Kentucky Solar Incentives (2026): One Bill Credit, Set by Your Utility

What is a kWh of solar worth on a Kentucky electric bill?

It depends on where the power goes. Power you use at home is worth the price you would have paid for it. Power you send to the grid earns a lower credit, set for each utility by the Public Service Commission (PSC), the state’s utility regulator.

Example with LG&E: 100 kWh of solar used at home saves $11.50 in energy charges. The same 100 kWh sent to the grid earns $7.09.

This is called net metering: your utility credits you for solar power you send to the grid. It applies to systems up to 45 kW that you own.

Energy charges are the base prices in each utility’s tariff, its official price sheet. The LG&E and KU charges apply from September 1, 2026. Fuel and other adjustment charges move the final price each month.

Find your Kentucky utility: LG&E, KU, Duke, Kentucky Power or a co-op

The name is at the top of your bill. Open it to see your credit and what to watch.

The sections below apply across Kentucky.

Is the LG&E and KU solar credit locked until 2028?

No. The PSC’s orders of February 16, 2026 say less than that. The credit has no end date, and the PSC can change it in a later case.

• What the orders did: they kept both credits at their current level. The utilities agreed not to close the program to new customers before new rates from their next rate cases take effect.
• What the 2028 date is: new base rates, the main prices on your bill, cannot take effect before August 1, 2028. It is not a guarantee for the solar credit.
• What can still move: the PSC told KU to file updated cost figures for the credit. Duke Energy Kentucky must update its credit every two years from 2028.
• The state cap: once solar systems on the credit reach 1% of a utility’s highest hourly demand, the utility no longer has to take new customers.
• What you keep: a standard rate with a fixed charge and a price per kWh, for 25 years after you start. The credit amount is not promised.

What lowers the price of solar in Kentucky?

No state rebate or utility rebate for home solar panels was open when we checked. Kentucky’s 2025 list of individual income tax credits has 24 credits, and none is for home solar.

A typical Kentucky home system is 9.09 kW. It costs about $23,907, or $2.63 per watt. The federal tax credit ended for systems finished after December 31, 2025, so a buyer pays that price in full. That makes the quote itself the thing to check.

• Sales tax: Kentucky’s sales tax is 6% on retail sales of goods. Ask your installer whether the quoted price includes sales tax.
• Property tax: Kentucky has no property tax exemption for home solar. Its constitution, in Section 172, taxes all property it does not exempt at fair cash value. Ask your county’s Property Valuation Administrator (PVA), the office that values your home, how it values panels.
• The old state credit: Kentucky once had an income tax credit that covered solar. It applied only to tax years that began before January 1, 2016.
• Who owns the system: every utility tariff we read says the customer must own and operate the system. A leased system, or one owned by a solar company, does not fit that rule as written.

What can Kentucky renters and battery owners use?

Very little, and none of it is a subsidy.

• LG&E and KU Solar Share: you pay $5.55 a month or $799 once for each share of 250 watts in a utility solar farm. The utilities estimate a share makes 18 to 38 kWh a month. It is a purchase, and your bill can go up.
• Cooperative Solar: members of some co-ops, such as Shelby Energy and Owen Electric, can pay $460 per panel for a 25-year license to a panel in a co-op solar farm. The co-ops do not publish what the bill credit is worth.
• Home batteries: no battery payment is open. LG&E and KU list a Bring Your Own Battery pilot as coming soon, at $20 a month plus $1 for every kWh your battery delivers during grid events. There is no start date. Do not plan on it.

You are unlikely to get the credit your Kentucky quote shows if

• The quote values all your solar power at the retail price. Power sent to the grid earns 7.089 cents per kWh at LG&E and 7.534 cents per kWh at KU. Ask what share of the power the quote assumes you send out.
• The quote uses the wrong utility’s credit. Kentucky Power, Duke Energy Kentucky and every co-op have their own numbers and rules.
• You lease the panels. The tariffs require you to own and operate the system.
• You expect the old kWh-for-kWh rule. At LG&E and KU it closed to systems put in service on or after September 24, 2021. Only an existing system keeps it.
• You build up credits and then move. Unused credits are never paid out. They end with your account.

From application to first credit: the Kentucky steps

1. Before you sign: confirm your utility and its credit. Ask which credit per kWh the quote uses, and what share of the power it assumes you send out.You, with your installer.
2. Apply to the utility for net metering. The application also covers interconnection, the utility’s permission to connect to its lines. LG&E and KU ask for an electrical drawing, a site layout and the specification sheet of the inverter, the box that turns solar power into household power.Your installer can file it for you.
3. Wait for approval, then install. Every utility requires approval before the system is connected. LG&E and KU say nearly all applications have no review fee.The utility reviews. Your installer builds.
4. Pass the local inspection and tell the utility. Your city or county usually inspects the work. The utility then installs a net meter, which counts power in both directions.Your installer, your local inspector and the utility.
5. Read your first bill. Check the kWh sent out, the credit per kWh and any credit carried forward. At LG&E and KU the credits start when the net meter is installed.You.

More Kentucky solar guides