What Rider NM II changed
Duke Energy Kentucky introduced Rider NM II on January 1, 2025 to comply with an order of the Kentucky Public Service Commission.
Under it, excess generation sent to the grid is credited at an avoided cost rate rather than at the retail rate. The published figure for residential customers is $0.062924 per kWh.
Against a Kentucky residential average around 15 cents per kWh, that is roughly 40 percent of retail. So an exported kilowatt hour is worth substantially less than one your household consumes as it is generated.
That is a smaller reduction than Georgia, Louisiana or Indiana imposed, where exports fell to roughly a quarter of retail or less, but it is a real change from the full retail credit LG&E and Kentucky Utilities customers still receive.
Who was grandfathered, and for how long
Systems that were in service by December 31, 2024 remain on, or are placed on, the previous Net Metering I rider. A system installed before January 2025 is grandfathered onto the original compensation terms for 25 years.
Twenty-five years is close to the working life of a solar system, so for those customers the change is largely academic.
That makes the in-service date a material fact when buying a home in northern Kentucky with an existing array. Ask for it with documentation and confirm the rider with the utility rather than the seller.
Ask also whether the grandfathered status transfers on sale and what is required to effect it. An arrangement that does not survive the transaction is worth nothing to you.
The appeal that is still outstanding
The Kentucky Resources Council filed an appeal against the Commission approval of the NM II tariff in Franklin Circuit Court. That appeal is pending and the outcome is not known.
So the current terms are settled enough to plan around but not permanently fixed. That cuts both ways: they could be revised in favour of solar customers or upheld as they stand.
Ask what your projection assumes about the export rate over its term, and ask for the projection with the export credit varied so you can see how much of the case depends on it.
Ask also what proportion of the projected savings comes from avoided purchases rather than from exports. The avoided purchase portion is unaffected by the outcome of the appeal, so a design weighted toward it is insulated.
Rebuilding the arithmetic on Kentucky terms
The 30 percent federal Residential Clean Energy Credit under Section 25D expired for property placed in service after December 31, 2025, so a cash or loan purchase in Covington receives no federal tax credit, and Kentucky has no state solar tax credit.
Section 48E survives at 30 percent for third-party owners under leases and power purchase agreements, so ask what a provider claims and what reaches you in the rate.
What exists is full retail value for electricity consumed as it is generated, and the NM II avoided cost credit of $0.062924 per kWh for residential exports if your system goes in now.
Ask for the savings split into those two lines with the self-consumption share stated, and for the projection stress-tested with the export credit varied given the pending appeal.