Most Lexington homes are served by Kentucky Utilities (KU), not LG&E. Kentucky uses net billing, not full-retail net metering: KU credits your solar exports at about 7.366 cents per kWh under its NMS-2 tariff, well below the roughly 14.98 cents you pay to buy power. So Lexington solar pays best on the power you use yourself, and batteries help.
- Kentucky residential power runs about 14.98 cents per kWh (EIA, May 2026), one of the lower rates in the country, so a Lexington bill is offset at retail only for the power you use on-site.
- Your Lexington utility is almost always Kentucky Utilities (KU). This is the KU half of LG&E and KU, and it is different from Louisville, which is served by LG&E. Confirm the name on your electric bill before you compare quotes.
- KU credits exports at about 7.366 cents per kWh under its successor Net Metering Service-2 (NMS-2) tariff, set by the Kentucky Public Service Commission on September 24, 2021 (Case 2020-00349) (KY PSC); verify the current rate before you sign.
- Kentucky has no statewide solar tax credit or rebate for home solar in 2026, so your payback rests on the export credit and the power you offset, not on a state incentive.
- The 30% federal homeowner credit (Section 25D) ended for expenditures made after December 31, 2025 (IRS), so a 2026 cash or loan buyer in Lexington cannot claim it.
If you own a home in Lexington, this is how rooftop solar actually pays you back in 2026, told straight. Lexington sits in the Bluegrass region of central Kentucky, with decent but not desert-level sun, and two things drive the math here: your utility is Kentucky Utilities, and Kentucky switched from net metering to net billing. KU credits the power you export at a fraction of the retail rate, so the value of Lexington solar comes mostly from the power you use in your own home. This page covers your exact utility, the local permit, what a Lexington roof produces, and how to tell if it is a good fit.
Using NREL PVWatts and the current EIA rate, MySolarFY estimates a typical 7 kW rooftop system in Lexington (ZIP 40507) produces about 9,363 kWh a year (NREL PVWatts v8), on a moderate local sun resource of about 4.76 kWh per square meter per day. That output is worth roughly $1,400 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 KU credits exports at about 7.366 cents.
Lexington solar at a glance
Here is the short version of what drives your payback in Lexington 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) |
|---|---|
| Serving utility | Kentucky Utilities (KU), the KU half of LG&E and KU. Not LG&E, which serves Louisville. Check your bill. |
| Residential rate | About 14.98 cents per kWh statewide (EIA, May 2026) |
| Sun resource | Moderate; a 7 kW Lexington system (ZIP 40507) makes about 9,363 kWh a year (PVWatts) |
| Export program | Net billing, not full-retail net metering, for new customers (2019 Senate Bill 100) |
| KU export credit | About 7.366 cents per kWh under the NMS-2 tariff (KY PSC Case 2020-00349, September 24, 2021) |
| State incentive | None; Kentucky has no statewide solar tax credit or rebate in 2026 |
| Local permit | Lexington-Fayette Urban County Government (LFUCG) Division of Building Inspection, via the Accela portal |
| Federal credit | Section 25D ended for expenditures made after December 31, 2025 |
| Sources | KY PSC, EIA, DSIRE |
Which utility serves your Lexington home?
For almost every home inside Lexington, your electric utility is Kentucky Utilities (KU). KU is the Kentucky Utilities half of the LG&E and KU company, and it is a different utility from LG&E, which serves Louisville. That distinction matters, because the two set slightly different export credits under their solar tariffs. The fastest way to confirm is to look at your own electric bill; it names your utility. Do not assume from a neighboring county. Once you know you are on KU, you can read the full rate detail on our LG&E and KU solar guide and see how Kentucky treats exports on our Kentucky solar guide.
The big change: net billing replaced net metering
Kentucky replaced full-retail net metering with net billing. This is the biggest change for Lexington solar in 2026. Under 2019 Senate Bill 100, the Kentucky Public Service Commission set below-retail export credits for new customers, so the power you send to the grid earns well less than the retail price you pay to buy it back. For KU, the PSC set a successor Net Metering Service-2 (NMS-2) export credit of about 7.366 cents per kWh in its order of September 24, 2021 (Case 2020-00349) (KY PSC Net Metering Order). That credit can be revisited in future KU rate cases, so verify the current export rate before you sign. For the mechanics of how export credits work, see how net metering credits your solar exports.
What this means in plain terms: compared with the roughly 14.98 cents you pay to buy power, an exported kWh is worth only about half as much in Lexington. So the value of your system comes mostly from the power you consume on-site. Sizing to your own usage and shifting big loads, like laundry, the dishwasher, EV charging, and pre-cooling the house, into daylight hours protects far 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 Lexington now
A home battery lets you keep the power you would otherwise sell cheap. Because an exported kWh earns about 7.366 cents on KU while a kWh you use is worth about 14.98 cents, storing your midday surplus and using it in the evening captures roughly twice the value of exporting it. In Lexington, storage also gives you backup through summer storms and winter cold snaps, when outages are most likely. 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.
Lexington permits and interconnection
For a home inside Lexington, the Lexington-Fayette Urban County Government issues the permit. Because Lexington and Fayette County share one merged government, rooftop solar is permitted by the LFUCG Division of Building Inspection as a building and electrical permit, filed through the city’s Accela online portal, with a plan review of the structural and electrical design before work starts (LFUCG Building Inspection). A licensed installer normally pulls this permit and handles the plan set for you. Separately, Kentucky Utilities runs the interconnection application and approves your system to connect and export under its NMS-2 tariff, which is a different step from the city permit. A good local installer manages both the LFUCG permit and the KU interconnection so you are not chasing paperwork.
Lexington and federal tax credits: what is gone in 2026
The 30% federal homeowner credit has ended, so do not count on it. The federal Residential Clean Energy Credit (Section 25D) ended for expenditures made after December 31, 2025 under the One Big Beautiful Bill Act, so a Lexington homeowner who buys solar with cash or a loan in 2026 cannot claim it (IRS). Kentucky offers no statewide solar tax credit or rebate to replace it, so a 2026 Lexington system stands on its own economics: the export credit and the power you offset. 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 Lexington 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.
How to choose a solar installer in Lexington
Lexington has a competitive installer market across central Kentucky. Rather than chasing a “best” list, screen any company against objective criteria:
- NABCEP certification, the industry’s professional standard for PV installers.
- A valid Kentucky electrical contractor license and proper permitting for the LFUCG Division of Building Inspection.
- A clear workmanship and equipment warranty in writing.
- Real Lexington experience and help with both the LFUCG permit and your KU interconnection 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, see our Kentucky solar guide and the solar incentives by state hub.
See what solar programs are available in your ZIP code
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Frequently asked questions
Who is my electric utility in Lexington, KY? For almost every home inside Lexington it is Kentucky Utilities (KU), the KU half of LG&E and KU. It is a different utility from LG&E, which serves Louisville. The safest move is to check your electric bill, which names your utility, because your utility sets your solar export credit and rate plan.
Does Lexington still have net metering in 2026? No, not the old full-retail kind for new customers. Under 2019 Senate Bill 100, Kentucky uses net billing. KU credits new solar customers for exports at about 7.366 cents per kWh under its NMS-2 tariff, set by the Kentucky Public Service Commission in 2021. That is well below the roughly 14.98 cents you pay to buy power, so the value of solar comes mostly from using your own power.
What does a Lexington solar system produce? A typical 7 kW rooftop system in Lexington (ZIP 40507) produces about 9,363 kWh a year in our NREL PVWatts estimate, on a moderate local sun resource of about 4.76 kWh per square meter per day. Your real output depends on roof pitch, direction, and shade, so get a written production estimate for your specific roof.
Who issues the solar permit in Lexington? For homes inside Lexington, the Lexington-Fayette Urban County Government (LFUCG) Division of Building Inspection issues a building and electrical permit through its Accela online portal and reviews the plans. Kentucky Utilities separately runs the interconnection approval. A licensed installer normally handles both.
Is there a solar tax credit in Kentucky in 2026? No. Kentucky has no statewide solar tax credit or rebate in 2026, and the 30% federal homeowner credit (Section 25D) ended for expenditures made after December 31, 2025, so a 2026 cash or loan buyer cannot claim it. Your payback rests on the KU export credit and the power you offset.
Is solar worth it in Lexington now that exports pay less? It can be. Every kWh you use yourself offsets power at about 14.98 cents, so a system sized to your own usage still pays back. The weak spot is exported power, credited near 7.366 cents on KU, so payback depends on sizing to your usage and, for many homes, adding a battery. Run your own numbers with a written production estimate before you commit.
Reviewed by the MySolarFY team. Figures were verified against the linked Kentucky Public Service Commission (Case 2020-00349), EIA, NREL PVWatts, LFUCG, DSIRE, and IRS sources as of August 2026. Export credits, rate plans, and net-billing rules change and are reset periodically by the Kentucky Public Service Commission, so confirm current terms with each source 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. 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.
