Kentucky Solar Panels

Kentucky state law requires all investor-owned utilities (IOUs) and electric cooperatives — excluding the Tennessee Valley Authority (TVA) — to offer net metering to customers with qualifying solar energy systems. The state’s net metering policy has recently been updated by SB 100, which increases the eligible system size from 30 kW to 45 kW and shifts compensation from the retail rate to a rate set by the Kentucky Public Service Commission (PSC).

Compensation rates differ by utility. LG&E and KU Energy currently offer full retail net metering, meaning excess kWh credits are valued at the same rate you pay for electricity — giving you 100% of the value of your surplus generation. Duke Energy Kentucky transitioned from full retail net metering (NM I) to Net Metering II (NM II) in January 2025, following PSC approval in November 2024. Under NM II, excess energy sent to the grid is credited at the lower “avoided cost” rate rather than the retail rate, making battery storage increasingly important for Duke Energy customers.

Customers who enrolled in net metering with LG&E or KU before September 24, 2021, may be grandfathered under older credit structures. If you are a Duke Energy Kentucky customer, review the NM II tariff carefully before going solar, as the economics differ significantly from full retail net metering. Contact your utility or visit the Kentucky PSC website for the most current rate information.

The Duke Energy PowerPair program is a pilot incentive available to Duke Energy Kentucky residential customers who install a qualifying solar panel system paired with battery storage. The program offers a one-time incentive of up to $9,000 to help offset the upfront cost of a combined solar-plus-storage system. This is currently the largest single residential solar incentive available in Kentucky for 2026.

To participate, homeowners must use a Duke Energy-approved Trade Ally installer and install qualifying equipment — not all systems are eligible. The program uses a random selection (lottery) process, with application windows opening periodically for approximately four weeks at a time. Because spots are limited, interested customers should monitor Duke Energy’s website closely for upcoming enrollment windows.

This program is particularly valuable given Duke Energy’s transition to Net Metering II (NM II), which pays customers less for excess solar energy sent to the grid. Pairing solar with battery storage allows homeowners to store and self-consume more of their solar energy, maximizing savings under the new rate structure. Visit Duke Energy’s official website for current program availability and approved equipment lists.

The LG&E and KU Solar Share program allows residential and business customers to support and benefit from local solar energy without installing panels on their own property. Customers can purchase shares of a community solar project for less than 20 cents per day and receive corresponding credits on their monthly electricity bill.

This program is ideal for renters, homeowners with shaded or unsuitable roofs, or anyone who wants to go solar without the upfront installation costs or long-term maintenance responsibilities of a private system. Shares can be secured for your home or business, and credits can even be gifted to a friend, family member, or organization of your choice.

The Solar Share program is a straightforward way to participate in renewable energy in Kentucky with minimal commitment. There are no installation requirements, no equipment to maintain, and no large upfront investment. Visit the official LG&E/KU website to check current share availability and pricing.

The Kentucky Incentives for Energy Independence program, administered by the Kentucky Economic Development Finance Authority (KEDFA), provides significant tax incentives for approved commercial and industrial facilities that construct, retrofit, or upgrade systems that generate power from renewable resources, including solar. Approved projects can receive a credit of up to 100% of Kentucky income tax and limited liability entity tax, as well as a sales tax incentive of up to 100% of Kentucky sales and use tax paid on eligible materials, machinery, and equipment used in the project.

This program is designed for businesses and commercial-scale projects, not individual homeowners. Applicants must submit a formal application to KEDFA and pay a non-refundable $1,000 application fee. Additional administrative fees can reach up to $50,000, so this program is best suited for larger commercial solar installations where the tax savings justify the administrative costs.

For businesses considering a significant solar investment in Kentucky, this program can dramatically reduce the net cost of a project. Contact the Kentucky Energy and Environment Cabinet or KEDFA directly for current program guidelines, eligibility requirements, and the application process.

Kentucky’s Commercial Property Assessed Clean Energy (C-PACE) financing program, administered by Energize Kentucky (a Greater Cincinnati Energy Alliance program), allows eligible commercial property owners to finance up to 100% of the cost of solar installations and other clean energy improvements with no down payment required. The financing is repaid over time as a voluntary assessment on the property’s tax bill, typically offering lower interest rates and longer repayment terms than conventional commercial loans.

C-PACE is currently available only for commercial properties in Kentucky — it is not available for single-family residential homes. Eligible property types include office, retail, industrial, agricultural, non-profits, and multi-family residential properties with five or more units. The program is available in counties that have passed enabling C-PACE legislation, including Jefferson, Bullitt, Nelson, Boone, Pendleton, and Lincoln counties, among others.

Because the repayment is tied to the property rather than the owner, C-PACE financing can transfer to a new owner if the property is sold, which can be an attractive feature for commercial real estate investors. Visit kypace.org to check county eligibility, learn about qualifying projects, and begin the application process.

The USDA Rural Energy for America Program (REAP) provides financial assistance to agricultural producers and small businesses located in eligible rural areas to purchase and install renewable energy systems, including solar photovoltaic (PV) systems. Grants can cover up to 25% of total eligible project costs using base Farm Bill funds, or up to 50% for projects funded through Inflation Reduction Act (IRA) REAP allocations. Grant amounts for renewable energy systems can range from $1,500 up to $1 million per project. Guaranteed loan financing is also available for larger projects.

To be eligible, applicants must be either an agricultural producer with at least 50% of gross income from agricultural operations, or a small business located in a rural area with a population of 50,000 or fewer. As of 2026, the USDA is not currently accepting new REAP grant applications, but guaranteed loan applications may still be submitted. Applicants should monitor the USDA website for updates on grant application windows.

Kentucky farmers and rural business owners should also be aware of the Kentucky Agricultural Development Fund On-Farm Energy Efficiency Incentives Program, a complementary state-level program that can provide up to 50% reimbursement (maximum $10,000) for qualifying energy-saving equipment, including solar panels. These two programs can potentially be combined to significantly reduce the net cost of a farm solar installation.

The Kentucky Agricultural Development Fund (KADF) On-Farm Energy Efficiency Incentives Program is a state-level program that incentivizes Kentucky farm owners to improve the energy efficiency of their existing equipment or facilities. Solar panels are explicitly listed as eligible equipment under this program. Qualifying applicants may receive up to 50% reimbursement for the cost of an eligible energy-saving item, with a maximum reimbursement of $10,000 per project.

This program is designed specifically for Kentucky farm owners and operators, making it a valuable complement to federal programs like USDA REAP. The combination of KADF reimbursement and REAP grants or loans can substantially reduce the out-of-pocket cost of a farm solar installation. Applicants should review current program guidelines for eligible equipment categories and application requirements.

For more information on eligibility, application procedures, and current funding availability, contact the Kentucky Agricultural Development Board or visit the Kentucky Energy and Environment Cabinet’s incentives page. Funding availability may vary year to year based on the state agricultural development budget.

The City of Louisville’s Go Green Loan Program provides below-market-rate financing to small businesses and agribusinesses in Louisville to support investments in solar energy and energy efficiency. Small businesses can borrow up to $50,000, while agribusinesses are eligible for loans up to $100,000. Funds can be used for installing solar panels, making energy-efficiency upgrades, or for businesses that create green products or services.

This program is administered by the City of Louisville’s Office of Sustainability and is intended to help local businesses reduce energy costs, lower their carbon footprint, and create green jobs in the Louisville area. The below-market interest rate makes this a cost-effective financing option compared to conventional commercial loans, particularly for smaller businesses that may not qualify for larger programs like C-PACE.

Eligibility is limited to businesses operating within Louisville/Jefferson County. Interested applicants should contact the Louisville Office of Sustainability directly or visit the official Louisville sustainability website for current interest rates, application requirements, and program availability, as funding is subject to availability.

Kentucky’s Solar for All (SFA) program is a newly funded initiative designed to expand access to solar energy for low-income households, particularly those with high energy burdens — meaning households that spend a disproportionately large share of their income on energy costs. The program provides financial assistance to help qualifying residents access solar energy benefits that would otherwise be out of reach.

The program is designed to integrate with existing assistance programs such as heating energy assistance (LIHEAP), disaster housing support, and weatherization programs to maximize impact and improve household energy resilience. By combining solar access with these existing support structures, Solar for All aims to reduce energy costs and lower emissions for Kentucky’s most vulnerable residents.

As this is a newly funded program, specific details regarding application processes, funding amounts, and eligibility criteria are still being finalized. Low-income Kentucky households interested in this program should monitor the Kentucky Energy and Environment Cabinet’s website for updates on program launch dates and how to apply.