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 eligible system size has been increased from 30 kW to 45 kW under SB 100, and compensation rates are overseen by the Kentucky Public Service Commission (PSC). LG&E and KU Energy currently offer full retail net metering, meaning excess energy you send to the grid is credited at the same rate you pay for electricity — the best possible outcome for solar owners.

Duke Energy Kentucky transitioned to Net Metering II (NM II) in January 2025, following PSC approval in November 2024. Under NM II, excess energy is credited at the lower “avoided cost” rate rather than the full retail rate, making battery storage more valuable for Duke customers. Importantly, customers who installed solar before January 2025 are grandfathered into the original full retail rate for 25 years. Kentucky Power similarly reduced its net metering credit for new customers to approximately $0.09/kWh, slightly below the full retail rate.

If you are served by LG&E or KU Energy, net metering remains a strong financial benefit. If you are a Duke Energy or Kentucky Power customer installing a new system in 2026, pairing your solar panels with battery storage is strongly recommended, as storing excess energy for self-consumption is now more valuable than exporting it to the grid at the reduced avoided-cost rate.

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. The program provides a one-time upfront incentive of up to $9,000 to help offset the cost of a combined solar-plus-storage system, making it the largest single residential solar incentive currently available in Kentucky for 2026.

To be eligible, homeowners must use a Duke Energy-approved Trade Ally installer and install qualifying equipment — not all systems or installers qualify. The program operates on a lottery (random selection) basis, with application windows opening periodically for approximately four weeks at a time. Because spots are limited, interested customers should monitor Duke Energy’s official website closely for upcoming enrollment windows and act quickly when they open.

Given that Duke Energy Kentucky has also moved new solar customers to the lower Net Metering II (avoided cost) compensation rate, the PowerPair incentive is especially well-timed — pairing battery storage with solar allows you to maximize self-consumption of your solar energy rather than exporting it at reduced rates. Visit Duke Energy’s official PowerPair page to check current program availability, approved equipment lists, and upcoming enrollment windows.

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. This is an ideal solution for renters, homeowners with shaded or unsuitable roofs, or anyone who wants to support local solar generation without the upfront cost and maintenance of a private rooftop system.

Customers purchase shares of a local community solar project for less than 20 cents per day, with a monthly subscription fee of $5.55 per share and no start-up costs. In return, participants receive corresponding bill credits each month based on the energy their shares produce. The monthly fee may change over time, but only if approved by the Kentucky Public Service Commission.

The Solar Share Program is open to LG&E and KU Energy residential and business customers. It provides a straightforward, low-commitment way to participate in solar energy and reduce your effective electricity costs without any installation, permitting, or long-term maintenance responsibilities. Visit the official LG&E/KU Solar Share page to learn more and sign up.

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 photovoltaic (PV) systems. This is a business-facing incentive and is not available to residential homeowners.

Approved projects can receive a credit of up to 100% of Kentucky income tax and limited liability entity tax attributable to the project, 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. These incentives can dramatically reduce the net cost of a commercial solar installation.

Businesses interested in this program must apply for and receive approval from KEDFA before beginning their project. For full eligibility requirements, application details, and current program guidelines, contact the Kentucky Cabinet for Economic Development or visit the Kentucky Energy and Environment Cabinet’s incentives page.

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 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 range from $1,500 up to $1 million per project, with guaranteed loan financing 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 — check the USDA’s official website for the latest status on grant application windows.

Kentucky farmers and rural business owners can potentially combine REAP funding with the Kentucky Agricultural Development Fund (KADF) On-Farm Energy Efficiency Incentives Program to significantly reduce the net cost of a solar installation. Consulting with a USDA Rural Development office in Kentucky is recommended to understand current availability and application requirements.

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, making it a valuable resource for Kentucky farmers looking to reduce energy costs with solar.

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 means a farm solar installation costing $20,000 or more could qualify for the full $10,000 reimbursement, cutting the out-of-pocket cost in half.

This program can potentially be combined with USDA REAP grants or loans to further reduce the net cost of a farm solar installation, making it one of the most powerful combinations available to Kentucky agricultural producers. Contact the Kentucky Agricultural Development Board or the Kentucky Energy and Environment Cabinet for current application details, eligibility requirements, and funding availability.

The City of Lexington has relaunched the Solarize Lexington program, which offers homeowners and other property owners a 20% discount on solar panel installation through a partnership with a vetted local solar installer. The program uses a group-purchasing model to negotiate wholesale rates, passing the savings directly to participants — no special qualifications or income limits required.

The program is open to all homeowners in the Lexington-Fayette County MSA, including residents of Bourbon, Clark, Fayette, Jessamine, Scott, and Woodford Counties. Non-profits, small businesses, and places of worship are also welcome to apply, making this one of the more broadly accessible local solar programs in Kentucky.

Important deadlines for 2026: Interest forms must be completed by October 2, contracts must be in place by October 16, and installation must be completed by the end of 2026. Visit the official Solarize Lexington page on the City of Lexington’s website to submit an interest form and learn more about the program.

Launched on Earth Day 2026, Solarize Louisville is the Mayor’s Office of Sustainability’s 5th annual Solarize campaign, run in partnership with Solar Kentucky. The program gives Louisville-area residents, small businesses, non-profits, and places of worship bulk-purchasing power to obtain discounted wholesale rates for solar installation. Pure Power Solar has been selected as the vetted installer for the 2026 campaign.

By aggregating demand from many participants, Solarize Louisville negotiates lower prices than individual homeowners could typically obtain on their own. There are no upfront fees to join — participants simply sign up for a free estimate and, if they choose to proceed, contract directly with the approved installer at the discounted group rate.

Enrollment is open until October 1, 2026. To learn more, sign up for a free estimate, or get current pricing information, visit the official Solarize Louisville website at www.SolarizeLouisville.com or contact the Mayor’s Office of Sustainability through the City of Louisville’s official website.

Property Assessed Clean Energy (PACE) financing is available in select jurisdictions within Kentucky, allowing eligible property owners to finance the purchase and installation of solar energy systems with no upfront out-of-pocket expenses, including no down payment. Rather than taking out a traditional loan, the financing is repaid through a voluntary assessment added to the property’s tax bill over time.

PACE financing is particularly useful for property owners who may not qualify for traditional financing or who prefer to spread the cost of solar over a longer period. For commercial property owners, PACE can cover up to 100% of eligible clean energy improvement costs. Residential PACE availability varies by jurisdiction within Kentucky, so it is important to confirm whether your specific location is eligible.

While PACE financing does not reduce the overall cost of going solar, it removes the barrier of a large upfront payment and can make solar accessible to a wider range of property owners. Contact the Kentucky Energy and Environment Cabinet or your local government to determine whether PACE financing is available in your jurisdiction and to find approved PACE providers.