In most states that have moved off one-to-one netting, the share of output your house consumes directly decides the answer. Kentucky is different, and the reason is worth explaining, because it makes the decision simpler than in any neighboring state. Kentucky utilities pay roughly half the retail rate for exported power. States that have moved to avoided-cost credits commonly pay a quarter of retail or less. That single difference collapses the range of possible outcomes.
What Kentucky Pays for What You Send Back
Senate Bill 100 of 2019, at KRS 278.465 to 278.468, ended one-to-one netting for new customers and replaced it with export credits set in dollars by the Public Service Commission. Unusually, the Commission set them at a level that is genuinely usable.
Utility | Credit per exported kilowatt-hour | Against the 14.12¢ statewide average retail rate (context; your utility bills its own tariff rate) |
|---|---|---|
Louisville Gas and Electric | 7.089¢ under Rider NMS-2 | Roughly half |
Kentucky Utilities | 7.534¢ under Rider NMS-2 | Roughly half |
Kentucky Power | 9.746¢ under Tariff NMS II | Roughly seven tenths |
Where neighboring states have moved off one-to-one netting, their avoided-cost credits typically sit in the 3¢ to 5¢ range against retail rates near Kentucky’s, so a Kentucky homeowner is paid roughly twice as much for the same exported unit.
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Why Your Usage Pattern Matters Less Here
When exports earn a quarter of retail, the difference between a household that consumes most of its output and one that exports most of it is enormous. When exports earn half, that difference shrinks to something a homeowner can reasonably ignore.
A typical Kentucky system runs 9.09 kW at about $23,910, producing roughly 12,562 kWh a year against household use of around 1,047 kWh a month.
Household pattern | Annual value on an LG&E connection | Break-even |
|---|---|---|
Home most of the day, high direct use (about 85% used on site) | $1,641 | 14.6 years |
Mixed occupancy (about 60% used on site) | $1,420 | 16.8 years |
Out during the day, evening-heavy (about 40% used on site) | $1,244 | 19.2 years |
Every row uses the LG&E export credit of 7.089¢. Kentucky Utilities customers land marginally better and Kentucky Power customers roughly a year better again on the same usage, because their credits are higher. Kentucky Power customers are credited 9.746¢ on exports, but that utility’s residential tariff also differs from LG&E’s, so model both sides with your own numbers.
The consumed-power side of every row is valued at the 14.12¢ statewide average, which is ranking context rather than LG&E’s billed rate. LG&E, Kentucky Utilities and Kentucky Power each file their own residential tariff, so rerun the arithmetic with the rate on your own bill. The three rows assume roughly 85%, 60% and 40% of output consumed on site; twelve months of bills plus the installer’s production estimate give you your own share.
The spread between the best and worst rows is about 4.6 years. Kentucky has an unusually narrow range of outcomes, which has a practical consequence worth stating plainly: you do not need to change how your household uses electricity to make solar work here. An empty house during the day is a mild disadvantage here.
It also means quotes are easier to compare. In a state with a low export rate, two proposals can differ by years purely on their self-consumption assumption. In Kentucky the assumptions matter less, so the difference between quotes is mostly price and equipment, which are things you can actually judge.
The Rates Are Held Until at Least 2028
The LG&E and Kentucky Utilities credits were set by Commission order on August 30, 2024 in Case 2023-00404. A stipulation reached in October 2025 and approved by the Commission on February 16, 2026 in Cases 2025-00113 and 2025-00114 keeps the Rider NMS-2 rates and open enrollment in place until those utilities’ next base-rate cases, with a stay-out running to August 1, 2028.
That gives a Kentucky homeowner something most states cannot offer: a known, dated stability window. It is not a permanent guarantee and it should not be sold as one. What it means is that a decision made now is being made against terms that are not scheduled to move for some years.
If You Are Buying a House That Already Has Solar
For buyers of a house that already has panels, one detail matters more than anything else on this page.
Kentucky customers who began net metering service before September 24, 2021 keep genuine one-to-one kilowatt-hour netting for 25 years, and under KRS 278.466(6) that entitlement is transferable. It stays with the property when the house is sold.
So a Kentucky house with a legacy array attached is carrying an asset worth several thousand dollars over the remaining term, because every unit that roof produces offsets a unit at your utility’s full retail rate rather than earning a 7¢-class export credit. If you are buying, ask for the interconnection date and written confirmation of the netting status before you close. If you are selling, that status is worth naming in the listing.
What Kentucky Does Not Offer
- No state income tax credit for residential solar and no state rebate. The figures above assume nothing of the kind.
- No market for solar renewable energy certificates. Several nearby states have one and it causes recurring confusion. In Kentucky, certificates generate no income for a homeowner, and any proposal counting on them is wrong.
- No federal residential credit. Section 25D is $0 for host-owned systems whose installation is completed after December 31, 2025 under Public Law 119-21.
- Residential power purchase agreements are prohibited in Kentucky, which closes the third-party route to the separate Section 48E business credit; ownership at full price is the only path here.
Reasons to Hold Off in Kentucky
- If you plan to move within fifteen years. With the range this narrow, time in the property is the main variable left, and it is the one that most often decides against.
- If the roof is shaded or faces poorly. At 4.93 peak sun hours Kentucky has no production margin to give away.
- If a proposal counts certificate income or a state credit. Neither exists here, and their presence means the rest of the numbers need checking.
- If Duke Energy Kentucky or a cooperative serves you. Together they serve roughly half of Kentucky households, and each files its own export credit. If your credit sits in the 7¢ to 10¢ range, your numbers land inside the table above. A credit nearer 3¢ to 4¢ pushes the evening-heavy row toward 24 years, so get the credit from your own tariff sheet before modeling.
- If the roof needs replacing inside a decade. Removing and refitting arrives before break-even in every Kentucky scenario.
Kentucky is a straightforward, unspectacular yes for a household staying put on a decent roof. Installations are the 9th-cheapest in the country at $2.63 per watt, about 9% below the US average, the export credit is unusually high for a state without full netting, and the terms are held for some years. Our Kentucky incentives guide covers the tariff detail, and the Kentucky installer list covers who works here.
Get quotes priced on your utility’s published credit.
Get quotes priced on your utility’s published credit
Kentucky Solar FAQs
For a household staying put on a decent roof, yes. Our modeling puts simple payback between about 14.6 and 19.2 years on a typical 9.09 kW system costing around $23,910, on an LG&E connection. That range is unusually narrow because Kentucky pays roughly half the retail rate for exported power, where states on avoided-cost credits commonly pay a quarter of retail or less. It means you do not need to change how your household uses electricity to make solar work here.
Under Senate Bill 100 of 2019 at KRS 278.465 to 278.468, the Public Service Commission sets export credits in dollars. Louisville Gas and Electric pays 7.089¢ per kilowatt-hour and Kentucky Utilities 7.534¢, both under Rider NMS-2 set by order of August 30, 2024 in Case 2023-00404. Kentucky Power pays 9.746¢ under Tariff NMS II. Against a retail rate of 14.12¢, those are roughly half to seven tenths, which is generous compared with neighboring states.
Yes. Customers who began net metering service before September 24, 2021 keep one-to-one kilowatt-hour netting for 25 years, and under KRS 278.466(6) that entitlement transfers with the property rather than staying with the original owner. A Kentucky house with a legacy array therefore carries a real asset, because every unit produced offsets a unit at your utility’s full retail rate instead of a 7¢-class export credit.
Not imminently. A stipulation reached in October 2025 and approved by the Commission on February 16, 2026 in Cases 2025-00113 and 2025-00114 keeps the Rider NMS-2 rates and open enrollment in place until Louisville Gas and Electric and Kentucky Utilities file their next base-rate cases, with a stay-out running to August 1, 2028. That gives an unusually clear stability window for a decision made now. It is not a permanent guarantee and should not be presented as one.
No to both. Kentucky offers no state income tax credit for residential solar and no state rebate, and there is no market for solar renewable energy certificates here, which causes recurring confusion because several nearby states have one. Certificates generate no income for a Kentucky homeowner. The federal residential credit is also $0 for purchased systems whose installation is completed after December 31, 2025 under Public Law 119-21.
Methodology: simple payback before financing, with no federal residential credit for host-owned systems, exports at the published Rider NMS-2 credit, 3.44% annual rate escalation, 0.5% annual degradation, 25-year horizon.
References & Research Sources
EcoGen America reviewed the Kentucky Public Service Commission order of August 30, 2024 in Case 2023-00404 for the Rider NMS-2 export credits of 7.089¢ per kilowatt-hour at Louisville Gas and Electric and 7.534¢ at Kentucky Utilities, and for the framework established by Senate Bill 100 of 2019 at KRS 278.465 to 278.468 replacing one-to-one netting with Commission-set dollar credits for new customers; the October 2025 stipulation maintaining those rates and open enrollment until the utilities’ next base-rate cases with a stay-out to August 1, 2028; Kentucky Power Tariff NMS II under Case 2020-00174, current tariff effective March 1, 2026, for the monthly net excess credit of 9.746¢ per kilowatt-hour; KRS 278.466(6) for the 25-year grandfathering of one-to-one kilowatt-hour netting for facilities predating the Commission’s first order and for the transferability of that entitlement with the property; the Database of State Incentives for Renewables and Efficiency for the absence of a Kentucky state income tax credit, state rebate or market for solar renewable energy certificates; the Database of State Incentives for Renewables and Efficiency third-party solar PPA policy map, May 2026, for the prohibition on residential power purchase agreements in Kentucky; EIA Electric Power Monthly for the 14.12¢ residential price and the five-year growth rate of roughly 3.44% a year; and IRS guidance on the Public Law 119-21 termination of Section 25D. Output of 1,382 kWh per kilowatt per year, 4.93 peak sun hours, the 9.09 kW system size, the $23,910 installed cost, the $2.63 per watt figure and the 1,047 kWh monthly usage are EcoGen America figures from the EcoGen Solar Cost Index as of March 1, 2026. Duke Energy Kentucky and the cooperatives set their own arrangements. Utility shares of residential customers are from EIA-861 2024. Sources accessed between June 10 and August 18, 2026.
