Rebates and incentives, Kentucky
No state tax credit. Your real number depends almost entirely on which utility serves your home, since net metering terms vary sharply across Kentucky.
How it works
Step 1
This is the single most important step in Kentucky. LG&E, KU, Duke Energy Kentucky, and TVA-served co-ops all treat exported solar completely differently.
Step 2
With the federal ownership credit gone for 2026, leasing or a PPA may be worth a closer look. Compare paths using the federal ITC calculator and the rebate plus ITC combined calculator.
Step 3
Given Kentucky's below-national-average electricity rates and utility-dependent export credit, sizing closer to your actual usage tends to produce better payback than maximizing production for export.
Kentucky does not offer a state income tax credit, and multiple sources describe the state as generally not providing broad statewide rebates or exemptions for residential solar the way some neighboring states do. That leaves your federal eligibility and your specific utility's net metering terms as the two factors that actually determine your project's financial return. Check the federal ITC calculator for your exact 2026 status.
LG&E and Kentucky Utilities both still credit exported solar at the full retail rate, described by multiple sources as the best possible outcome for solar owners in the state. Duke Energy Kentucky moved away from that structure in January 2025 under its Rider Net Metering II tariff, following Kentucky Public Service Commission Case No. 2023-00413, shifting new customers to a lower avoided-cost rate. If you installed with Duke Energy Kentucky before that January 2025 change, you're grandfathered onto the old full-retail Net Metering I rate for 25 years from the tariff's effective date. Kentucky Power runs its own separate reduced export rate as well, commonly cited around 9 cents per kWh. Customers served by the Tennessee Valley Authority, often through a local rural electric cooperative, fall entirely outside Kentucky's state net metering mandate and should check their specific co-op's terms directly rather than assuming any state-guaranteed rate applies. Compare against the Tennessee incentive estimator for the TVA picture in a neighboring state.
Per the actual text of Senate Bill 100, the eligible system size for net metering was raised from 30 kW to 45 kW starting January 1, 2020, with the Kentucky Public Service Commission overseeing the resulting compensation structure for each utility. For a typical residential installation, this cap is far above what's needed, so it's more relevant to larger commercial-adjacent projects than a standard home system. Use the rebate plus ITC combined calculator to model your total project economics.
Kentucky homeowners pay roughly 10.6 cents per kWh on average, about 20% below the national average according to EIA data. That means each kilowatt-hour your system produces offsets a smaller dollar amount on your bill than the same production would in a higher-cost state, which slows payback independent of any net metering differences. This makes getting your specific utility's export rate right even more consequential in Kentucky, since a below-retail credit compounds against an already lower baseline rate.
With your rebate total in hand, the combined loan and rebate timing tool shows the monthly payment on the amount you still need to borrow.
Questions
No. Kentucky does not currently offer a statewide income tax credit or rebate program for residential solar. The primary financial drivers in Kentucky are your federal eligibility and, most significantly, which utility serves your home and its specific net metering terms.
No, and the differences are substantial. LG&E and Kentucky Utilities both still offer full retail net metering, crediting exported power at the same rate you're charged. Duke Energy Kentucky moved to a lower avoided-cost rate under its Net Metering II tariff starting January 2025, a meaningfully worse deal, though anyone who installed before that date is grandfathered onto the old full-retail rate for 25 years. Kentucky Power also runs its own separate reduced rate, commonly cited around 9 cents per kWh. Customers served by the Tennessee Valley Authority, often through a local co-op, aren't covered by Kentucky's net metering mandate at all.
Up to 45 kW as of Senate Bill 100, effective January 1, 2020, an increase from the previous 30 kW cap. This is well beyond what a typical home needs, so system size limits are rarely the binding constraint for residential installations in Kentucky.
Kentucky homeowners pay roughly 10.6 cents per kWh on average, about 20% below the national average. Lower electricity costs mean each kilowatt-hour of solar production offsets less on your bill, which slows payback compared to a higher-cost state even before factoring in net metering differences. This makes getting your specific utility's terms right even more important in Kentucky than in a high-rate state.