Kentucky is about the simplest solar case there is. The only money is a bill credit your utility pays for power you send to the grid. Simple payback before incentives is about 18.5 years statewide and 19.5 years at Kentucky Utilities, the largest utility. Across the four large utilities it runs from about 15 years at Kentucky Power to 19.5 at KU. That makes it a choice for a home you plan to keep.
Kentucky, simple payback before incentivesAbout 18.5 years
Kentucky Utilities, the largest utilityAbout 19.5 years
Typical owned 7.77 kW Kentucky system at $20,591 cash (EcoGen Solar Cost Index, September 2026), no incentives, each utility’s EIA price less its fixed charge, its credit, and the share of output its solar homes send to the grid as reported to the EIA. The four large utilities run 15.2 to 19.5 years. No upkeep or price rises counted. See the math.
- Your utility: each large utility publishes one credit; co-ops set their own.
- Daytime use: power used as it is made saves about one and a half times the LG&E or KU credit.
- Time in home: about 15 to 19.5 years at the large utilities, so plan to stay put.
2026 rules: home systems finished after December 31, 2025 get no federal homeowner credit (IRS). Duke Energy Kentucky’s export credit rose to 7.4805 cents per kWh on July 10, 2026, and Kentucky Power’s current credit applies from March 1, 2026.
How we checked this guide
Credits and charges come from the utilities’ tariffs and the Public Service Commission’s orders, the electricity price from the U.S. Energy Information Administration. The example is the EcoGen Solar Cost Index typical Kentucky home. Where we assume a number, the page says so.
The writer and checker shown above are EcoGen staff. EcoGen is paid when homeowners request quotes, which is explained beside the quote form. Read our editorial standards.
Why Kentucky is the simplest solar case
Kentucky has no state rebate, no state tax credit and no certificate market for home solar. What is left is one number: the bill credit your utility gives for each kWh (kilowatt-hour, the unit your bill counts) your panels send to the grid. That is your export credit.
Since January 1, 2020, the Public Service Commission has set that credit in dollars for each utility, for owned systems up to 45 kW. At the four large utilities it runs from about half to about seven tenths of the average price of power. With so few moving parts, the quote price, the roof and how long you stay decide most of the rest.
Five things that make a Kentucky home a better or worse fit
Read each row across.
Utility credit
Worth a closer look
The quote uses your own utility’s credit, from 7.089 cents per kWh at LG&E to 9.746 cents per kWh at Kentucky Power.
Pause and check
The quote values exports at the full retail price, or your co-op’s rule is unknown.
Check next: the credit the quote assumed and its tariff.
Daytime use
Worth a closer look
Someone is home in the day, or big appliances can run while the sun is up.
Pause and check
The house is empty all day and most of your power use comes after dark.
Check next: the home-use share the quote assumed.
Price
Worth a closer look
A cash price near the Index’s $20,591 for 7.77 kW ($2.65 per watt), paid in cash or with a low-fee loan.
Pause and check
A higher price or a loan dealer fee. With no rebate, every extra dollar adds to the wait.
Check next: the cash price next to the financed price, with APR, fees and term.
Roof and time in home
Worth a closer look
An unshaded roof with decades of life left, and you plan to stay past payback.
Pause and check
The roof needs replacing soon, heavy shade, or a likely move before payback.
Check next: the roof’s age, a shade report and your likely moving date.
Ready to get real quotes for your Kentucky home?
Quotes are free. Hold each one against the payback math below.
Solar providers that serve your area may contact you, and they pay EcoGen for the introduction. How we make money.
The payback math for a typical Kentucky system
Simple payback is the years your savings take to cover what you paid: net cost divided by yearly savings. Here is the typical Kentucky system on Louisville Gas and Electric (LG&E), the lowest credit of the four large utilities.
- Cash price
- $20,591
- Confirmed incentives
- $0
- Year-one production
- 10,738 kWh
- Used at home / exported
- 66.8% / 33.2%
- LG&E price for home use (EIA, 12 months, less the fixed charge)
- $0.11675/kWh
- Export credit
- $0.07089/kWh
- Upkeep and price rises
- Not counted
- Used-at-home value
10,738 × 66.83% × $0.11675$838/yr - Export value
10,738 × 33.17% × $0.07089$252/yr - Yearly savings
$838 + $252$1,090/yr - Simple cash payback
$20,591 ÷ $1,090about 18.9 years
Inputs: the EcoGen Solar Cost Index typical Kentucky system (7.77 kW, $20,591 cash, September 2026; 1,382 kWh per kW a year, so about 10,738 kWh in year one) and the LG&E credit. No incentive: Kentucky has none for home solar. Home use is valued at LG&E’s EIA price for the 12 months to July 2026, 13.260¢, less its $14.60 a month fixed charge: 11.675¢. The 33.2% sent out is the share LG&E’s solar homes reported to the EIA, not a reading from your meter. No upkeep and no price rises are counted. This is simple payback before incentives from our per-utility figures of October 19, 2026.
Now the same system at Kentucky Power, which has the highest credit of the four and a higher price.
| Scenario | Export credit | Export value | Yearly savings | Simple payback |
|---|---|---|---|---|
| LG&E credit | $0.07089/kWh | $252 | $1,090 | about 18.9 years |
| Kentucky Utilities (KU) credit | $0.07534/kWh | $312 | $1,054 | about 19.5 years |
| Duke Energy Kentucky credit | $0.074805/kWh | $305 | $1,134 | about 18.2 years |
| Kentucky Power credit | $0.09746/kWh | $427 | $1,358 | about 15.2 years |
The utility moves the answer by about four years, from 15.2 years at Kentucky Power to 19.5 at Kentucky Utilities (KU), the largest utility. Weighted by customers, Kentucky’s figure is 18.5 years before incentives. Each case uses that utility’s own price less its fixed charge and the export share its solar homes reported to the EIA: 33.2% at LG&E, 38.6% at KU, 38.0% at Duke and 40.8% at Kentucky Power.
Your daytime use moves it too. At LG&E, each kWh you use as it is made saves 11.675¢, while each kWh sent out earns 7.089¢.
Try your own Kentucky numbers
It starts with the LG&E case. Enter your quote’s numbers and your utility’s credit, then press Calculate. Nothing you enter is sent anywhere.
Example result
about 18.9 years
simple cash payback
- Used-at-home value
- $838/yr
- Export value
- $252/yr
- Owner costs
- −$0/yr
- Yearly savings
- $1,090/yr
- Net cost
- $20,591
Starts with the LG&E case. Flat first-year values; rates, panel wear and repairs will change the result.
What each Kentucky utility credits for exported power
Power used at home saves the full price. Power sent out earns your utility’s credit. Credits carry forward and are never paid in cash.
Used at home: 7,176 kWh. Each one replaces power you would have bought, so it saves the price per kWh ($0.11675 at LG&E here).
Sent to the grid: 3,562 kWh. These earn whatever your utility pays for exports ($0.07089 here). That can be far less. The split is the share LG&E’s solar homes reported to the EIA.
| Utility | Credit for power sent out | Energy charge on power you buy | Fixed charge that stays |
|---|---|---|---|
| LG&E (Louisville area) | 7.089 cents per kWh, every kWh | 11.499 cents per kWh | $0.48 a day |
| Kentucky Utilities (Lexington and many counties) | 7.534 cents per kWh, every kWh | 11.396 cents per kWh | $0.58 a day |
| Duke Energy Kentucky (northern Kentucky) | 7.4805 cents per kWh, every kWh | 12.6104 cents per kWh | $14.75 a month |
| Kentucky Power (eastern Kentucky) | 9.746 cents per kWh, surplus only | 15.385 cents per kWh for the first 600 kWh, then 11.534 cents | $24.00 a month or more |
| Co-ops and city utilities | Set by each one | Ask your utility | Ask your utility |
Energy charges are base prices before monthly adjustment charges. Kentucky homes paid an average of 13.92¢ per kWh from August 2025 to July 2026 (EIA). City utilities set their own terms.
Check which Kentucky utility sets your credit
Ask each installer which utility credit they used, in writing.
Solar providers that serve your area may contact you, and they pay EcoGen for the introduction. How we make money.
Is the credit locked until 2028? Not quite
On February 16, 2026 the Commission kept the LG&E and KU credits at their current level, with no end date. August 1, 2028 is only the earliest date new base rates can take effect. It is not a promise about the solar credit, and Duke Energy Kentucky must update its credit every two years from 2028. Exports bring in almost a quarter of what the LG&E example panels earn, so a later cut would stretch the payback.
Buying a house that already has panels
Older systems swap one kWh sent out for one used later until a fixed date: September 24, 2046 at LG&E and KU (in service before September 24, 2021), May 14, 2046 at Kentucky Power (before May 15, 2021) and January 1, 2050 at Duke Energy Kentucky (before January 1, 2025). The rule stays with the house; the seller’s unused credits do not. Get the utility to confirm the rule in writing before you close.
Before you sign: what a Kentucky quote must spell out
The utility tariffs say the customer must own and operate the system, so compare cash and loan offers (see our solar financing guide). Check each quote for these six lines.
- Utility and credit. Your utility’s name and the export credit the quote used.
- Home-use share. The share of solar power the quote assumes you use at home.
- No missing incentives counted. No state credit, state rebate or federal credit (it ended for systems finished after December 31, 2025).
- Sales tax. Whether the price includes Kentucky’s 6% sales tax.
- Size against your use. kW and year-one kWh next to a year of bills.
- Cash and financed prices. Both totals side by side, with any dealer fee shown.
Compare Kentucky solar quotes
Ask each installer to price your savings on your own utility’s published credit. Enter your ZIP code to request quotes from solar providers that serve your area.
How EcoGen is paid
EcoGen America does not sell or install solar. When you request quotes, we pass your request to solar providers serving your area, and they pay us for the introduction. Providers can include installers, solar marketplaces and lead exchanges, and more than one may contact you. You never pay us.
Other Kentucky solar pages
- Kentucky solar guide: utilities, incentives and installers in one place
- Kentucky solar companies: compare local installers before you request quotes
- Kentucky solar incentives: bill credits by utility
- What solar costs in Kentucky
- Free solar panels in Kentucky: what a no-cost offer means
- Are solar panels worth it? The national guide and payback calculator
All 51 state guides
Questions Kentucky homeowners ask about solar
Are solar panels worth it in Kentucky?
They can be for a home you plan to keep, on a sound and sunny roof. Simple payback before incentives is about 18.5 years statewide and 19.5 years at Kentucky Utilities, the largest utility, with the four large utilities from 15.2 to 19.5 years. With no rebate, the quote price and your daytime use decide the rest.
What does Kentucky pay for solar power I send to the grid?
A bill credit set by the Public Service Commission for each utility: 7.089 cents per kWh at LG&E, 7.534 cents per kWh at KU and 7.4805 cents per kWh at Duke Energy Kentucky. Kentucky Power credits 9.746 cents per kWh, but only on the surplus left after your own use in each bill period.
Does it matter if nobody is home during the day?
Yes. At LG&E, power you use at home saves about 11.7 cents per kWh once the fixed charge is taken out, while an exported kWh earns 7.089 cents. The more of your solar power you use as it is made, the sooner the system pays back.
Are Kentucky solar credits locked until 2028?
No. The Commission’s orders of February 16, 2026 kept the LG&E and KU credits at their current level, with no end date. August 1, 2028 is the earliest that new base rates can take effect. It is not a promise about the solar credit, and Duke Energy Kentucky must update its credit every two years from 2028.
Does an older Kentucky solar home keep one-for-one net metering?
Yes, until a fixed date. Older systems swap one kWh sent out for one used later: until September 24, 2046 at LG&E and KU, May 14, 2046 at Kentucky Power and January 1, 2050 at Duke Energy Kentucky. The rule stays with the house, but the seller’s unused credits do not. Ask the utility which rule applies, in writing.
Are there Kentucky solar incentives or tax credits?
Not for home systems. The state’s 2025 schedule lists 24 credits, and none is for home solar. There is no property tax exemption, and the 6% sales tax applies to goods. The federal homeowner credit ended for systems finished after December 31, 2025.
Sources, method and corrections
The example uses the Cost Index typical Kentucky system (September 2026), each utility’s EIA price for the 12 months to July 2026 less its fixed charge, each utility’s published credit and the share of output its solar homes reported to the EIA as sent to the grid. These are our per-utility figures of October 19, 2026, simple payback before incentives. No upkeep and no price rises are counted. Simple payback uses flat first-year values. The calculator runs in your browser and sends nothing.
Spotted an error? Tell us through our corrections and feedback process.
- LG&E: electric tariff, Rate RS and Rider NMS-2 (checked September 30 to October 1, 2026)
- Kentucky Utilities: electric tariff, Rate RS, Riders NMS-1 and NMS-2
- Duke Energy Kentucky: tariff on file with the PSC, Rate RS and Riders NM I and NM II (credit effective July 10, 2026)
- Kentucky Power: tariff on file with the PSC, Tariff R.S. and N.M.S. II (surplus credit effective March 1, 2026)
- Kentucky PSC: order of February 16, 2026, Case No. 2025-00113 (NMS-2 credits kept; base-rate stay-out to August 1, 2028)
- Kentucky Revised Statutes 278.465 to 278.468: net metering (45 kW limit and the 1% cap)
- Kentucky Department of Revenue: Schedule ITC (2025) (no home solar credit)
- Kentucky Department of Revenue: property tax exemptions (no solar exemption)
- Kentucky Department of Revenue: sales and use tax (6%, no local sales tax)
- U.S. EIA: average residential electricity price by state (August 2025 to July 2026)
- IRS: Residential Clean Energy Credit (not available for systems finished after December 31, 2025)
- EcoGen Solar Cost Index, September 2026: what solar costs in Kentucky
