Solar Incentives in Kentucky
Kentucky homeowners considering solar in 2026 have access to two active programs. Under Kentucky's net metering law, every retail electric supplier in the state is required to make net metering available to eligible customer-generators with on-premises solar (or other qualifying renewable) systems rated at no more than 45 kilowatts that primarily serve the customer's own electricity needs. Amended in 2019 (SB 100, effective January 1, 2020), the law provides a dollar-denominated bill credit for exported electricity, but the specific credit rate is set by the Kentucky Public Service Commission on a utility-by-utility basis—rates vary by supplier and should be confirmed with your specific utility. Separately, Kentucky's Energy Project Assessment Districts (EPAD) law, enacted in 2015, allows cities, counties, and other local governments to establish districts in which owners of qualifying commercial, industrial, or multifamily (five or more units) real property can finance energy projects through a voluntary special assessment on the property, repaid over time. Residential single-family owners do not qualify for EPAD.
On the federal side, the residential Clean Energy Credit under Internal Revenue Code §25D—widely known as the 30% solar tax credit—expired for systems placed in service after December 31, 2025, under the One Big Beautiful Budget Act (Pub. L. 119-21). A homeowner installing a new residential solar system in 2026 does not qualify for that credit, which meaningfully lengthens expected payback periods compared to recent years.
Kentucky's residential electricity rate averaged approximately 14.88 cents per kilowatt-hour as of March 2026, up about 1.68 cents year-on-year. This rate level influences how much value net metering credits and self-consumed solar generation deliver over time, and payback estimates should be recalculated using current utility-specific export rates and without the federal credit.
All figures are verified as of June 2026 against official sources; programs and rates change with each legislative session and utility rate case. The Kentucky Public Service Commission (psc.ky.gov) is the authoritative source for current net metering rates and program requirements.
Federal credit update. The federal residential Clean Energy Credit (the 30% “solar tax credit” under §25D) expired for systems placed in service after December 31, 2025. New 2026 residential installs do not qualify; a 2025 install can still be claimed on a 2025 return (IRS Form 5695). What this means for 2026 →
Current solar incentives in Kentucky
Kentucky Net Metering
Kentucky statute requires every retail electric supplier to make net metering available to eligible customer-generators with on-premises solar, wind, biomass/biogas, or hydro facilities rated at not more than 45 kW that primarily supply the customer's own electricity needs. Under the 2019 amendments (SB 100, effective January 1, 2020), exported electricity is compensated as a dollar-denominated bill credit at a rate set by the Public Service Commission in utility-specific ratemaking proceedings rather than as 1:1 kWh netting; excess bill credits carry forward indefinitely but are nonrefundable and nontransferable. Customers whose systems were in service before their utility's initial PSC net metering order keep the prior 1:1 kWh-credit tariff terms at the same premises for 25 years, even if the property is sold. A supplier's obligation to add new net metering customers ends once cumulative net-metered capacity reaches 1% of its single-hour peak load.
| Amount | Dollar-denominated bill credit for exported electricity at a PSC-set, utility-specific rate (varies by utility; set in rate cases under KRS Chapter 278); legacy systems retain 1:1 kWh credits for 25 years; system cap 45 kW; aggregate cap 1% of supplier single-hour peak load. |
|---|---|
| Who qualifies | Customers of PSC-jurisdictional retail electric suppliers who own and operate an on-premises generating facility of not more than 45 kW rated capacity using solar, wind, biomass/biogas, or hydro energy, primarily to supply their own electricity requirements. |
| Administered by | Kentucky Public Service Commission / jurisdictional retail electric suppliers |
Source: KRS 278.465 through 278.468 (as amended by 2019 Ky. Acts ch. 101, SB 100, effective Jan. 1, 2020) Official source →
Energy Project Assessment Districts (EPAD / Commercial PACE)
Kentucky's 2015 EPAD law lets cities, counties, and other local governments designate Energy Project Assessment Districts in which owners of commercial, industrial, or multifamily (5+ unit) real property finance energy projects through a voluntary special assessment on the property, imposed only at the owner's request and repaid with the property tax bill. Qualifying 'energy improvements' include permanent improvements fixed to real property that generate electricity, which covers solar photovoltaic systems, as well as efficiency and water-saving measures. The statute expressly excludes residential property of fewer than five units, so this is a commercial financing tool, not a homeowner program.
| Amount | Financing amounts and terms set per project under local EPAD programs; repaid via voluntary special assessments on the property. |
|---|---|
| Who qualifies | Owners of non-residential or 5+ unit multifamily real property located in a local government that has established an EPAD program; assessment imposed only at the request of the property owner. |
| Administered by | Kentucky local governments (cities, counties, consolidated/urban-county governments) under statewide enabling statute |
Source: KRS 65.205 through 65.209 (created 2015 Ky. Acts ch. 54) Official source →
Compare solar incentives across all states → · Check what applies to you →
Programs verified as of June 2026 against official state and federal sources (each cited above); refreshed quarterly as legislatures and utility rate cases change the rules. How we verify this data. This page is informational only — not tax or legal advice.