- New LG&E and KU solar customers no longer get 1:1 retail net metering. Under Kentucky Senate Bill 100, the state Public Service Commission set below-retail export credits, so the power you export is worth less than the power you buy (Kentucky SB 100; Kentucky PSC order, Case 2020-00349).
- The PSC-approved export credit is about 6.924 cents per kWh for LG&E and 7.366 cents for KU, based on the utility’s avoided cost, set in the September 24, 2021 order. Verify the current figure, because 2025 to 2026 rate cases have proposed changes (Kentucky PSC press release).
- Kentucky residential power runs about 14.98 cents per kWh (EIA Electric Power Monthly, Table 5.6.A, May 2026), below the national average of about 18.44 cents, so the export credit lands at roughly half of retail.
- You keep the full retail value only on the solar you use as your home makes it. Power you export earns the lower credit, so sizing to your own usage matters more here than in a 1:1 state.
- Homes with net metering started before September 24, 2021 are on the older arrangement and are expected to keep their prior kWh credits; confirm your status with LG&E or KU (LG&E and KU net metering).
- The 30% federal homeowner credit (Section 25D) ended for expenditures made after December 31, 2025 (IRS).
If Louisville Gas and Electric (LG&E) or Kentucky Utilities (KU) is your electric company, here is how rooftop solar pays you back in 2026, and why the export credit rate matters more here than almost anything else. Kentucky changed its rules with Senate Bill 100 in 2019, and new solar homes no longer get the old one-to-one retail credit. Instead, LG&E and KU pay a set, below-retail rate for the power you send to the grid. This page explains that net-billing rate, how to read it, how interconnection works, and how to tell if solar still pencils out on a Kentucky bill.
LG&E and KU at a glance
LG&E and KU are sister utilities owned by PPL, serving most of Kentucky. LG&E covers the Louisville area, KU covers much of central, southern, and eastern Kentucky, including Lexington, and both run net metering the same way under one Public Service Commission framework. For the statewide picture beyond LG&E and KU territory, see our Kentucky solar guide.
| Detail | What to know |
|---|---|
| Utilities | LG&E (Louisville area) and KU (central, southern, eastern Kentucky), both PPL companies |
| Net metering rule | Senate Bill 100 (2019) ended 1:1 retail net metering for new customers |
| Export credit (LG&E) | About 6.924 cents per kWh, set on avoided cost (PSC Case 2020-00349); verify current |
| Export credit (KU) | About 7.366 cents per kWh, set on avoided cost (PSC Case 2020-00349); verify current |
| Kentucky retail rate | About 14.98 cents per kWh (EIA, May 2026), so the credit is roughly half of retail |
| System size cap | 45 kW maximum for net-metered systems |
| Before you switch on | The utility must grant Permission to Operate |
The export credit is the whole story in Kentucky. In a one-to-one net-metering state, every kilowatt-hour you export is worth the same as one you buy, so oversizing is easy to justify. Here it is not. LG&E and KU pay a fixed, below-retail rate for exports, so the value of solar comes mostly from the power you use in your own home the moment your panels make it. Estimate your roof’s likely output with NREL’s free PVWatts calculator, then size to your usage rather than to a big export surplus. For the mechanics of how export credits work, see how net metering credits your solar exports.
How LG&E and KU pay you for excess solar: net billing explained
New Kentucky solar homes are on net billing, not one-to-one net metering. Kentucky Senate Bill 100, passed in 2019, directed the Public Service Commission to set the rate utilities pay for exported solar, replacing the old full-retail credit for new customers (Kentucky SB 100). For LG&E and KU, the PSC did that in its September 24, 2021 order in Case 2020-00349: it set an export credit of 6.924 cents per kWh for LG&E and 7.366 cents per kWh for KU, calculated from each utility’s avoided cost, which is well below the retail price you pay for power (Kentucky PSC press release). Customers who started net metering on or after that date receive dollar-value bill credits at this rate for what they export, rather than a one-to-one kWh swap (LG&E and KU net metering).
Treat the exact rate as a moving number. The 6.924 and 7.366 cent figures are the last export rates the PSC clearly approved, and they are the right ones to plan around today, but LG&E and KU rate cases in 2025 and 2026 have included proposals to change them. Because those are requests rather than final orders, confirm the current export credit with LG&E or KU, or in the PSC docket, before you sign anything. What is not in doubt is the shape of the deal: in Kentucky, an exported kilowatt-hour is worth noticeably less than one you use yourself.
A MySolarFY estimate: what a kWh is worth in LG&E territory
MySolarFY computed estimate (August 2026). A typical 7 kW rooftop system in Louisville produces about 9,404 kWh per year, using NREL PVWatts for ZIP 40202 (PVWatts). At Kentucky’s retail rate of 14.98 cents per kWh (EIA, May 2026), every kWh that system makes is worth about 15 cents when you use it at home. But a kWh you export to LG&E instead is credited at only about 6.924 cents, roughly 46 percent of retail. In plain terms, on LG&E a kilowatt-hour kept and used in your home is worth more than twice one you send back to the grid. That single gap is why a well-sized, high-self-use system beats an oversized one in Kentucky. These are estimates for illustration; your production, usage, and rate will differ. For a full cost breakdown across the state, see our Kentucky solar cost guide.
| Each kWh your panels make | How it is valued | Roughly worth |
|---|---|---|
| Used in your home right away | Avoids buying power at the retail rate | About 14.98 cents (EIA, May 2026) |
| Exported to LG&E | Credited at the PSC export rate | About 6.924 cents (verify current) |
| Exported to KU | Credited at the PSC export rate | About 7.366 cents (verify current) |
To see how using your own solar lowers the bill, read how solar lowers your electricity bill, and to weigh payback with a below-retail export rate in mind, see the financial case for whether solar panels are worth it.
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What legacy net-metering customers keep
If your solar predates the change, your old terms are not the same as a new customer’s. LG&E and KU separate customers by when their net metering began. Homes that started net metering before September 24, 2021 are on the earlier arrangement, where exports are credited as kWh that offset your usage, closer to the old one-to-one idea. Homes that started on or after that date are on the dollar-value export credit described above (LG&E and KU net metering). If you already have solar, your credit terms depend on your start date, and the safest move is to confirm exactly which arrangement your account is on with LG&E or KU rather than assume.
How to connect solar to LG&E or KU in Kentucky
Connecting a home system follows a set order, and the key rule is that you cannot turn the system on until the utility grants Permission to Operate. The general path is:
- Interconnection application. You or your installer file a net-metering interconnection application with LG&E or KU. Most homes qualify for the simplified Level 1 process for inverter-based systems.
- Equipment check. Your inverter must be certified to current standards (UL 1741) and comply with IEEE 1547 for connecting to the grid safely.
- Interconnection agreement. After the utility approves the application, you sign and return the interconnection agreement.
- Install and inspect. The system is installed and passes your local electrical inspection.
- Meter set. The utility installs a bidirectional meter that measures both the power you draw and the power you export.
- Permission to Operate. LG&E or KU issues Permission to Operate. The system may not run on the grid before this.
Net-metered systems in LG&E and KU territory are capped at 45 kW, which is far above a normal home system, so residential rooftops are well within the limit. A licensed installer normally manages this whole process for you. For the questions to ask before you sign, see the right questions to ask a solar installer.
What changed federally, and what it means for Kentucky customers
The federal homeowner credit is gone. The 30% federal Residential Clean Energy Credit (Section 25D) ended for expenditures made after December 31, 2025, under the One Big Beautiful Bill Act, so an LG&E or KU customer who buys solar with cash or a loan in 2026 cannot claim it (IRS OBBB FAQ). With no federal credit and a below-retail export rate, the strongest part of a Kentucky solar case is offsetting the power you would otherwise buy at the retail rate. For the full timeline, see what the federal solar tax credit change means in 2026.
One federal exception exists, and it is not yours to claim. A separate commercial credit, Section 48E, is claimed by the business that owns a leased or PPA system, not by the homeowner. So on a lease or PPA in Kentucky you do not file for a federal credit yourself; the company that owns the panels does, and your benefit is a lower or fixed power price with no up-front cost. The 25D homeowner credit, by contrast, ended for expenditures made after December 31, 2025. Ownership through cash or a loan is what puts the system’s value in your own name. To compare paths, see how solar financing and lease-versus-buy options compare.
How to choose a solar installer in LG&E or KU territory
Kentucky has a smaller solar market than the coasts, so vetting your installer carefully matters. Rather than chasing a “best” list, screen any installer against objective criteria:
- NABCEP certification, the industry’s professional standard for PV installers.
- Proper Kentucky licensing and any required local electrical and building permits.
- A clear workmanship and equipment warranty in writing.
- Real experience with LG&E and KU interconnection, so the application and Permission to Operate go smoothly.
- A written production estimate and a transparent quote that is honest about the below-retail export rate, not one that assumes full-retail net metering. For a checklist, see how to read a solar quote and cost breakdown.
MySolarFY matches you with licensed installers that serve your area so you can compare real local quotes side by side, with no obligation. New to solar? Start with the basics of how home solar works.
Frequently asked questions
How do LG&E and KU pay me for excess solar?
New customers are on net billing, not one-to-one net metering. Under Kentucky Senate Bill 100, the Public Service Commission set a below-retail export credit for the power you send to the grid: about 6.924 cents per kWh for LG&E and 7.366 cents for KU, based on the utility’s avoided cost in the September 24, 2021 order in Case 2020-00349 (Kentucky PSC). Rate cases in 2025 and 2026 have proposed changes, so confirm the current rate with LG&E or KU. Because exports are credited below retail, the biggest value comes from using your own solar as your home makes it.
Does Kentucky still have one-to-one net metering?
Not for new solar customers. Kentucky Senate Bill 100, passed in 2019, ended full-retail net metering for new systems and told the Public Service Commission to set the export rate instead (Kentucky SB 100). For LG&E and KU, that rate is well below the retail price of power. Homes that started net metering before September 24, 2021 are on the earlier kWh-credit arrangement; confirm your status with the utility.
How much is the LG&E and KU solar export credit?
The last export rates the PSC clearly approved are about 6.924 cents per kWh for LG&E and 7.366 cents for KU, set on avoided cost in Case 2020-00349 (PSC order). Kentucky’s retail rate is about 14.98 cents per kWh (EIA, May 2026), so the export credit is roughly half of retail. Treat the exact number as a moving target and verify the current rate, since 2025 to 2026 rate cases have proposed adjustments.
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. An LG&E or KU customer who buys solar in 2026 with cash or a loan cannot claim it (IRS). 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.
How do I connect solar to LG&E or KU?
You or your installer file a net-metering interconnection application with LG&E or KU, using an inverter certified to UL 1741 and compliant with IEEE 1547. The utility reviews and approves the application, you sign an interconnection agreement, the system is installed and passes a local inspection, the utility sets a bidirectional meter, and then it issues Permission to Operate (LG&E and KU net metering). You cannot run the system on the grid until you have that permission. Net-metered systems are capped at 45 kW, well above a typical home.
Is solar still worth it in Kentucky with a below-retail export rate?
It can be, but the math is different from a one-to-one state. Because exports earn only about half of retail, most of the value comes from the solar you use in your home rather than what you export. A system sized to your actual usage, with good daytime self-consumption, offsets power you would otherwise buy at about 14.98 cents per kWh. Get several local quotes and a written production estimate, and make sure they assume the real export rate, not full-retail net metering.
Reviewed by the MySolarFY team. Figures were verified against the linked Kentucky (LG&E and KU, Kentucky Public Service Commission Case 2020-00349, Kentucky General Assembly SB 100), EIA, NREL PVWatts, and IRS sources as of August 2026; the export credit rate is set by the PSC and is under review in current rate cases, so confirm the current rate with LG&E or KU and the Kentucky PSC 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; on a lease or PPA the bill credits and any federal credit go to the company that owns the system, not the homeowner. 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, and rates vary and are not guaranteed. See our full disclaimer.