The main thing a solar lease sells is certainty: a set monthly payment instead of a bill that moves. That certainty is thinner than the pitch, because most lease and PPA contracts carry an annual escalator that raises the payment 1 to 3% every year, making the number on page one the lowest payment you will ever make. Kentucky homeowners already have something closer to real certainty, and they did not have to sign anything for it. In February the Public Service Commission approved a settlement holding the two largest utilities to their current base rates, and their solar export credits, until August 1, 2028. No leasing company operates here, and the product they would be selling is largely already in place.
No Provider, and Less Need for One
Free solar means a lease or a power purchase agreement, under which a company owns the system on your roof. Residential solar power purchase agreements are prohibited in Kentucky, so the absence of providers is a matter of law, not a gap in the market. Per the Database of State Incentives for Renewables and Efficiency, Kentucky is among the 17 states with no current residential third-party ownership offerings. Kentucky still reached 81.3 MW of rooftop solar and grew 17.1% in a year, all of it bought.
Curious how $0-down offers work outside Kentucky? See our free solar programs nationwide.
What makes Kentucky unusual among those 17 is the settlement approved on February 16, 2026 in Cases 2025-00113 and 2025-00114. Three commitments in it matter to a household deciding this year.
- A base-rate stay-out until August 1, 2028. Changes to approved base rates cannot take effect before that date.
- Export rates stay where they are. The NMS-2 credit for exported power is not moving as part of this settlement.
- The program stays open to new customers until at least the effective date of new rates from the next base rate case.
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What Certainty Is Actually Worth
It is worth being precise about what that settlement does and does not give you, because “rates are locked” is the kind of phrase a salesperson will stretch.
It is a commitment with a date on it, not a promise about 2029. What it means practically is that a Kentucky household can model the next two years against numbers that are not going to move underneath them, which is more than homeowners in Utah, Nevada or Vermont can say right now. It does not mean rates will never rise again.
The underlying numbers are ordinary. Senate Bill 100 replaced one-for-one kilowatt-hour netting with dollar credits set by the Commission, so exports earn 7.089¢ on Louisville Gas and Electric and 7.534¢ on Kentucky Utilities, Commission-set in the order dated August 30, 2024, and 9.746¢ on Kentucky Power effective March 1, 2026, against a retail rate near the 14.12¢ statewide average. Those rates hold until each utility’s next base rate case.
Roughly half of retail on exports means the system to build here is one matched to your own daytime use, not one designed to sell power. That conclusion holds whichever way you would have paid for it.
Buying Now Carries No Credit at All
Section 25D is $0 for purchased systems whose installation is completed after December 31, 2025 under Public Law 119-21. Section 48E survives but is a commercial credit, claimed by a business that owns the system, which reaches households only through the lease and power purchase arrangements Kentucky does not have providers for.
Kentucky has no state income tax credit for solar, no rebate, and no market in renewable energy certificates. Set out plainly, a Kentucky household buying panels in 2026 receives no cash incentive from any level of government. What it receives instead is an export rate around half of retail and a written commitment that it will not move before August 2028.
Section 48E also carries a construction-start test tied to July 4, 2026 and a shorter deadline to be switched on for projects that missed it. Confirm the current 48E deadline before signing anything that depends on it.
The Class of 2021 Holds Something Better
One date separates Kentucky’s two net metering tariffs. Customers who began net metering service before September 24, 2021 are on NMS-1 and receive credits in kilowatt-hours rather than dollars, the old one-for-one arrangement, and that runs for 25 years from their start.
If you are buying a house in Kentucky with panels already on it, when net metering service began is the single most valuable thing to establish, and it should come from the interconnection agreement rather than the seller’s memory. A house on NMS-1 carries an asset that runs into the 2040s and cannot be bought today at any price.
You Likely Will Not Qualify If
- You are answering a national free solar advertisement. Residential PPAs are prohibited in Kentucky, and the state is among the 17 with no current residential third-party ownership providers.
- You are counting on the 30% federal credit. Section 25D is $0 for purchased systems from January 1, 2026, and Section 48E is claimed by a business owner rather than by you.
- You are expecting a Kentucky state credit or rebate. There is neither, and no certificate market either.
- You hoped to join NMS-1. It closed to new customers on September 24, 2021 and cannot be reopened.
- Your power comes from a rural electric cooperative. The settlement described here binds Louisville Gas and Electric and Kentucky Utilities, not the whole state.
Using the Window Rather Than Waiting
Kentucky’s position is unusual and worth using deliberately. Almost every other state asks a homeowner to decide under rules that could change during the sales process. Kentucky is asking you to decide under rules with a stated expiry date, which makes it possible to compare quotes against numbers that will still be true when the panels are switched on.
Given no company will finance it for you, the practical question is whether purchase or a loan you hold yourself works at Kentucky prices with an export rate near half of retail. That is a real question with a real answer, and it is one you can actually model here. Our Kentucky incentives guide covers the settlement and the tariffs, and the Kentucky installer list covers who does the work.
Kentucky Solar FAQs
No company currently offers them, and the PPA version is prohibited by Kentucky law outright. Free solar means a lease or a power purchase agreement where a company owns the system, and Kentucky is among the 17 states with no current residential third-party ownership providers. Kentucky still reached 81.3 MW of rooftop solar and grew 17.1% in a year, all of it purchased rather than leased.
For the two largest utilities, until August 1, 2028. The Public Service Commission approved a settlement on February 16, 2026 in Cases 2025-00113 and 2025-00114 under which Louisville Gas and Electric and Kentucky Utilities committed to a base-rate stay-out to that date, agreed to leave NMS-2 export rates where they are, and agreed not to close the program to new participants before new rates from their next rate case. It is a dated commitment, not a promise about 2029.
Dollar credits set by the Commission rather than one-for-one kilowatt-hours, following Senate Bill 100. Exports earn 7.089¢ on Louisville Gas and Electric and 7.534¢ on Kentucky Utilities, Commission-set in the order dated August 30, 2024, and 9.746¢ on Kentucky Power effective March 1, 2026, against a retail rate near the 14.12¢ statewide average. Those rates hold until each utility’s next base rate case.
No. Kentucky has no state income tax credit, no rebate and no certificate market, and Section 25D is $0 for purchased systems whose installation is completed on or after January 1, 2026. Section 48E survives but is claimed by a business that owns the system, which requires a lease or power purchase agreement Kentucky has no providers for. What the state offers instead is rate stability with a date on it.
When net metering service began, taken from the interconnection agreement rather than the seller’s description. Systems that started before September 24, 2021 are on NMS-1 and receive credits in kilowatt-hours one for one, for 25 years from their start date. That runs into the 2040s and is worth substantially more than the dollar credits a new system receives.
Two years of known terms is worth using. Enter your ZIP code to see what Kentucky installers are quoting.
Model against rates that will not move
References & Research Sources
The legality, rates and market figures above come from the records below. The switch-on deadline for 48E projects that began construction after July 4, 2026 is still unsettled; require any provider to state a project’s deadline in writing. Capacity figures are 2024 data. Sources accessed between June 10 and August 17, 2026.
- pv magazine USA. States without residential solar third-party ownership may become holes in the market after 2025. Analysis drawing on DSIRE and US Energy Information Administration data: the 17-state count including Kentucky, and Kentucky’s 81.3 MW installed residential base at the end of 2024 with 17.1% twelve-month growth. Dated July 22, 2025. Accessed August 17, 2026.
- Kentucky Public Service Commission. Order approving the LG&E and KU rate case settlement, February 16, 2026 (Case Nos. 2025-00113 and 2025-00114). The Commission-set net metering export credits behind this page: LG&E $0.07089 and KU $0.07534 per kWh from the order dated August 30, 2024, held until the next base rate cases, and Kentucky Power $0.09746 effective March 1, 2026. Accessed August 17, 2026.
- Louisville Gas and Electric and Kentucky Utilities. Net metering documentation. Rider NMS-2 mechanics, the dollar-credit structure that replaced one-for-one netting under Senate Bill 100, and interconnection steps. Accessed August 17, 2026.
- US Energy Information Administration. Electric Power Monthly, Table 5.6.A: Average Price of Electricity to Ultimate Customers. The Kentucky statewide average residential rate of 14.12¢ per kWh used on this page as labeled context. Accessed August 17, 2026.
- Internal Revenue Service. One, Big, Beautiful Bill provisions. The Public Law 119-21 termination of Section 25D for purchased systems whose installation is completed after December 31, 2025, and the availability of Section 48E to business owners of residential systems, including its construction-start test tied to July 4, 2026. Accessed August 17, 2026.
