Kansas Solar Panels

Kansas law (K.S.A. 79-201 Eleventh) provides a 10-year property tax exemption for all property used to generate electricity from renewable energy resources, including residential solar (photovoltaic) systems. This means the added value that solar panels bring to your home is excluded from your property tax assessment for a full decade after installation is completed.

The financial benefit is meaningful: solar panels typically add around $12,500 to a Kansas home’s market value. At the state’s average property tax rate of roughly 1.33%, that translates to approximately $166 in annual tax savings — or more than $1,600 over the full 10-year exemption period. No application is required; the exemption applies automatically once your system is installed and assessed.

Important note: Kansas has ruled that this property tax exemption applies to solar panels but does not extend to battery storage systems used in residential installations. The exemption is available to both residential and commercial solar system owners.

Under Kansas’ Net Metering and Easy Connection Act (K.S.A. 66-1263 through 66-1271), the two major investor-owned utilities — Evergy and Liberty Utilities — are required to offer net metering to residential solar customers. Customers who began operating a system on or after July 1, 2024 may export up to 150 kilowatts AC back to the grid, sized based on historic energy consumption. Starting January 1, 2026, generation capacity for new net metering participants is limited to 50% of export capacity.

Excess electricity exported to the grid earns a bill credit, but it is calculated at the utility’s wholesale “system average cost” rate — approximately 2.4 cents per kWh — rather than the full retail rate of around 13.62 cents per kWh. Unused credits carry forward monthly but expire annually on March 31. This lower compensation rate is an important factor to consider when sizing your solar system.

Municipal and cooperative electric utilities in Kansas are not required to offer net metering, but they must offer a “parallel generation” (net billing) program. Under this program, solar customers receive dollar-value bill credits for excess power sent to the grid, compensated at 1.5 times the utility’s avoided cost rate. Many co-ops and municipal utilities offer this on terms similar to the larger investor-owned utilities.

The federal Residential Clean Energy Tax Credit under IRS Code Section 25D provides a 30% tax credit on the full installed cost of a new battery storage system with a capacity of 3 kWh or greater. Critically, this credit remains fully available in 2026 — unlike the residential solar ITC, which was eliminated — and can be claimed on a standalone battery purchase, meaning you do not need to pair the battery with a new solar system to qualify.

To claim the credit, homeowners file IRS Form 5695 (Residential Energy Credits) with their federal tax return for the year the battery system is placed in service. For example, a $10,000 battery installation would generate a $3,000 direct reduction in your federal tax liability. There is no dollar cap on the credit amount, making it especially valuable for larger battery systems.

The Section 25D battery storage credit is scheduled to remain at 30% through 2032, then phase down to 26% in 2033 and 22% in 2034, before sunsetting entirely after 2034 unless Congress acts to extend it. Kansas does not offer any state-level battery storage rebates or incentives, making this federal credit the primary financial incentive available to Kansas homeowners adding battery storage.

Evergy’s Home Battery Storage Pilot Program offers a limited number of qualifying residential customers a free 16 kWh home battery storage system — valued at approximately $18,000 — at no upfront cost. Evergy owns, installs, operates, and maintains the battery system throughout the pilot. The only cost to the customer is a $10 monthly program fee. The battery can help lower energy costs and provide backup power for essential lighting and appliances during outages.

Because this is a research and development pilot program, availability is limited and enrollment is not guaranteed. Interested Evergy customers should contact Evergy directly to inquire about current availability and eligibility requirements. The pilot program is scheduled to run through the end of 2026.

At the end of 2026, participants will have three options: (1) transfer ownership and maintenance of the battery to you, with an agreement to provide Evergy access to energy data and grid control during emergencies (with compensation if the battery supports the grid); (2) purchase the battery at its depreciated value with no further obligations to Evergy; or (3) request that Evergy remove the battery at no cost to you.

The USDA Rural Energy for America Program (REAP) provides grant funding and guaranteed loan financing for solar and other renewable energy systems installed by agricultural producers and rural small businesses in Kansas. Grants can cover up to 50% of total eligible project costs (using Inflation Reduction Act funds), and loan guarantees can cover up to 75% of project costs. Combined grant and loan guarantee funding can reach up to 75% of total eligible project costs. Solar grants are generally capped at $1 million per project. This program is intended for commercial/agricultural use — residential-only projects are not eligible.

To qualify, applicants must be either an agricultural producer with at least 50% of gross annual income from agricultural operations, or a small business located in a rural area with a population of 50,000 or fewer. Applicants must also have no outstanding federal debt, judgments, debarments, or delinquent federal taxes. K-State University’s Kansas Energy Program offers free energy assessments and grant application assistance (contact: [email protected] or 785-532-6026).

Important 2026 Status Update: USDA has currently halted new REAP grant applications while the department rewrites program rules to comply with a 2025 executive order aimed at reducing renewable energy subsidies. USDA has stated there will not be any further REAP grants until new regulations are in effect. Loan guarantee applications may still be processed. Interested applicants should monitor the USDA Rural Development Kansas State Office for updates on when grant applications will reopen.

Kansas offers a state-level tax credit for businesses and taxpayers who invest in new renewable electric cogeneration facilities, including solar energy generation facilities. The credit equals 10% of the qualified investment for the first $50 million invested, and 5% of any qualified investment exceeding $50 million. This is a commercial/business incentive and is not available to residential homeowners.

The credit is taken in ten equal annual installments, beginning with the tax year in which the taxpayer places the new renewable electric cogeneration facility into service. This phased structure allows businesses to offset their Kansas state tax liability over a decade, making large-scale solar investments more financially attractive.

Businesses considering a significant solar or renewable energy investment in Kansas should consult the Kansas Department of Revenue and a qualified tax professional to confirm eligibility and ensure proper documentation of the qualified investment. The official program details and application information are available through the Kansas Department of Revenue.