Solar in Kentucky costs about $2.65 per watt, the 7th lowest of 51, so the typical 7.77 kW system runs about $20,591 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 13.92¢ 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 againstThe Kentucky PSC kept the LG&E and KU export credits in its February 16, 2026 rate orders, and new base rates cannot start before August 1, 2028. 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. 13.92¢ 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.
How daytime use sets the Kentucky payback
The typical 7.77 kW system makes about 10,738 kWh a year in Kentucky sun. What that power is worth depends on where it goes.
If all of it replaced power at the 13.92¢ state average, it would be worth about $1,495 a year. Exporting a large share lowers that, because exports earn about half the 13.92¢ you pay. Our Kentucky worth-it guide gives simple payback before incentives by utility: about 18.5 years statewide and 19.5 years at Kentucky Utilities, the largest utility.
13.92¢ is not your rateThat year-one value uses 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 $2.65 a watt buys in Kentucky, 5 kW to 13 kW
The typical Kentucky system is 7.77 kW, the median size homeowners there installed in 2025 (Berkeley Lab, 398 systems). 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 $2.65 per watt. Real quotes vary by roof, equipment and installer.
Hold bids to the benchmarkOn a 7.77 kW system, every 25¢ per watt above $2.65 is about $1,940 of premium. The half-value export credit takes years to earn that back.
No PPA 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 by years.
- Anyone quoted far above $2.65 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. Payback takes many years, even for homes that use most of their solar power.
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 $2.65 per watt installed, the 7th lowest of 51 in the EcoGen Solar Cost Index (September 2026 Edition). The typical system, the median size Kentucky homeowners installed in 2025, is 7.77 kW, about $20,600 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?
Simple payback before incentives is about 18.5 years statewide and 19.5 years at Kentucky Utilities, the largest utility, in our per-utility figures of October 19, 2026. The four large utilities run 15.2 to 19.5 years. Power you use at home as it is made saves your utility’s price per kWh, while exports earn the published 7¢-class credits, so your utility, your home-use share and your quote price set your own number. Our Kentucky worth-it guide shows the math by utility.
Can I lease solar panels in Kentucky?
Third-party PPAs are not allowed in Kentucky. With the federal residential credit at $0 for host-owned systems whose installation is completed after December 31, 2025, buying the system is the standard path. If an installer offers a lease, ask in writing how it qualifies for your utility’s net metering. Kentucky’s low install pricing, 7th lowest of 51, is what keeps that math workable.
Will Kentucky’s export rates change?
The current NMS-2 rates stayed in the PSC’s February 16, 2026 rate orders, and new base rates cannot start before August 1, 2028, 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 (September 2026 Edition), $2.65 per watt as of September 25, 2026, 7th lowest of 51. The 7.77 kW typical size is Berkeley Lab’s 2025 median for Kentucky single-family installs (398 systems). Paybacks are simple payback before incentives from our per-utility figures of October 19, 2026: 18.5 years statewide and 19.5 years at Kentucky Utilities. The year-one value counts every kWh at the 13.92¢ state average, with no federal residential credit. The Kentucky worth-it guide shows the utility examples. 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, residential price by state, 12-month average August 2025 to July 2026: 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
