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Solar incentives · Kentucky · 2026
Solar rebates in Kentucky.
The federal, state, and utility solar incentives available in Kentucky for 2026, then matched to a vetted local installer.
Programs · Kentucky
7
active programs & rules in 2026
Full retail at LG&E and KU; avoided cost at Duke Kentucky · verified 2026-09-01
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The full list
7 programs available right now in Kentucky.
Tax credit
#01
Federal Residential Clean Energy Credit (Section 25D) - ENDED
The 30 percent federal Residential Clean Energy Credit under Section 25D expired for property placed in service after December 31, 2025. Cash and loan purchases made now receive no federal tax credit, and Kentucky has no state solar tax credit to fall back on.
Source ↗ Tax credit
#02
Federal Commercial ITC (Section 48E) - via Lease / PPA
Section 48E, the commercial Clean Electricity Investment Credit, survives at 30 percent and is available to third-party owners of residential systems under leases and power purchase agreements. The provider claims it and may reflect part of the value in the rate offered. Ask what they claim and what actually reaches you, and confirm with a tax advisor.
Source ↗ Net metering
#03
Net metering required of IOUs and co-ops, excluding TVA
Kentucky law requires investor-owned utilities and electric cooperatives to offer net metering to customers with qualifying solar systems, and Senate Bill 100 raised the eligible system size from 30 kW to 45 kW. TVA is excluded, which matters because TVA supplies much of western Kentucky through local power companies. Compensation rates are overseen by the Kentucky Public Service Commission and are set per utility rather than statewide, so the terms depend on who bills you.
Utility
#04
LG&E and Kentucky Utilities - full retail net metering
LG&E and Kentucky Utilities customers receive full retail net metering, meaning excess electricity sent to the grid is credited at the same rate the customer pays for electricity. That is now rare: Georgia, Utah, Indiana, Louisiana and Tennessee have all moved away from it. It is the single most valuable feature of solar in these service territories and it should be reflected accurately in any quote.
Utility
#05
Duke Energy Kentucky Rider NM II - avoided cost from January 1, 2025
Duke Energy Kentucky introduced Rider NM II on January 1, 2025 to comply with a Kentucky Public Service Commission order. Under it, excess generation is credited at an avoided cost rate rather than the retail rate, published at $0.062924 per kWh for residential customers. Systems in service by December 31, 2024 remain on the previous Net Metering I rider, grandfathered for 25 years. The Kentucky Resources Council has appealed the Commission approval of NM II to Franklin Circuit Court and that appeal is pending, so the position may change.
Program
#06
TVA local power companies sit outside the state requirement
The Kentucky net metering requirement excludes TVA. Much of western Kentucky is served by municipal utilities and cooperatives that distribute TVA power, and those set their own arrangements for customer generation rather than offering net metering under state law. TVA compensates residential exports at avoided cost through its Dispersed Power Production programme, well below retail. Check the utility name on a recent bill before applying any Kentucky net metering figure to your address.
Program
#07
No Kentucky state solar tax credit
Kentucky does not offer a state income tax credit for residential solar. With the federal residential credit expired for property placed in service after December 31, 2025, a cash or loan purchase now receives no tax credit at either level. Ask your county property valuation administrator how residential solar is treated for assessment at your address, since that is administered locally.
Net metering · Kentucky
Full retail at LG&E and KU; avoided cost at Duke Kentucky
Kentucky law requires investor-owned utilities and electric cooperatives, excluding TVA, to offer net metering to customers with qualifying solar systems, and Senate Bill 100 raised the eligible system size from 30 kW to 45 kW. Compensation is overseen by the Kentucky Public Service Commission and set per utility, which has produced a genuinely split market. LG&E and Kentucky Utilities customers still receive full retail net metering, with exported electricity credited at the same rate they pay for it. That is now unusual: most neighbouring states have moved away from retail-rate credit in the last few years, and it is the single most valuable feature of solar in those territories. Duke Energy Kentucky moved in the other direction, introducing Rider NM II on January 1, 2025 to comply with a Commission order. Under NM II excess generation is credited at an avoided cost rate published at $0.062924 per kWh for residential customers, against a Kentucky residential average around 15 cents per kWh, so roughly 40 percent of retail. Systems in service by December 31, 2024 were grandfathered onto the previous Net Metering I rider for 25 years. An appeal against the Commission approval of NM II is pending in Franklin Circuit Court, so the position is not finally settled. Separately, TVA supplies much of western Kentucky through local power companies and municipal utilities, which sit outside the state requirement entirely and compensate exports at TVA avoided cost. The practical result is that the first question about any Kentucky solar quote is which utility bills the address.
Worth checking before you sign:
taking a rebate can change your net-metering terms, and export credit rules
differ by utility. Your matched installer confirms the exact numbers for
your address.
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