Is solar worth it in Kentucky?
For a typical Kentucky home in 2026, solar is not worth it: about a 18.7-year payback and $6,295 saved over 25 years after paying for the system. Check your own home, because roofs, usage and utilities vary a lot.
- Payback, typical home
- 18.7 yrs4.9 kW, paying cash
- Electricity price
- 13.9¢per kWh, U.S. 18.0¢
- Solar production
- 1,340kWh per kW per year
- Exports credited at
- ~54%Net billing (reduced export credit)
The numbers for a typical Kentucky home
| Electricity use | 1,103 kWh a month (Kentucky average) |
|---|---|
| Best-value system | 4.9 kW, producing 6,565 kWh a year (50% of use) |
| Price | $15,015 at about $2.85/W |
| First-year savings | $809 |
| Payback | 18.7 years |
| 25-year net | $6,295 (2.7% a year return) |
| Rate increase assumed | 2.5% a year, from Kentucky's 2015–2025 history |
Paying cash, no federal credit, 5% discount rate, microinverters, $25 per kW a year for maintenance and repairs. Methodology.
Why it comes out this way
- Electricity is cheap: 13.9¢ per kWh, 23% below the U.S. average (18.0¢), so each solar kWh saves less.
- Exported solar is typically credited at about 54% of retail, so systems pay best when sized for what you use yourself.
- A typical system here produces about 1,340 kWh per kW per year (ranked #30 of 51).
- There is no federal tax credit for homeowners who buy in 2026, which adds several years to payback compared with 2025.
Net metering and export rules in Kentucky
Net billing (reduced export credit). Kentucky requires net metering for systems up to 45 kW, but since SB 100 (2019) the PSC sets the export credit in each utility's rate case. For the big investor-owned utilities, power you send to the grid earns a bill credit of roughly 7-10 cents/kWh, well below the retail rate.
Dollar-denominated bill credit per kWh exported (NMS-2 style), set by the PSC per utility. LG&E $0.07089/kWh and KU $0.07534/kWh (PSC orders Feb 16, 2026, corrected Mar 4, 2026; rates kept at prior level despite KU proposal to cut ~50%). Kentucky Power ~9.7 cents (2021 order; verify current).
- Netting: varies
- Unused credits: Excess dollar credits carry forward to future bills; not paid out in cash and generally forfeited on account closure.
- System size limit: 45 kW
- Fixed charges: Standard residential customer charges apply (LG&E/KU basic service charge raised in 2025-26 rate cases, roughly $20/month; verify). No solar-specific fee for NMS-2 at IOUs known.
- Last major change: SB 100 (2019) ended retail-rate net metering for new systems; LG&E/KU NMS-2 rates set Sept 2021; 2025-26 rate cases (2025-00113/00114) held NMS-2 rates flat (Feb 2026).
- Pending: Co-op (East Kentucky Power members) net metering rates being revised utility by utility; Duke Energy Kentucky NM-II credit being recalculated after June 1, 2026 PSC order (Case 2025-00258). Kentucky Power export rate not re-verified since 2021.
Read net metering explained to see why export rules can swing payback by years.
| Utility | Export credit | Notes |
|---|---|---|
| Louisville Gas & Electric (LG&E) | 7.089¢/kWh | NMS-2 export credit $0.07089/kWh per March 4, 2026 corrected order in Case 2025-00114. Grandfathered NMS-1 customers (pre-2021) keep 1:1 for 25 years. |
| Kentucky Utilities (KU) | 7.534¢/kWh | NMS-2 export credit $0.07534/kWh per March 4, 2026 corrected order in Case 2025-00113. |
| Duke Energy Kentucky | 6.3¢/kWh | Rider NM-II Avoided Cost Excess Generation Credit: residential $0.062924/kWh before the June 1, 2026 order (Case 2025-00258), which denied Duke's proposed $0.065427, adopted a single residential/non-residential value and ordered recalculation; final new value pending compliance filing. To be updated every 2 years from 2028. |
| Kentucky Power (AEP) | 9.746¢/kWh | 2021 PSC order set export credit at 9.746 cents/kWh; may have been revised in later rate case - verify tariff. |
Solar incentives in Kentucky
The federal 30% Residential Clean Energy Credit ended for systems installed after December 31, 2025. What that means.
We didn't find active statewide solar incentives in Kentucky. Check with your utility for local rebates.
Ended programs: No state solar tax credit or rebate.
What solar costs in Kentucky
A fair cash price is around $2.85 per watt before incentives. For the 4.9 kW system that fits a typical home, expect roughly $11,900 to $16,800; smaller systems cost more per watt.
How many homes have solar
- Homes with net-metered solar (2025)
- 10,993
- Share of homes
- 0.5%
- Residential solar capacity
- 90 MW
- Growth over the past year
- +7.5%
Sources: EIA-861 (2025), EIA small-scale solar estimates, LBNL Tracking the Sun and state interconnection data.
Electric utilities in Kentucky
| Utility | Homes served | Price (2026 est.) | Typical use | Typical-home verdict |
|---|---|---|---|---|
| Kentucky Utilities (KU) | 454,021 | 12.8¢ | 1,168 kWh/mo | Not worth it |
| LG&E | 388,146 | 13.2¢ | 937 kWh/mo | Not worth it |
| Duke Energy Kentucky | 140,950 | 14.7¢ | 926 kWh/mo | Not worth it |
| Kentucky Power | 130,322 | 16.9¢ | 1,235 kWh/mo | Close call |
| South Kentucky Rural E C C | 65,346 | 14.4¢ | 1,058 kWh/mo | Not worth it |
| Owen Electric Cooperative | 65,069 | 13.4¢ | 1,149 kWh/mo | Not worth it |
| Blue Grass Energy Cooperative | 61,870 | 13.4¢ | 1,244 kWh/mo | Not worth it |
| Warren Rural Electric Cooperative | 61,500 | 13.4¢ | 1,319 kWh/mo | Not worth it |
| Salt River Electric Cooperative | 54,002 | 11.6¢ | 1,258 kWh/mo | Not worth it |
| Jackson Energy Cooperative | 49,590 | 15.7¢ | 1,184 kWh/mo | Not worth it |
| Kenergy | 47,514 | 17.3¢ | 1,229 kWh/mo | Close call |
| Pennyrile Rural Electric Cooperative | 40,704 | 14.7¢ | 1,243 kWh/mo | Not worth it |
| Nolin Rural Electric Cooperative | 36,631 | 13.6¢ | 1,151 kWh/mo | Not worth it |
| West Kentucky Rural E C C | 32,248 | 15.0¢ | 1,210 kWh/mo | Not worth it |
| Meade County Rural E C C | 29,572 | 16.2¢ | 1,034 kWh/mo | Not worth it |
| City of Bowling Green | 27,433 | 12.9¢ | 905 kWh/mo | Not worth it |
| Inter County Energy Cooperative | 26,993 | 14.5¢ | 1,156 kWh/mo | Not worth it |
| Clark Energy Cooperative | 26,315 | 14.1¢ | 1,120 kWh/mo | Not worth it |
| Farmers Rural Electric Cooperative | 25,109 | 13.8¢ | 1,095 kWh/mo | Not worth it |
| Taylor County Rural E C C | 24,888 | 14.2¢ | 1,074 kWh/mo | Not worth it |
| Jackson Purchase Energy Corporation | 23,989 | 18.7¢ | 1,214 kWh/mo | Close call |
| Fleming-Mason Energy Cooperative | 23,845 | 13.8¢ | 1,079 kWh/mo | Not worth it |
| City of Owensboro | 23,316 | 14.2¢ | 800 kWh/mo | Not worth it |
| Cumberland Valley Electric | 22,506 | 13.9¢ | 1,128 kWh/mo | Not worth it |
| Tri-County Electric Member Corp (TN) | 20,632 | 13.3¢ | 1,254 kWh/mo | Not worth it |
Solar by city in Kentucky
- Louisville20.5-yr payback · Not worth it
- Lexington20-yr payback · Not worth it
- Bowling Green20.8-yr payback · Not worth it
- Owensboro19.5-yr payback · Not worth it
- Covington19.3-yr payback · Not worth it
- Georgetown20.5-yr payback · Not worth it
- Richmond20.2-yr payback · Not worth it
- Florence19.2-yr payback · Not worth it
- Elizabethtown18.9-yr payback · Not worth it
- Nicholasville20-yr payback · Not worth it
- Hopkinsville18.5-yr payback · Not worth it
- Independence19.1-yr payback · Not worth it
- Jeffersontown20.6-yr payback · Not worth it
- Frankfort22.2-yr payback · Not worth it
- Henderson22.1-yr payback · Not worth it
- Paducah16.4-yr payback · Not worth it
Protect yourself when buying
- Check the license. No state general contractor license; electrical work on PV requires a Kentucky electrical contractor license (Dept. of Housing, Buildings & Construction). Local permits required. Look up an installer
- Cancellation rights. Federal law gives you 3 business days to cancel most door-to-door sales over $25. How to cancel
- HOA and solar access. No statewide law preventing HOAs from banning solar; solar easements are allowed by statute (KRS 381.200).
- Community solar. No statewide community solar program; a few utility/co-op voluntary programs (e.g., LG&E/KU Solar Share, EKPC Cooperative Solar).
Questions about solar in Kentucky
Is solar worth it in Kentucky in 2026?
For a typical Kentucky home, solar is not worth it. A 4.9 kW system costing about $15,015 after state incentives saves about $809 in the first year and pays back in about 18.7 years. Your result depends on your roof, usage, utility and price, so run the calculator for your address.
How much do solar panels cost in Kentucky?
A reasonable cash price is around $2.85 per watt before incentives, or roughly $11,900 to $16,800 for a 4.9 kW system.
Does Kentucky have net metering?
Kentucky requires net metering for systems up to 45 kW, but since SB 100 (2019) the PSC sets the export credit in each utility's rate case. For the big investor-owned utilities, power you send to the grid earns a bill credit of roughly 7-10 cents/kWh, well below the retail rate.
Is there a solar tax credit in Kentucky?
The 30% federal credit for homeowners ended for systems installed after 2025. Kentucky does not offer a state income tax credit for solar that we're aware of.
How do I check a solar installer's license in Kentucky?
No state general contractor license; electrical work on PV requires a Kentucky electrical contractor license (Dept. of Housing, Buildings & Construction). Local permits required.. Look up any installer with the state's license search at https://dhbc.ky.gov/.
Policy research current as of October 2026; sources include psc.ky.gov, psc.ky.gov, psc.ky.gov. Electricity data: EIA, through July 2026. Found something out of date? Tell us.