Solar in Kentucky costs about $2.63 per watt, the 9th-cheapest in the country, so the typical 9.09 kW system runs about $23,907 before incentives. The catch is on the other side of the meter: power you export earns a published 7.089¢ at LG&E or 7.534¢ at KU, roughly half the 14.12¢ retail rate.
See both halves of the Kentucky math
What you use at home saves about 14¢. What you export earns about 7¢. Your ZIP code shows local prices and installers.
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7.089¢ at LG&E, 7.534¢ at KU: Kentucky’s export credits, on file
Since SB 100, new Kentucky customers are on net billing. You buy power at retail. Exports earn a dollar rate the Public Service Commission sets, and the current rates are public.
What an exported kilowatt-hour earns in Kentucky
Outside LG&E and KU, get your utility’s current credit in writing before you model anything.
Rates you can plan againstAn October 2025 stipulation holds the LG&E and KU rates until the next base-rate cases. Legacy net metering customers keep their prior terms. Few net-billing states give this much visibility.
They can still changeRates can move after those base-rate cases. If you connect under current terms, get your treatment confirmed in writing.
Used at home or sent out: the two prices on a Kentucky meter
Your split between these two halves is the whole decision. Because the credit is published, you can work it out exactly.
Power you use as it is made
It offsets the retail rate your utility bills. 14.12¢ is the statewide average used on this page.
Power you export
The published LG&E and KU credits. That is roughly half the retail rate.
Move use into daylightLoad-shifting into daylight hours and sizing to your real usage move real dollars here. Rates rising 3.44% a year work in your favor too.
13.5 years or 17 to 18: how daytime use sets the Kentucky payback
The typical 9.09 kW system makes about 12,560 kWh a year in Louisville-class sun. What that power is worth depends on where it goes.
14.12¢ is not your rateBoth paybacks use the statewide average, which is ranking context, not a billed rate. LG&E and KU each file their own residential rates, so rerun the math with the rate on your own bill.
What $2.63 a watt buys in Kentucky, 5 kW to 13 kW
Kentucky homes use a lot of power, 1,047 kWh a month, so systems run large. Each size below is gross cost at the benchmark, with what half its output would earn in a year at the LG&E credit. For context, see solar costs in all 50 states.
Gross cost before incentives at $2.63 per watt. Real quotes vary by roof, equipment and installer.
Hold bids to the benchmarkOn a 9.09 kW system, every 25¢ per watt above $2.63 is about $2,270 of premium. The half-value export credit takes years to earn that back.
No lease route, no federal credit: Kentucky buyers own at full price
That is exactly why the low install price matters. Kentucky is one of the few net-billing states where the hardware discount is big enough to carry the math without a subsidy.
That closes the third-party route to the remaining federal 48E credit.
DSIRE, May 2026For host-owned systems whose installation is completed after December 31, 2025 (Public Law 119-21).
IRSSolar work requires licensed contractors in Kentucky. Verify the license and the actual electrician on your job.
When the seven-cent credit works against a Kentucky buyer
Kentucky’s advantage is cheap installation. These buyers lose it:
- Daytime-empty homes with no shiftable load. At a published 7¢-class export rate, an export-heavy profile stretches payback toward two decades.
- Anyone quoted far above $2.63 per watt. Surrender the cheap install price and Kentucky’s math sags to ordinary.
- Buyers outside LG&E and KU who skipped the homework. Duke Kentucky, Kentucky Power and the co-ops file their own credits. Model with your number, not Louisville’s.
- Short-stay owners. Even the best case runs 13.5 years.
Get bids priced on the published rates
Your utility’s published credit and your daytime usage make this a solvable equation. Enter your ZIP code and we will solve it for your address.
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Beyond the Kentucky numbers
Frequently asked questions
How much do solar panels cost in Kentucky in 2026?
About $2.63 per watt installed, the 9th-cheapest in the country as of March 1, 2026. Because Kentucky homes use a lot of power, the typical system is large at 9.09 kW, about $23,900 before incentives.
Does Kentucky have net metering?
New customers are on net billing under SB 100: imports at retail, exports at commission-set rates, currently 7.089¢ per kWh at LG&E and 7.534¢ at KU under Rider NMS-2. Legacy net metering customers keep their prior terms.
What is the solar payback period in Kentucky?
About 13.5 years best case with all production self-consumed at the statewide average, stretching toward 17 to 18 years for households exporting half their output at the published 7¢-class credits. Self-use share is the deciding variable, and Kentucky’s published rates let you compute yours exactly.
Can I lease solar panels in Kentucky?
Third-party PPAs are prohibited in Kentucky, and with the federal residential credit at $0 for host-owned systems whose installation is completed after December 31, 2025, ownership at full price is the standard path. Kentucky’s 9th-cheapest install pricing is what keeps that math workable.
Will Kentucky’s export rates change?
The current NMS-2 rates hold under an October 2025 stipulation until the utilities’ next base-rate cases, which gives unusual planning visibility. Rates can change after those cases, so systems interconnected under current terms should get their treatment confirmed in writing.
How we calculate these costs
Cost figures use Kentucky’s entry in the EcoGen Solar Cost Index (v2 method), $2.63 per watt as of March 1, 2026. Payback assumes no federal residential credit for host-owned systems, exports at the published Rider NMS-2 rates, 3.44% yearly rate growth (the state 5-year average), 0.5% yearly panel degradation and a 25-year horizon. Sources were accessed between June 10 and August 15, 2026.
Sources (7)
- Kentucky Public Service Commission, Order in Case 2023-00404 (Rider NMS-2, August 30, 2024): psc.ky.gov
- Kentucky General Assembly, KRS 278.465 to 278.468 (Senate Bill 100 of 2019): legislature.ky.gov
- EIA, Electric Power Monthly, Table 5.6.A (March 2026 edition): eia.gov
- EIA, Form EIA-861 Annual Electric Power Industry Report, 2024: eia.gov
- U.S. Census Bureau, American Community Survey, 2024: census.gov
- IRS, One, Big, Beautiful Bill Provisions (Public Law 119-21): irs.gov
- DSIRE, Third-Party Solar PV Power Purchase Agreement Policies (May 2026): ncsolarcen-prod.s3.amazonaws.com
