Most states are in the middle of changing their solar rules, which makes any number you are quoted a number with a shelf life. Kentucky is the exception right now. In February 2026 the Public Service Commission approved a settlement in which the two largest utilities agreed not to change base rates before August 1, 2028, to leave their solar export rates where they are, and not to close the program to new customers before their next rate case. That is roughly two years of knowing what you are signing up for.
Kentucky Locked Its Rates Until August 2028
The settlement came out of the Louisville Gas and Electric and Kentucky Utilities rate cases, numbers 2025-00113 and 2025-00114, and the Commission signed off on February 16, 2026. Three commitments in it matter to a homeowner deciding this year.
- A base-rate stay-out until August 1, 2028. Changes to the approved base rates cannot take effect before that date.
- NMS-2 export rates stay where they are. The rate you are credited for exported power is not moving as part of this settlement.
- The program stays open to new customers. Neither utility will close NMS-2 to new participants earlier than the effective date of new rates from their next base rate case.
None of that is a promise about 2029. It is a commitment with a date on it, and the value of a commitment with a date on it is that you can plan against it. Most states cannot offer a homeowner that much.
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Dollar Credits, Not Kilowatt-Hours
Senate Bill 100, passed in 2019, changed what a Kentucky export is worth. Before it, a kilowatt-hour you sent to the grid cancelled a kilowatt-hour you later pulled back, one for one. After it, exports earn a dollar credit at a rate the Commission sets, while everything you consume is billed at the ordinary retail rate. The same law raised the system size ceiling from 30 kW to 45 kW.
Utility | Credit for exported power | What you pay for power you buy |
|---|---|---|
Louisville Gas and Electric | 7.089¢ | Your utility’s full retail rate |
Kentucky Utilities | 7.534¢ | Your utility’s full retail rate |
Kentucky Power | 9.746¢ | Your utility’s full retail rate |
The Louisville Gas and Electric and Kentucky Utilities rates were reset by the Commission’s August 30, 2024 order and the February 2026 settlement holds them until each utility’s next base rate case. Kentucky Power’s rate took effect March 1, 2026. For scale, Kentucky’s statewide average residential rate is about 14.12¢ per kilowatt-hour; your own utility’s tariff rate is what a consumed kilowatt-hour actually costs you.
What the shape tells you is clear enough without the third decimal place. An exported kilowatt-hour is worth roughly half a consumed one across Kentucky. A system sized to your own daytime use, rather than one built to send as much as possible to the grid, is the arrangement the tariff rewards.
The September 2021 Line and the 25 Years Behind It
Kentucky runs two net metering tariffs side by side, and one date separates them. Customers who began taking net metering service before September 24, 2021 are on NMS-1 and receive credits in kilowatt-hours rather than dollars, which is the old one-for-one arrangement. Everyone from that date onward is on NMS-2 and the dollar credits above.
The NMS-1 arrangement runs for 25 years from the customer’s start. That is an unusually long protection, and it is worth real money on a house: a 2020 array in Kentucky is on terms nobody can buy today and will stay there into the 2040s.
If you are buying a home with panels already on it, the single question to ask is when net metering service began, and the answer should come from the interconnection agreement rather than from the seller’s recollection. A house on NMS-1 carries an asset. A house on NMS-2 carries a normal system.
You Likely Will Not Qualify If
- You are hoping to get onto NMS-1. It closed to new customers on September 24, 2021 and cannot be reopened. Only an existing system carries it, and only for the balance of its 25 years.
- You are expecting a Kentucky state solar tax credit. There is not one. The state’s renewable energy credit closed to new installations years ago and has not been revived.
- You are counting on the 30% federal credit. Section 25D is $0 for purchased systems whose installation is completed after December 31, 2025 under Public Law 119-21.
- You want a system larger than 45 kW. That is the statutory ceiling for net metering in Kentucky.
- Your power comes from a rural electric cooperative. Co-ops set their own export terms, and the settlement described here binds LG&E and KU rather than the whole state.
What Kentucky Gives and What It Does Not
The whole 2026 stack, and the status of each piece:
Kentucky program | What it pays you | Standing in 2026 |
|---|---|---|
Federal 25D residential credit | $0 | Ended for systems you buy and own whose installation is completed after December 31, 2025 |
Kentucky state tax credit | None | The old renewable credit is closed; no program pending |
NMS-2 export credit | 7.089¢ LG&E, 7.534¢ KU, 9.746¢ Kentucky Power | Open; LG&E and KU rates held until at least August 1, 2028 |
NMS-1 legacy netting | Full retail 1-to-1 | Closed September 24, 2021; 25-year terms that transfer with the home |
Set out plainly, the Kentucky list is short. No state income tax credit. No state rebate. No SREC market. The federal credit is gone for purchased systems. What is left is an export rate around half of retail and, unusually, a written commitment that it will not move before August 1, 2028.
That sounds thin, and in a sense it is. But in most states, homeowners are asked to choose under a rule that could change during the sales process. Kentucky homeowners are being asked to choose under a rule with a stated expiry date, which is a materially easier decision even though the numbers are smaller. Our Kentucky cost guide covers pricing and the Kentucky installer list covers who does the work.
Kentucky Solar FAQs
Yes, but not in the original form. Senate Bill 100 replaced one-for-one kilowatt-hour netting with dollar credits set by the Public Service Commission. Exports earn 7.089¢ on Louisville Gas and Electric, 7.534¢ on Kentucky Utilities and 9.746¢ on Kentucky Power under the Commission’s August 30, 2024 order, while everything you consume is billed at your utility’s full retail rate. The system size ceiling is 45 kW.
Not before August 1, 2028 for the two largest utilities. The Public Service Commission approved a settlement on February 16, 2026 in which Louisville Gas and Electric and Kentucky Utilities committed to a base-rate stay-out until that date, agreed to leave NMS-2 export rates at their current level, and agreed not to close NMS-2 to new participants before new rates from their next base rate case take effect.
The date you started. Customers who began net metering service before September 24, 2021 are on NMS-1 and receive credits in kilowatt-hours, the old one-for-one arrangement, for 25 years from their start. Anyone from that date onward is on NMS-2 and receives dollar credits at the Commission-set rate. NMS-1 is closed and cannot be reopened.
No. Kentucky offers no state income tax credit for residential solar, no state rebate and no market for solar renewable energy certificates. With Section 25D at $0 for purchased systems whose installation is completed after December 31, 2025, the export rate and the rate stability behind it are what a Kentucky homeowner is actually buying.
When net metering service began, taken from the interconnection agreement rather than the seller’s description. A system that started before September 24, 2021 is on NMS-1, credited in kilowatt-hours one for one, for 25 years from its start date. That is worth substantially more than the dollar credits a new system receives, and it runs into the 2040s.
Two years of known terms is worth using. Enter your ZIP code to see what Kentucky installers are quoting now.
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References & Research Sources
EcoGen America reviewed the Kentucky Public Service Commission’s orders in the LG&E and KU rate cases, utility net metering documentation, federal energy data, and IRS guidance for this page. Sources accessed between June 10 and August 20, 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 base-rate stay-out until August 1, 2028, the commitment to hold NMS-2 rates, and the commitment not to close NMS-2 before the next base rate case. Accessed August 20, 2026.
- Kentucky Public Service Commission. Order of August 30, 2024 in the LG&E and KU rate cases. Sets the NMS-2 export compensation rates now in effect: LG&E 7.089¢ and KU 7.534¢ per kilowatt-hour. Accessed August 20, 2026.
- Kentucky General Assembly. Senate Bill 100 (2019). The move from retail-rate netting to Commission-set compensation and the increase in the system ceiling from 30 kW to 45 kW. Accessed August 20, 2026.
- LG&E and KU. Net metering documentation. The September 24, 2021 line between NMS-1 kilowatt-hour credits and NMS-2 dollar credits, and the 45 kW limit. Accessed August 20, 2026.
- U.S. Energy Information Administration (EIA). Electric Power Monthly. The Kentucky statewide average residential 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.
