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-plus-battery storage system. The program offers a one-time incentive of up to $9,000 to help offset the upfront cost of the combined system. The solar incentive is calculated at $0.36 per watt for solar panels up to 10 kW-AC (maximum $3,600), while the battery storage incentive is $400 per kWh for up to 13.5 kWh of storage (maximum $5,400).

To be eligible, homeowners must use a Duke Energy-approved Trade Ally installer and install qualifying equipment — not all systems are eligible. Applications must be submitted within 90 days of the system’s operational date, and the system must not exceed 20 kW. Enrollment is subject to a lottery/random selection process, with application windows opening periodically for approximately four weeks at a time.

This is currently the largest single residential solar incentive available in Kentucky for 2026. For questions or to apply, contact [email protected]. Because Duke Energy Kentucky now credits excess solar energy at the lower “avoided cost” rate under Net Metering II, pairing solar with battery storage is especially valuable for Duke Energy customers.

Kentucky state law (S.B. 100) requires all investor-owned utilities and electric cooperatives — excluding TVA-served utilities — to offer net metering for qualifying solar systems up to 45 kW. The credit structure is set by the Kentucky Public Service Commission (PSC) on a utility-by-utility basis. LG&E and KU Energy offer full retail net metering, meaning every excess kWh you send to the grid earns a credit at the same rate you pay for electricity — giving you 100% of the value of your surplus solar energy. Customers who enrolled with LG&E or KU before September 24, 2021, may be grandfathered under older credit structures.

Duke Energy Kentucky transitioned to Net Metering II (NM II) in January 2025. Under NM II, excess energy sent to the grid is credited at the lower “avoided cost” rate rather than the full retail rate. This makes battery storage increasingly important for Duke Energy customers, as storing solar energy for self-consumption is more financially beneficial than exporting it to the grid.

TVA-served utilities in western Kentucky (including Gibson, Pennyrile, Tri-County, Warren, and West Kentucky) are not required by state law to offer net metering, though some may do so voluntarily. Municipal electric utilities are similarly not mandated but may offer their own programs. Homeowners should contact their specific utility provider to confirm current net metering terms and compensation rates.

The LG&E and KU Solar Share Program is a community solar option that allows residential, business, and industrial customers to benefit from solar energy without installing panels on their own property. Customers purchase shares of a local community solar project for less than 20 cents per day and receive corresponding credits on their monthly electricity bill based on the energy their shares produce.

This program is ideal for renters, homeowners with shaded or structurally unsuitable roofs, or anyone who wants to participate in solar energy without the upfront installation costs or long-term maintenance responsibilities of a private system. Solar Share credits can even be gifted to a friend, family member, or organization of your choice, making it a flexible and accessible way to go solar in Kentucky.

The Solar Share Program is administered by LG&E and KU Energy and is available to customers within their service territories. There is no installation required, no long-term maintenance commitment, and participation can begin with a minimal financial commitment. Contact LG&E/KU or visit their 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 — it is not available to individual homeowners. Businesses must apply for and receive approval from KEDFA before beginning their project in order to be eligible for the incentives. The program is intended to encourage large-scale renewable energy investment in the state.

Businesses interested in this program should apply through the Kentucky Business Investment (KBI) portal at kbideals.ky.gov. Given the complexity of the application and approval process, it is advisable to consult with a tax professional or energy advisor familiar with Kentucky commercial incentive programs before proceeding.

The federal Commercial Solar Investment Tax Credit (ITC) under Section 48E of the Internal Revenue Code provides a 30% tax credit for businesses that install solar energy systems on commercial properties. Unlike the residential ITC — which was eliminated by the Big Beautiful Bill signed on July 4, 2025 — the commercial ITC remains in place and is currently available through the end of 2032.

All non-tax-exempt businesses, including LLCs, S-corps, C-corps, and partnerships, are eligible for this credit when they install qualifying solar systems on commercial buildings. The credit applies to the full installed cost of the solar system, including equipment and labor, and can significantly reduce the net cost of a commercial solar installation in Kentucky.

Tax-exempt entities such as nonprofits, municipalities, and schools may be able to access the value of this credit through the IRA’s direct pay (elective pay) provisions. Businesses should consult a qualified tax professional to determine eligibility and how to properly claim the credit on their federal tax return.

The USDA Rural Energy for America Program (REAP) provides grants and guaranteed loans to agricultural producers and rural small businesses to help finance the purchase and installation of renewable energy systems, including solar panels. Grant amounts for renewable energy systems can range from $1,500 up to $1 million per project, with some grants covering up to 25% of total project costs. 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 can potentially combine REAP funding with the Kentucky Agricultural Development Fund On-Farm Energy Efficiency Incentives Program to significantly reduce the net cost of a solar installation. Contact your local USDA Rural Development office or visit the official REAP website for the most current application status and eligibility requirements.

The Kentucky Agricultural Development Fund (KADF) On-Farm Energy Efficiency Incentives Program is a state-level program that incentivizes Kentucky farm owners to increase the energy efficiency of their operations. Solar panels are among the qualifying energy-saving items under this program. Eligible applicants may receive up to 50% reimbursement for a qualified energy-saving item, with a maximum reimbursement of $10,000 per applicant.

This program is available to Kentucky farm owners and is designed to complement federal programs like USDA REAP. When combined, these two programs can significantly reduce the net cost of a farm solar installation. Applicants should ensure their solar equipment and installation meet the program’s qualifying criteria before applying.

For more information on eligibility requirements, qualifying equipment, and how to apply, visit the Kentucky Energy and Environment Cabinet’s website or contact the Kentucky Agricultural Development Fund directly. This program represents one of the few state-level financial incentives available to Kentucky residents for solar energy in 2026.

Kentucky’s Property Assessed Clean Energy (PACE) Financing program — also known as EPAD (Energy Project Assessment District) — allows eligible commercial property owners to finance up to 100% of the cost of solar energy systems and other clean energy improvements with no down payment or out-of-pocket expenses. The financing is repaid over time through a voluntary property tax assessment on the property, making it an accessible option for businesses that want to go solar without large upfront capital outlays.

PACE financing is administered in Kentucky by Energize Kentucky, a program of the Greater Cincinnati Energy Alliance. It is currently available to commercial property owners in participating jurisdictions within Kentucky — not all areas of the state are eligible. Residential PACE financing is not available in Kentucky at this time.

Because PACE financing is tied to the property rather than the owner, it can transfer to a new owner if the property is sold, which may be an important consideration for business owners. Interested commercial property owners should contact Energize Kentucky to determine whether their property is located in a participating jurisdiction and to learn more about the application process and terms.

Solarize Louisville is a group purchasing program that allows homeowners in the Louisville/Jefferson County area and surrounding counties to access discounts of 12% to 18% on solar panel installations by leveraging collective buying power. The program is open to homeowners in Jefferson, Oldham, Spencer, Shelby, and Bullitt counties in Kentucky, as well as Harrison, Floyd, and Clark counties in Indiana.

By joining a group of neighbors and community members purchasing solar together, participants can negotiate lower prices from pre-vetted, qualified solar installers. This makes solar more affordable without requiring any state or federal tax credit, which is especially valuable in 2026 now that the residential federal ITC has been eliminated.

The program is administered through the City of Louisville’s Office of Sustainability. Homeowners interested in participating should visit the official Solarize Louisville website to check current program availability, sign up for updates, and learn about the selected installer and pricing for the current campaign round.