Kentucky Solar Panels

The Duke Energy PowerPair program is a pilot incentive available exclusively to Duke Energy Kentucky residential customers who install a qualifying solar panel system paired with battery storage. It provides a one-time upfront incentive of up to $9,000, making it the largest single residential solar incentive currently available in Kentucky for 2026.

The incentive is broken into two parts: $0.36 per watt for solar panels up to 10 kW-AC (capped at $3,600 per residence), and $400 per kWh for battery storage up to 13.5 kWh of total capacity (up to $5,400). To be eligible, homeowners must use a Duke Energy-approved Trade Ally installer and install qualifying equipment, and participants must enroll in either Duke Energy’s Solar Choice Tariff or Bridge Rate.

The program operates on a lottery (random selection) basis, with application windows opening periodically for approximately four weeks at a time. Because funding is capacity-limited, interested homeowners should apply during open enrollment windows and be prepared for a possible waitlist.

Net metering is mandated by the Commonwealth of Kentucky for all investor-owned utilities and electric cooperatives, with the exception of the Tennessee Valley Authority (TVA). Kentucky first established net metering in 2008 for systems up to 30 kW, and a 2019 law raised the maximum eligible system size to 45 kW while shifting the credit structure to a dollar-value-based system with rates set by the Kentucky Public Service Commission (PSC).

Compensation rates vary by utility. LG&E and KU Energy currently offer full retail net metering, crediting every excess kWh at the same rate customers pay for electricity. Duke Energy Kentucky transitioned to its Net Metering II (NM II) tariff in January 2025, crediting excess energy at the lower avoided-cost rate, and Kentucky Power similarly credits exports at a reduced rate of approximately $0.09/kWh.

Customers who installed their solar systems before January 2025 are grandfathered into the original full-retail (NM I) compensation rate for 25 years. For customers on reduced avoided-cost tariffs, pairing solar with battery storage for self-consumption is generally more valuable than exporting excess energy to the grid.

Property Assessed Clean Energy (PACE) financing allows eligible property owners to finance the full cost of installing solar energy systems with no upfront out-of-pocket expense. The financing is repaid through a voluntary special assessment added to the property’s tax bill over time, with repayment terms extending up to 25 years to match the useful life of the improvement.

Because PACE financing is secured by the special assessment on the property, no personal or business guarantees are required, and the obligation is tied to the property rather than the owner. In Kentucky, PACE is administered by Energize Kentucky, a Greater Cincinnati Energy Alliance program.

PACE financing is currently available only to commercial customers and only in certain jurisdictions within Kentucky. Counties with C-PACE legislation include Jefferson, Bullitt, Nelson, Boone, Pendleton, and Lincoln. It is not available for residential rooftop solar.

The USDA Rural Energy for America Program (REAP) provides financial assistance to agricultural producers and small businesses in eligible rural areas to purchase and install renewable energy systems, including solar PV. 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 allocations, with grant amounts ranging from $1,500 up to $1 million per project.

Eligible applicants are agricultural producers who derive at least 50% of their gross income from agricultural operations, as well as small businesses located in eligible rural areas. Both small and large solar generation systems qualify as eligible technologies.

As of 2026, the USDA is not consistently accepting new REAP grant applications, though guaranteed loan applications may still be submitted. Prospective applicants should check the USDA Rural Development Kentucky page for current application windows and deadlines.

The Kentucky Agricultural Development Fund (KADF) On-Farm Energy Efficiency Incentives Program is a state-level program that operates alongside the federal REAP program to help Kentucky farm owners invest in energy improvements for existing equipment or facilities. Solar panels are among the eligible items under the program.

Qualified applicants may receive up to 50% reimbursement for an eligible energy-saving item, up to a maximum reimbursement of $10,000 per project. This reimbursement can be combined with other agricultural energy programs to significantly reduce the net cost of a farm solar installation.

The program is targeted at Kentucky farm owners and is administered through the Kentucky Cabinet for Economic Development and related agricultural agencies. Farmers should verify current funding availability and application requirements before beginning a project.

Solarize Louisville is a bulk-purchasing campaign led by the Louisville Mayor’s Office of Sustainability in partnership with Solar Kentucky (formerly the Kentucky Solar Energy Society). By aggregating demand and working with a pre-vetted local installer, the program helps participants secure discounted wholesale pricing of roughly 15-20% on solar installations.

The campaign is open to all homeowners in Louisville/Jefferson County and surrounding counties. Since launching in 2022, more than 300 Louisville properties have gone solar through the program.

Enrollment for the current campaign runs through October 1, 2026, and the discounted pricing expires the same date. Interested homeowners can sign up for a free estimate and current pricing through the official Solarize Louisville channels or the City of Louisville’s website.

Solarize Lexington is a community group-purchasing campaign that connects households with a vetted solar installer and provides a discounted rate of up to 20% on solar installations. New for 2026, the program includes all six counties in the Lexington-Fayette County MSA: Bourbon, Clark, Jessamine, Scott, Woodford, and Fayette.

The program is designed to make going solar simpler and more affordable by leveraging collective buying power. In 2022, Lexington also provided $1 million in one-time grant funding to cover 100% of solar installation costs for qualified low- and moderate-income homeowners.

For the 2026 campaign, interest forms must be completed by October 2, contracts must be in place by October 16, and installations must be completed by the end of 2026. Homeowners can learn more and enroll through the City of Lexington’s sustainability website.

Kentucky’s Solar for All (SFA) program is supported by a $62.4 million grant awarded through the Inflation Reduction Act’s Greenhouse Gas Reduction Fund. The program is designed to deliver affordable solar energy to eligible low-income households while creating new jobs in the renewable energy sector.

The program prioritizes families in Eastern and Western Kentucky, including households in disaster recovery housing, Low Income Home Energy Assistance Program (LIHEAP) customers, and recently weatherized households in high energy-burden regions. It uses financial assistance models combined with workforce development programming to expand solar access.

Administered by the Kentucky Energy and Environment Cabinet, the program coordinates with existing low-income energy assistance, disaster housing, and weatherization efforts to identify priority households. Eligible residents should watch for program rollout details through the Cabinet’s website.

The Kentucky Incentives for Energy Independence program is administered by the Kentucky Economic Development Finance Authority (KEDFA). It provides significant tax incentives for approved commercial and industrial facilities that construct, retrofit, or upgrade systems generating power from renewable resources, including solar.

Approved projects can receive a credit of up to 100% of Kentucky income tax and a sales tax incentive of up to 100% of Kentucky sales and use tax paid on eligible materials, machinery, and equipment. This makes it a substantial incentive for qualifying large-scale renewable energy investments.

This is a business-facing incentive and is not available to residential homeowners. Companies considering a qualifying project should contact KEDFA to review approval requirements and application procedures.