What full retail credit actually means
Under full retail net metering an exported kilowatt hour and a consumed kilowatt hour are worth the same. Whether your household happens to be using power at the moment the panels produce it does not change the value.
That is the arrangement most people assume solar has, and it is the arrangement most of the surrounding region no longer offers. Indiana closed net metering in 2022, Georgia and Tennessee never had it in the usual sense, and Louisiana ended it outside New Orleans in 2020.
Kentucky law requires investor-owned utilities and electric cooperatives, excluding TVA, to offer net metering, with compensation overseen by the Kentucky Public Service Commission and set per utility.
LG&E remains on full retail terms. Senate Bill 100 also raised the eligible system size from 30 kW to 45 kW, which is far above what a residential system needs.
What that simplifies about your design
It removes the self-consumption question that dominates solar advice in most neighbouring states. Because export and consumption are worth the same, when you use power matters much less.
So sizing to your annual consumption is sound here, rather than the tighter daytime-load sizing that Georgia, Indiana or Louisiana require.
It also weakens the economic case for a battery. Storage in a retail-credit state is not rescuing lost export value, so the argument for it is outage resilience rather than arbitrage.
And it means load shifting into daylight, which is free money in an avoided-cost state, buys you very little here. That is worth knowing before an installer suggests changing your household routine.
What still limits the case
The retail rate itself. Kentucky residential electricity averages around 15 cents per kWh, below the national figure near 18.4, so each displaced kilowatt hour is worth less than it would be in New England.
That is why the record here shows a payback in the low teens despite good net metering. Cheap electricity and favourable crediting pull in opposite directions.
With the federal residential credit expired for property placed in service after December 31, 2025, and no Kentucky state solar credit, there is also nothing at tax level to shorten it.
So the diligence belongs on the production estimate and the rate assumption. Ask for the annual figure in kilowatt hours rather than dollars, and check the rate against a recent bill.
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 Louisville 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 net metering under the LG&E arrangement, an eligible system size up to 45 kW under Senate Bill 100, and the electricity you stop buying at around 15 cents per kWh.
Ask any installer to confirm in writing which net metering arrangement your account would be on, since Kentucky terms are set per utility and one large Kentucky utility has already moved away from retail credit.