Lexington, KY Solar Panels
Solar Power in Lexington
If you live in Lexington and have watched your electricity bill climb, you are not alone. Kentucky electricity prices have increased 19% from 2020 to 2024, leaving many Bluegrass homeowners searching for a smarter way to power their homes. Solar installation offers a way to own your energy production and keep more money in your pocket each month.
By choosing solar panel installation in Lexington, you own your system outright, keep the full utility-bill savings, and add value to your home. To understand how it all works, explore our guide on home solar panels as you read on.
How Much Do Solar Panels Cost in Lexington, KY?
See real solar costs for Lexington, built from our actual installations across Beaumont, Hamburg, Chevy Chase, Andover, and nearby neighborhoods. This calculator uses firsthand local data to show what owning your system could cost—and save—so you can explore your options with clear, honest numbers.
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Key Takeaways
- Kentucky electricity prices rose 19% from 2020 to 2024, so owning solar panels in Lexington lets you generate your own power and protect against future rate hikes.
- A typical Lexington home can save around $37,000 over 25 years by purchasing solar outright, owning the panels, and keeping the full utility-bill savings.
- State and local incentives still apply, including Kentucky net metering and Solarize Lexington group discounts of up to 20% for homeowners.
Lexington Electricity Prices
If you live in Lexington and have watched your electricity bill climb, you are not alone. Costs keep rising across Fayette County.
Kentucky Utilities customers have seen prices increase roughly 13% from 2021 to 2024, climbing from 11.5 to 13.0 cents per kWh. While still below the national average, that steady rise adds up for Lexington homeowners.
Solar installation in Lexington offers a way to take control. When you purchase and own your system outright, you generate your own power and reduce your reliance on utility rates that keep climbing each year.
Over time, solar panel installation in Lexington, KY can protect you from future rate increases. You own the panels, keep the full utility-bill savings, and add lasting value to your Bluegrass home.
Price of Energy: Kentucky vs National Average
Lexington Area Utility Providers
If you live in Lexington, your electricity likely comes from Kentucky Utilities (KU). In 2023, KU charged about 12.0¢ per kWh—below the national average of 16.0¢ and just under Kentucky’s state average of 12.70¢.
Lexington’s relatively low rates reflect Kentucky’s reliance on affordable in-state energy sources. Still, 2023 figures show KU’s price closely tracks the state average, and utility rates tend to rise gradually over the years.
With solar panel installation in Lexington, you own your system outright and produce your own power. To see how it works, explore our guide on home solar panels.
Lexington Utilities Electricity Rates
Kentucky Solar Incentives
Lexington homeowners have access to several state and local programs that help lower the cost of owning solar. Explore the solar incentives in Kentucky below.
These programs come in a few forms. Duke Energy Kentucky’s PowerPair rebate and Kentucky net metering reward everyday homeowners, while Solarize Lexington offers group-buy discounts. PACE financing and state tax incentives support commercial and industrial projects.
While the federal 30% residential tax credit was eliminated by the Big Beautiful Bill, these state and local incentives remain and are worth exploring.
| Incentive | Type | Description | Source |
|---|---|---|---|
| Kentucky Net Metering | Net Metering | State-mandated net metering allows solar customers to receive bill credits for excess electricity sent to the grid, with credit rates varying by utility. | Learn More |
| Property Assessed Clean Energy (PACE) Financing | Financing | Commercial PACE financing lets eligible property owners finance 100% of a solar project’s cost, repaid through a voluntary assessment on the property tax bill. | |
| Solarize Lexington | Bulk Purchase Discount | A group-purchasing campaign offering homeowners in the Lexington-Fayette MSA a discounted solar rate of up to 20% through a vetted installer. | Learn More |
| Kentucky Incentives for Energy Independence | Tax Credit | State tax and sales tax incentives of up to 100% for approved commercial and industrial renewable energy facilities. | Learn More |
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, which serves Lexington, currently offer full retail net metering, crediting every excess kWh at the same rate customers pay for electricity.
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.
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.
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.
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 QuoteLexington Solar Irradiance
Solar panel production varies throughout the year based on daylight hours, weather patterns, and sun intensity. Understanding how seasons affect your solar system helps set realistic expectations for your investment.
Lexington enjoys four distinct seasons, with sunny summers and cooler, cloudier winters. Despite occasional gray days, its solar potential is strong. Like Boston or Seattle, the right system performs beautifully here year-round.
Solar Production in Lexington by Month
What Can Your Solar System Power?
Summer Production (July)
In July, your 10 kW system could power:
- 3.6 average 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 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 Panel Systems in Lexington
We’ve mapped solar installations across the country, right down to the neighborhood. Explore this interactive heatmap to see how many Lexington homeowners have already switched to solar. Click any hexagon to discover the installations near you—and see how your community is embracing clean energy.
Frequently Asked Questions
Yes, Lexington homeowners have access to net metering through a state mandate that applies to Kentucky Utilities (KU), the main provider in Fayette County. It lets you earn bill credits for the extra electricity your solar panels send back to the grid.
KU currently offers full retail credit, so each excess kilowatt-hour is valued at the same rate you pay for power. Systems up to 45 kW qualify, and installations completed before January 2025 are grandfathered into the original rate for 25 years.
Yes. In Lexington, solar panels can raise your home’s resale value when you own the system outright. Because you own the panels, the added value belongs to you—not a third party.
A Zillow study found homes with solar sell for about 4.1% more. For Bluegrass homeowners, that means lower utility bills today and a valuable asset when it’s time to sell.
Purchasing solar outright in Lexington typically costs about $21,500 for an average 6.80 kW system, or roughly $3.16 per watt. Smaller and larger homes generally range from about $16,900 to $27,500, depending on your roof and energy needs.
When you buy your system, you own the panels and keep the full utility-bill savings. Note that the federal 30% residential tax credit was eliminated by the 2025 federal law change. For pricing based on your home size, use the calculator above.
Lexington homeowners can tap several state and local solar incentives. Kentucky net metering lets you earn bill credits for excess power sent to the grid, and Solarize Lexington offers group-buy discounts of up to 20% through a vetted installer.
Additional programs like PACE financing and Kentucky Incentives for Energy Independence support commercial and industrial projects. Note that the federal 30% residential tax credit was eliminated by the 2025 federal law and no longer applies.
Yes. Solar panels work well in Lexington’s climate. The area averages about 4.7 peak sun hours per day and enjoys four distinct seasons, with sunny summers and cooler, cloudier winters. Panels still generate power on overcast days, just at reduced output.
Production naturally varies by season. A typical system produces the most in June and July and the least in December, when daylight hours are shortest. Over a full year, these seasonal swings balance out to reliable energy for Bluegrass homes.
Solar panels are low maintenance. With no moving parts, they need very little attention beyond an occasional visual inspection to keep them clear of debris, leaves, or heavy snow after Lexington’s winter storms.
Because you own your system, your panels and inverter are protected by manufacturer warranties that typically cover performance for decades. Kentucky’s regular rainfall also helps rinse away dust and pollen, keeping your panels producing efficiently year-round.