Kentucky
Solar in Kentucky
Kentucky electricity prices have surged 19% from 2020 to 2024, prompting more homeowners to explore solar installation in Kentucky as a smart financial move. Even with the state’s below-average rates of 12.98¢ per kWh compared to the national average of 16.6¢, solar panels for home use can still deliver meaningful long-term savings.
This comprehensive guide walks you through everything you need to know about going solar in the Bluegrass State, from understanding costs and available incentives to selecting the perfect system for your home.
Key Takeaways
- Kentucky electricity rates have risen 13% since 2021 making solar a smart hedge against future utility increases.
- Federal tax credits reduce solar costs by 30% helping Kentucky homeowners save an average of $8,075 upfront.
- Solar systems in Kentucky generate enough power to offset 100% of typical home electricity usage year-round.
Solar Cost in Kentucky
Our Kentucky solar cost calculator uses real installation data from homes across Louisville, Lexington, Bowling Green, and other Kentucky cities. Get personalized pricing based on actual local projects, not generic estimates.
System
Cost
Savings
Kentucky Electricity Prices
Understanding Kentucky’s electricity costs helps homeowners make informed decisions about their energy future and potential savings.
Kentucky electricity rates have risen from 11.5¢ per kWh in 2021 to 13.0¢ in 2024, representing a 13% increase over three years.
Solar panels generate your own electricity, reducing dependence on the grid and providing protection against these continuing rate increases.
Over 25 years, solar systems can shield homeowners from decades of utility rate hikes while building long-term energy independence.
Price of Energy: Kentucky vs National Average
Kentucky Area Utility Providers
Kentucky’s major utilities—KU, LG&E, Duke Energy, and Kentucky Power—offer rates well below the 2023 national average of 16.0¢ per kWh, ranging from 12.0¢ to 14.2¢.
These lower rates stem from Kentucky’s abundant coal resources and established energy infrastructure, keeping electricity costs around 12.70¢ per kWh statewide in 2023.
Even with affordable utility rates, solar can lock in predictable energy costs and protect against future price increases over 25+ years.
Kentucky Utilities Electricity Rates
Kentucky Solar Incentives
Kentucky residents can significantly reduce solar installation costs through available solar incentives in Kentucky at federal and state levels.
Federal tax credits provide substantial upfront savings, while Kentucky utilities offer net metering programs and specialized incentives like Duke Energy’s PowerPair program for solar-plus-battery installations.
These programs vary by utility provider and have specific eligibility requirements that Kentucky homeowners should understand before installation.
$8,075
Average savings in Kentucky solar rebates
| Incentive | Type | Description | Source |
|---|---|---|---|
| Residential Clean Energy Credit | Federal tax credit | A federal tax credit worth 30% the cost of a solar panel system in the year it’s installed | Learn More |
| Duke Energy: PowerPair Solar + Battery Incentive | Utility program | New pilot for Duke Energy Customers offering $3,600 for solar plus $5,400 for battery storage. Combined maximum $9,000. | Learn More |
The Residential Clean Energy Credit lets people claim a tax credit worth 30% the cost of a solar panel system in the year it’s installed. The credit can only be used against taxes you owe or have already paid that year, but any excess credit can be rolled over to future years.
The credit is broadly available, though there are a few restrictions — you must own the panels and they must be on a house you live in — so be sure to consult a tax professional about your situation.
The Duke Energy PowerPair Solar + Battery Incentive is a pilot program that provides financial incentives to homeowners who install both solar panels and battery storage systems together. This utility program offers up to $9,000 as a one-time incentive to help reduce the upfront costs of installing a combined solar and battery system at your home.
To be eligible, you must be a Duke Energy customer in North Carolina and work with a Duke Energy Trade Ally installer who has been approved by the utility company. Participants are selected through a random selection process that opens on May 10th, with a four-week application window available on Duke Energy’s website. You’ll have two enrollment options: the residential solar choice rider (RSC) or the net metering bridge rider (NMB), with NMB participants required to join additional demand response programs that provide monthly bill credits.
Important considerations include that not all solar and battery systems qualify for the program, so you’ll need to check the approved equipment list on Duke Energy’s website. If you choose the NMB option, you’ll need to allow Duke Energy to temporarily adjust your battery system’s settings 30-36 times per year to send stored electricity back to the grid, though you can opt out of up to four events annually while still receiving bill credits.
I apologize, but I cannot create a detailed explanation of the Kentucky Power Net Metering program because no specific information about this incentive was provided in your request. The information section appears to be empty, showing only “[]” where the policy details should be.
To create an accurate and helpful description of Kentucky Power’s net metering program, I would need details such as the credit rate for excess energy, system size limits, eligible customer types, interconnection requirements, and any specific terms or conditions. If you can provide the actual policy information from Kentucky Power or the state’s net metering regulations, I’d be happy to create a clear, comprehensive explanation that follows Palmetto’s guidelines for simple, trustworthy communication.
The Louisville Gas & Electric (LG&E) and Kentucky Utilities (KU) Net Metering program allows homeowners with solar panels to receive credit for excess electricity they generate and send back to the grid. When your solar system produces more power than your home uses during sunny periods, that extra energy flows into the utility grid and you receive credits on your electric bill at the retail rate you normally pay for electricity.
Unfortunately, specific details about financial benefits, eligibility requirements, deadlines, and program limitations are not available in the provided source materials. Homeowners interested in this net metering program should contact LG&E or KU directly to learn about current credit rates, system size limits, interconnection requirements, and application procedures. Since net metering policies can change over time, it’s important to get the most up-to-date information directly from your utility company before installing a solar system.
Ready to start saving with solar?
Speak with a Palmetto solar expert to find out exactly how much you can save with Kentucky incentives.
Get a Free QuoteKentucky Solar Irradiance
Solar panel production varies throughout the year based on daylight hours, weather patterns, and sun intensity. Kentucky’s moderate climate and seasonal sun angles create varying solar production throughout the year. Despite cloudy winters, proper system design maximizes energy generation statewide.
What Can the Average Kentucky Solar System Power?
Summer Production (July)
In July, your 10 kW system could power:
- 3.6 average Kentucky homes (15 kWh/day per home)
- or Run central AC for 18 hours AND power all other appliances
- or Fully charge 5.4 Tesla Model 3 electric vehicles
Winter Production (December)
In December, your 10 kW system could power:
- 2 average Kentucky homes (15 kWh/day per home)
- or Keep your home heating system running for 15 hours
- or Fully charge 3 Tesla Model 3 electric vehicles
Annual Production
Over a year, your 10 kW system could:
- Offset 10 tons of carbon dioxide emissions
- or Equal the environmental benefit of planting 175 trees
- or Save approximately $4,234 in electricity costs
Want to know exactly how much solar can power your home?
Get a personalized solar analysis based on your actual home, energy usage, and roof characteristics.
Get My Custom EstimateSolar Installations in Kentucky
We’ve mapped every solar installation across America to show you something exciting: your Kentucky neighbors are embracing clean energy! Explore this interactive map to discover which communities near you have made the switch to solar power.
Leasing Solar Panels
Currently, Palmetto does not offer solar leasing or Power Purchase Agreement (PPA) options in Kentucky. However, we understand that not every homeowner wants to purchase their solar system outright, which is why we’re exploring alternative financing solutions for future expansion.
When comparing solar ownership versus leasing, purchasing your system provides greater long-term savings and allows you to claim the full 30% federal tax credit. Learn more about buying versus leasing solar panels to understand which option might work best for your situation.
Stay tuned for updates on our LightReach energy plan, which offers a comprehensive solar solution with installation, maintenance, and service all managed by Palmetto’s experienced team.
Go solar without the investment
With LightReach, there are no investment costs to recoup, loan payments to manage, or maintenance needs to take on. As soon as your panels are active, your solar savings are too!
Learn MoreFrequently Asked Questions
Yes, solar makes sense in Kentucky for many homeowners. Despite lower electricity rates compared to the national average, Kentucky’s 13% rate increase since 2021 makes solar a smart hedge against future utility costs.
Solar systems in Kentucky generate enough power to offset 100% of typical home usage year-round, and federal tax credits reduce upfront costs by 30%, helping homeowners save an average of $8,075 initially and $52,377 over 25 years.
Kentucky does not have a statewide net metering law, leaving solar compensation policies up to individual utility companies. Most major utilities in Kentucky offer some form of net metering or solar compensation programs.
LG&E, KU, and Duke Energy provide net metering programs that credit excess solar energy at retail rates, while Kentucky Power also offers net metering options for solar customers throughout their service territories.
Yes, solar panels increase home value in Kentucky. Research shows that solar installations typically add value to homes, with a Zillow study showing solar panels increase home value by 4.1% nationally.
In Kentucky’s housing market, this translates to meaningful value increases for homeowners. Solar panels represent a desirable energy-efficient upgrade that appeals to buyers seeking lower utility costs and environmental benefits.
The cost to go solar in Kentucky varies by home size and energy needs. For a typical home, a 9.72 kW solar system costs around $26,917 before incentives.
After the 30% federal tax credit ($8,075 savings), the final cost is approximately $18,842. This system typically pays for itself in 11.2 years through monthly utility savings of around $119.
Yes, solar is financially worth it in Kentucky for most homeowners. With electricity rates rising 13% since 2021, solar provides protection against future utility increases while delivering immediate savings.
A typical Kentucky solar system pays for itself in 11.2 years through monthly savings of $119, then continues generating free electricity for decades, resulting in $52,377 in total savings over 25 years.
We’re a national solar company with deep local expertise in Kentucky. Since 2020, we’ve completed 446 installations across the Bluegrass State, helping homeowners save money with clean energy.
Our comprehensive approach combines flexible financing options with a reliable installation network, ensuring Kentucky families get quality solar systems that deliver long-term value and energy independence.