Kentucky Solar Incentives, Cost & Policy Guide (2026)

Cost and savings of solar in Kentucky

While state-specific public pricing data from LBNL's Tracking the Sun dataset is currently limited for Kentucky, a home using the state average of 13,481 kWh/year typically requires a10.00 kW solar array to offset its energy consumption.

Because major utilities like LG&E and KU now value exported solar energy at around 7.1¢ to 7.5¢ per kWh (roughly half the standard 14.26¢/kWh retail rate), maximizing the energy you use directly in your home ("self-consumption") drastically improves your financial return. Every kilowatt-hour you pull directly from your panels saves you the full utility rate.

Net metering and utility rules

Kentucky's net metering framework does not mandate a single credit rate for all homeowners. Instead, the Kentucky Public Service Commission (PSC) dictates that each electric utility must file its own net metering tariff.

For the two largest investor-owned utilities—Louisville Gas and Electric (LG&E) and Kentucky Utilities (KU)—the PSC has approved updated Net Metering Service tariffs (NMS-2) that went into effect recently. Instead of 1:1 energy trading, these utilities compensate exported electricity with a dollar-denominated bill credit. This credit applies only to your energy charges, not to fixed basic service charges, and currently sits well below the standard retail rate.

Effective February 16, 2026: KU's NMS-2 dollar-denominated bill credit is $0.07534 per kWh exported (PSC Case No. 2025-00113); LG&E's NMS-2 credit is $0.07089 per kWh exported (PSC Case No. 2025-00114). Both are set case-by-case in utility rate proceedings, not fixed by statute, and can change in future PSC rate cases. Legacy NMS-1 customers (systems in service before September 24, 2021) instead receive a kWh-for-kWh billing-period credit at their standard retail rate until NMS-1 is phased out on September 24, 2046, at which point they transition to NMS-2.