Layton Smith Sr. is an IRS Enrolled Agent and general partner at HofflerSmith Financial in Cherry Hill, New Jersey, with 27 years of tax practice. He has overseen thousands of solar and clean energy tax credits, rebates, and their implications for his clients.
Most states leave system sizing to you and your installer. Kansas does not. State rules hand you an arithmetic formula, run it against your last 12 months of electricity use, and produce the size you are allowed to build. There is no state income tax credit to weigh against it and no bonus for going bigger. Kansas solar policy is a set of ceilings, and the useful thing a homeowner can do here is learn where each one sits.
The whole Kansas stack for 2026, at a glance:
Program | What it pays or is worth | Status in 2026 |
|---|---|---|
Federal 25D credit | $0 | Ended for systems you buy and own whose installation is completed after December 31, 2025 |
Kansas state income tax credit | None | No program exists or is pending |
Property tax exemption | System value exempt for 10 taxable years | Active for post-2016 applications; batteries excluded per September 17, 2024 guidance |
Net metering (investor-owned utilities) | Monthly 1:1 netting at retail; surplus at the monthly system average cost | Active, capped and first-come, first-served |
Sizing rule | Formula-based, 150 kW AC ceiling | 50% export capacity rule applies from July 1, 2026 |
Kansas Decides How Big Your System May Be
House Bill 2527, passed in 2024, rewrote how Kansas sizes rooftop systems. It removed the old 15 kW residential ceiling and replaced it with a single 150 kW AC limit for everyone, which sounds generous until you read the sizing rule that sits underneath it. Customers are required to size export capacity to expected load using a set calculation, not to whatever fits on the roof.
To weigh Kansas against the country as a whole, start with our nationwide solar incentive overview.
A second rule arrived on July 1, 2026. For anyone interconnecting from that date, generating capacity may not exceed export capacity by more than 50%. If you build a system designed to export less than it generates, you own and maintain the export limiting device yourself, the utility may require a witness test on it, you cannot raise your export capacity without approval, and you have to shut the system down if the limiter fails for more than 15 minutes in a single event until it is repaired.
Batteries and electric vehicles sit outside that 50% calculation, unless the storage can itself add export capacity and is not part of an export limited system. That carve-out is the main piece of flexibility in the rule.
Running the Formula on Your Own Bill
The calculation is short enough to do at the kitchen table. Take your electricity use for the previous 12 months in kilowatt-hours, divide by 8,760, divide that result by a capacity factor of 0.144, then round up to the nearest standard size: 2 kW increments between 2 kW and 20 kW, 5 kW increments between 20 kW and 150 kW. If you do not have 12 months of history at the property, the rule substitutes 7.15 kilowatt-hours per square foot of conditioned space.
Your last 12 months of use | Divided by 8,760 | Divided by 0.144 | Size you may build |
|---|---|---|---|
9,000 kWh | 1.03 | 7.13 | 8 kW AC |
12,000 kWh | 1.37 | 9.51 | 10 kW AC |
15,000 kWh | 1.71 | 11.89 | 12 kW AC |
18,000 kWh | 2.05 | 14.27 | 14 kW AC |
Run your own number before the first sales appointment. If a proposal comes back materially larger than the formula allows for your usage history, that is a question to ask on the spot rather than after signing.
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Surplus Is Cashed Out Monthly, Never Banked
This is where Kansas differs most from what people expect, and where the sizing rule starts to make sense. Under K.S.A. 66-1266(b), anyone who began operating a system on or after July 1, 2014 has their surplus settled at the end of each billing period, credited at 100% of the utility’s monthly system average cost of energy. There is no rolling kilowatt-hour bank. A sunny May does not pay for a dark December.
Two rates are therefore in play every month. Exports that offset your usage within the same billing month net one-to-one at retail, the same value as power you never sent out (for scale, EIA puts the Kansas statewide average residential rate near 14.84¢; your own tariff sets the exact figure). Only surplus beyond that month’s usage is cashed out at the utility’s monthly system average cost of energy, a wholesale figure that has recently run in the region of 2¢ to 3¢. The statute fixes the mechanism, but each utility recalculates the cent value monthly, so ask your utility for the current figure before anyone builds a model on it.
The sizing risk is a system whose summer output runs past its summer bills, because monthly surplus is worth roughly five to seven times less than the retail power it failed to offset, and there is no annual settling-up to rescue an oversized array. A slightly smaller system whose output your household absorbs month by month will usually beat a larger one in Kansas.
Two older arrangements still exist. Customers who started before July 1, 2014 kept one-to-one kilowatt-hour credit carried month to month, transferable with the property, though any credit sitting in the account on March 31 expires each year. That class ends on January 1, 2030, when everyone moves to the system average cost. And anyone who signed on or after July 1, 2024 while taking an optional time-varying rate is netted separately within each time-of-use period, which narrows the window further still.
The 4% Line Moved on July 1, 2026
Kansas net metering is first-come, first-served against a capacity cap, and that cap steps up on a fixed schedule under K.S.A. 66-1265. It reached 4% of the utility’s previous-year peak demand on July 1, 2026, and steps to 5% of the utility’s historic highest annual peak demand since 2014 on July 1, 2027. The Corporation Commission can lift it above 5% after a hearing, but is not required to.
From | Cap on all net metered systems | Measured against |
|---|---|---|
July 1, 2024 | 2% | Previous year’s peak demand |
July 1, 2025 | 3% | Previous year’s peak demand |
July 1, 2026 | 4% | Previous year’s peak demand |
July 1, 2027 onward | 5% | Highest annual peak demand since 2014 |
One more asymmetry is worth knowing before you sign. Customers who began before July 1, 2014 cannot be charged standby, capacity, interconnection or similar fees that a non-solar customer would not pay. That protection was not extended to anyone who came after. For newer customers, the utility is expressly allowed to propose time-of-use rates, minimum bills or other rate structures in a rate case, applying to all of them going forward.
You Likely Will Not Qualify If
- Your provider is a cooperative or a city utility. K.S.A. 66-1264 defines “utility” as investor-owned electric utility, so every rule on this page reaches Evergy and the other investor-owned companies and reaches no one else. Co-ops and municipals write their own terms.
- You want a system larger than your usage history supports. The sizing formula is a requirement, not a suggestion, and from July 1, 2026 generating capacity cannot exceed export capacity by more than 50%.
- You are expecting a state income tax credit. Kansas does not have one.
- You are counting on the 30% federal credit. It is $0 for purchased systems whose installation is completed after December 31, 2025.
- You are planning to bank summer output for winter. Surplus settles at the end of every billing period at wholesale value, and the pre-2014 banking class closes January 1, 2030.
- You expect the property tax exemption to cover your battery. Division of Property Valuation guidance issued September 17, 2024 found it does not apply to storage attached to a renewable system.
The Property Tax Exemption, and What It Leaves Out
With no income tax credit, the exemption is the one thing Kansas actually hands a homeowner. Solar equipment is exempt from property tax, so the value your array adds to the home does not raise your assessment. For any exemption applied for after December 31, 2016, that runs for the 10 taxable years following the year the installation is completed, rather than for the life of the system.
The gap is storage. Guidance from the Director of the Division of Property Valuation, issued September 17, 2024, concluded the renewable exemption does not extend to battery energy storage attached to a renewable energy system. Under monthly netting a battery does not change your bill arithmetic; it starts to matter only on an optional time-of-use rate, where netting happens within each time-of-use period. If you are weighing one anyway, know in advance that it does not come with the same tax treatment as the panels.
None of this makes Kansas a bad state for solar. It makes it a state where a correctly sized system beats an ambitious one, and where the questions to ask an installer are about your own usage history rather than about incentives. Our Kansas cost guide covers pricing and the Kansas installer list covers who does the work.
Kansas Solar FAQs
How big a solar system can I install in Kansas?
Kansas rules set it by formula. Divide your previous 12 months of use in kilowatt-hours by 8,760, divide that by a capacity factor of 0.144, then round up to the nearest 2 kW increment below 20 kW or 5 kW increment above it. A home using 12,000 kWh a year lands at 10 kW AC. The overall ceiling is 150 kW AC, and from July 1, 2026 generating capacity cannot exceed export capacity by more than 50%.
What does Kansas pay for exported solar?
For anyone who started on or after July 1, 2014, surplus is settled at the end of each billing period at 100% of the utility’s monthly system average cost of energy, a wholesale figure recently in the region of 2¢ to 3¢ against a retail rate near 14.84¢. There is no rolling kilowatt-hour bank, so a sunny May does not pay for a dark December. The exact cent value is recalculated monthly, so confirm it with your utility.
Does Kansas have a state solar tax credit?
No. Kansas offers no state income tax credit for residential solar. What it does offer is a property tax exemption, so the value the system adds does not raise your assessment, running for the 10 taxable years after installation for any exemption applied for after December 31, 2016. Battery storage attached to the system is excluded under September 17, 2024 guidance.
Is Kansas net metering going to run out?
It is capped and first-come, first-served. Under K.S.A. 66-1265 the cap reached 4% of the utility’s previous-year peak demand on July 1, 2026 and steps to 5% of the utility’s highest annual peak demand since 2014 on July 1, 2027. The Corporation Commission may raise it above 5% after a hearing but is not obliged to.
Do Kansas co-ops have to offer net metering?
No. K.S.A. 66-1264 defines “utility” as investor-owned electric utility, so the net metering and easy connection act covers Evergy and the other investor-owned companies only. Rural electric cooperatives and municipal utilities set their own interconnection and export terms, and you need those in writing from your own provider.
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References & Research Sources
EcoGen America reviewed the Kansas net metering statutes, the Corporation Commission’s sizing and export rules, state property tax guidance, federal price data, and IRS guidance for this page. The system average cost of energy is recalculated monthly by each utility, so the 2¢ to 3¢ range is indicative of recent filings, not a fixed rate. Sources accessed between June 10 and August 20, 2026.
- Kansas Legislature. K.S.A. 66-1264, definitions. Defines “utility” as investor-owned electric utility and sets the definitions of export and generating capacity. Accessed August 20, 2026.
- Kansas Legislature. K.S.A. 66-1265, capacity caps and metering. The first-come, first-served cap schedule of 2% from July 1, 2024 through 5% from July 1, 2027, the free bidirectional meter, and the fee protections for pre-July 2014 customers. Accessed August 20, 2026.
- Kansas Legislature. K.S.A. 66-1266, billing and settlement. Monthly netting with settlement of surplus at the monthly system average cost of energy, the pre-July 2014 one-to-one class ending January 1, 2030, the March 31 credit expiry, and the time-of-use netting rules in force since July 1, 2024. Accessed August 20, 2026.
- Kansas Corporation Commission. Net metering rulemaking record. The sizing formula, the 0.144 capacity factor, the 7.15 kWh-per-square-foot substitute, rounding increments, and the July 1, 2026 export capacity rule. Accessed August 20, 2026.
- Kansas Legislature. House Bill 2527 (2024). The 150 kW AC residential system size limit. Accessed August 20, 2026.
- Kansas Division of Property Valuation. Director’s guidance of September 17, 2024. Concludes the renewable property tax exemption does not extend to battery energy storage. Accessed August 20, 2026.
- U.S. Energy Information Administration (EIA). Electric Power Monthly. Kansas statewide average residential electricity price used for scale. Accessed August 20, 2026.
- Internal Revenue Service (IRS). One, Big, Beautiful Bill Provisions. Guidance on the Public Law 119-21 termination of the Section 25D residential credit for systems whose installation is completed after December 31, 2025. Accessed August 20, 2026.
