Kentucky solar math has a rare quality: its hardest number is published. Since SB 100 moved new customers to net billing, the state’s utilities credit exports at commission-set dollar rates, and the current ones are on file to the fifth decimal: 7.089¢ per kWh at LG&E, 7.534¢ at KU. That is roughly half the 14.12¢ retail rate, The offset sits on the other side of the ledger: Kentucky installs solar at $2.63 per watt, the 9th-cheapest in the country. Cheap hardware against half-value exports makes this a state where the math genuinely depends on how you use your power, and for once, every number you need is public.
The Published Rates, On the Record
Utility | Export Credit | Where It Comes From |
|---|---|---|
LG&E | 7.089¢/kWh | Rider NMS-2, Case 2023-00404 (order August 30, 2024); October 2025 stipulation holds these rates until the next base-rate cases |
KU | 7.534¢/kWh | Same rider and case lineage |
Other utilities (Duke KY, Kentucky Power, co-ops) | Each files its own credit | Confirm your utility’s current figure in writing before modeling |
Legacy net metering customers keep their prior terms, and the current rates hold under a stay-out arrangement, which gives Kentucky something few net-billing states offer: rate visibility you can plan against.
Cheap Hardware, Big Systems
Kentucky homes run heavy loads, 1,047 kWh a month, so the typical system is large: 9.09 kW at about $23,900 gross at the $2.63 per watt benchmark (current as of March 1, 2026), producing roughly 12,560 kWh a year in Louisville-class sun. Rank 9 pricing is a genuine advantage, and it sets a hard standard for bids: on a system this size, every 25¢ per watt above benchmark is about $2,270 of premium that the half-value export credit will take years to recover.
Sizes at the benchmark, gross before incentives, with the one Kentucky-specific line worth watching: what half of each system’s output would earn at the LG&E export credit.
System size | Gross cost at $2.63/W | What half its output earns yearly at 7.089¢ |
|---|---|---|
5 kW | $13,150 | About $245 |
7 kW | $18,410 | About $343 |
9.09 kW, the typical Kentucky system | $23,900 | About $445 |
11 kW | $28,930 | About $539 |
13 kW | $34,190 | About $637 |
See both halves of the Kentucky math
The Two Halves of the Kentucky Ledger
Power used as it is produced offsets the retail rate your utility bills, modeled here at the 14.12¢ statewide average; power exported earns the published 7¢-class credit. If everything were self-consumed, the typical system’s 12,560 kWh would be worth about $1,774 a year at the statewide average, a 13.5-year best-case payback. A household exporting half its production lands nearer $1,350 a year and a 17-to-18-year figure. Your split between those halves is the whole decision, and unlike most states, you can compute it precisely: your utility’s credit is a published number, not a floating mystery. Load-shifting into daylight hours and right-sizing against your actual usage move real dollars here, and rates rising 3.44% a year compound quietly in your favor.
Both payback figures run on the statewide average, which is ranking context rather than a billed rate. LG&E and KU each file their own residential rates with the precision this page already applies to their export credits, so rerun the math with the rate on your own bill.
The Constraints Worth Knowing
Residential PPAs are prohibited in Kentucky, which closes the third-party route to the remaining federal 48E credit, and the 25D residential credit is $0 for host-owned systems whose installation is completed after December 31, 2025. Ownership at full sticker is the plan, which is exactly why rank 9 install pricing matters: Kentucky is one of the few net-billing states where the hardware discount is big enough to carry the math without subsidy. Solar work requires licensed contractors here; verify the license and the actual electrician on your job.
Who Should Pass in Kentucky
- 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. The state’s entire advantage is cheap installation; surrender it and Kentucky’s math sags to ordinary.
- Buyers outside LG&E/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.
Kentucky Solar Cost FAQs
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.
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.
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.
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.
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.
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.
Get bids priced on the published rates
Methodology: Cost figures in this guide use the EcoGen Solar Cost Index for Kentucky, $2.63 per watt as of March 1, 2026, with payback modeled with no federal residential credit for host-owned systems, exports at the published Rider NMS-2 rates, rate escalation at the state 5-year average of 3.44%, 0.5% annual panel degradation, and a 25-year horizon.
References & Research Sources
EcoGen America reviewed Kentucky Public Service Commission export-credit orders, the Senate Bill 100 statutory framework, federal electricity price and utility datasets, Census home-value data, federal tax guidance, and state PPA-legality research for this Kentucky solar cost guide. Sources were accessed between June 10 and August 15, 2026, unless another date is listed below.
- Kentucky Public Service Commission (PSC). Order in Case 2023-00404. Rider NMS-2 export credits for LG&E and KU, with the October 2025 stipulation maintaining them. Issued August 30, 2024. Accessed June 11, 2026.
- Kentucky General Assembly. KRS 278.465 to 278.468. Senate Bill 100 of 2019 framework replacing one-to-one netting with Commission-set export credits. Accessed June 11, 2026.
- U.S. Energy Information Administration (EIA). Electric Power Monthly, Table 5.6.A. Average residential electricity prices by state, March 2026 edition. Accessed June 10, 2026.
- U.S. Energy Information Administration (EIA). Form EIA-861: Annual Electric Power Industry Report, 2024. Residential customer counts for KU, LG&E, Duke Energy Kentucky, and Kentucky Power. Accessed June 10, 2026.
- U.S. Census Bureau. American Community Survey, 2024. Median home value data used for cost-to-value context. Accessed June 11, 2026.
- Internal Revenue Service (IRS). One, Big, Beautiful Bill Provisions. Guidance on Public Law 119-21, including termination of the Section 25D residential credit for systems whose installation is completed after December 31, 2025. Accessed August 15, 2026.
- Database of State Incentives for Renewables & Efficiency (DSIRE). Third-Party Solar PV Power Purchase Agreement Policies, May 2026. State-by-state PPA legality map. Published May 2026. Accessed August 15, 2026.
