, our LG&E and KU solar and net metering guide details their below-retail export credits.
What this means in plain terms: the value of Kentucky solar now comes mostly from the power you consume in your own home, not the power you send back. Because the export credit sits below retail, sizing a system to your own usage and shifting big loads such as laundry, EV charging, and cooling into daylight hours protects more of your savings than oversizing for export ever could. To see how offsetting your own usage lowers the bill, read how solar lowers your electricity bill.
Why batteries matter more in Kentucky now
A battery pays better in Kentucky now because exports earn less than they used to. A home battery lets you keep the power you would otherwise sell cheap. Because an exported kWh earns a below-retail credit while a kWh you use is worth about 14.98 cents, storing your midday surplus and using it in the evening captures more value than exporting it. That is a real change from the old net-metering days, when a battery was mostly about backup. In today’s Kentucky, storage is also an economic tool: it raises how much of your own production you actually use. A battery adds up-front cost and is not right for every home, so treat it as a payback question, not a default. For a framework on running those numbers, see our guide on whether solar panels are worth it. For Kentucky-specific pricing and payback, see our Kentucky solar panel cost and payback guide.
Kentucky and federal tax credits: what is gone in 2026
Kentucky has no state solar credit, and the federal homeowner credit has ended, so do not count on either. Kentucky does not offer a statewide residential solar income-tax credit or rebate, so there is no state incentive to reduce a 2026 install (SEIA). On the federal side, the 30% Residential Clean Energy Credit (Section 25D) ended for expenditures made after December 31, 2025 under the One Big Beautiful Bill Act, so a Kentucky homeowner who buys solar with cash or a loan in 2026 cannot claim it (IRS). One federal credit still exists but is not yours to claim: Section 48E is a commercial credit that the business owning a leased or PPA system claims, not the homeowner. For the full timeline, see what the federal solar tax credit change means in 2026.
How you pay changes what you get
How you finance solar decides who owns the system and who claims any remaining benefit. This is the part of a quote worth reading closely.
| How you pay | Up-front cost | Who owns it | Export credits |
|---|---|---|---|
| Cash | Full system price | You | Credited to you |
| Solar loan | Little or none, financed over time | You | Credited to you |
| Lease or PPA | $0-up-front where you qualify | A third-party company | You still see bill credits; the company keeps ownership and any commercial credit |
If you own the system (cash or loan), you keep the export credits and any bill savings. If you lease or sign a PPA, a third party owns the panels, you get a lower or fixed power price with no up-front cost, and that company claims any commercial tax credit, not you. Neither path gives a 2026 Kentucky homeowner the federal residential credit, since it ended after December 31, 2025. Solar panels are not free, and a lease or PPA is a long-term contract, so compare the total cost of each path before you decide. To weigh loan against lease, see how solar financing options compare.
How to choose a solar installer in Kentucky
Rather than chasing a “best” list, screen any Kentucky company against objective criteria:
- NABCEP certification, the industry’s professional standard for PV installers.
- A valid Kentucky electrical license and the proper local permits for your county or city.
- A clear workmanship and equipment warranty in writing.
- Real Kentucky experience, verifiable reviews, and help with the LG&E, KU, Duke Energy Kentucky, or Kentucky Power interconnection and net-billing paperwork.
- A written production estimate and a transparent quote you can compare. For a checklist, see the right questions to ask a solar installer.
MySolarFY matches you with licensed installers that serve your area so you can compare real local quotes side by side, with no obligation. For the statewide picture and neighboring states, see our solar incentives by state hub.
For the local numbers where you live, see our city guides for Louisville solar and Lexington solar, each with its own utility and production math.
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Frequently asked questions
Does Kentucky still have net metering in 2026? Not the old full-retail kind for new customers. Kentucky’s 2019 Senate Bill 100 ended the 1:1 retail credit and directed the Public Service Commission to set each utility’s export rate through its own tariff, so LG&E, KU, Duke Energy Kentucky, and Kentucky Power now credit exported power below the retail price (DSIRE). Customers who interconnected under the older program may be grandfathered on better terms. Because the credit is below retail, the value of Kentucky solar now comes mostly from using your own power. Verify your utility’s current export rate before you sign.
Is there a Kentucky state solar tax credit in 2026? No. Kentucky does not offer a statewide residential solar income-tax credit or rebate, so there is no state incentive to reduce the cost of a 2026 install (SEIA). The savings case rests on your bill offset and your financing, so get a written production estimate before you decide.
What happened to the federal solar tax credit? The 30% federal Residential Clean Energy Credit (Section 25D) ended for expenditures made after December 31, 2025 under the One Big Beautiful Bill Act. A Kentucky homeowner who buys solar in 2026 with cash or a loan cannot claim it. A separate commercial credit, Section 48E, can apply to leased and PPA systems, but the business that owns the system claims it, not the homeowner.
Is solar worth it in Kentucky if power is cheap and the credits are gone? It can be, but the case is different than it used to be. A 7 kW Louisville system makes about 9,404 kWh a year in our PVWatts estimate, and every kWh you use yourself offsets power at about 14.98 cents. The weak spot is exported power, credited below retail under net billing, so payback depends on sizing to your own usage and, for many homes, adding a battery. Run your own numbers with a written production estimate before you commit.
Should I add a battery to my Kentucky solar system? For many Kentucky homes, storage now makes more financial sense than it did under old net metering. Because you use stored power at about 14.98 cents instead of exporting it for a below-retail credit, a battery captures more value from your midday surplus. It also adds up-front cost, so weigh the payback for your usage pattern rather than treating it as automatic.
Who is my utility for solar in Kentucky? Most Kentucky homes are served by LG&E or KU (both LG&E and KU Energy companies), Duke Energy Kentucky in the north, or Kentucky Power (an AEP company) in the east, with many homes on rural electric cooperatives or TVA-served systems (SEIA). Your utility runs the interconnection and the net-billing program you enroll in, so check your bill to confirm which one serves you.
Reviewed by the MySolarFY team. Figures were verified against the linked EIA, NREL, DSIRE, Kentucky Public Service Commission, SEIA, and IRS sources as of August 2026. Export credits, net-billing rules, and rates change and are reset by the Kentucky Public Service Commission and each utility, so confirm current terms with your utility before you decide. MySolarFY does not provide tax or financial advice; consult a licensed professional about your own situation. Learn more about the MySolarFY team and how we work.
MySolarFY is a free service that matches homeowners with licensed solar installers. We are not an installer, financing company, or government program. “No up-front cost” refers to qualifying lease or PPA financing, where eligible homeowners may have no out-of-pocket cost at installation. Lease and PPA terms typically run 20 to 25 years, may include an annual price escalator, and total payments may exceed the cost of a cash purchase. Homeowners do not get the federal residential credit that ended after December 31, 2025, and Kentucky has no state solar tax credit. Solar panels are not free and monthly payments apply. Eligibility, savings, incentives, export credits, and rates vary and are not guaranteed. See our full disclaimer.
