7 factors to consider before getting solar panels in Kentucky

Kentucky doesn’t get as much sun as Southwestern states, but it still gets enough to make solar panels worth it for a lot of residents. Here’s what to consider before making the switch.

1. Solar panel installation costs
2. Your energy consumption
3. Kentucky solar incentives
4. Net metering buyback rates
5. How long you stay in your house
6. How you pay
7. The solar company you hire

1. Solar panel installation costs: $10,000 to $30,000

Average solar panel costs in Kentucky are comparable to the national average. Before the federal solar investment tax credit (ITC), a typical residential system ranges from $13,650 to $27,300. That price drops to $9,555 to $19,110 after considering the full 30% tax credit. On the high end, Jon in Vine Grove told us he paid around $87,000 for his system.

Most installers set the price according to the system's wattage, with a typical cost between $2.50 and $5 per watt. “Cost per watt” is a little like looking at the price per square foot when you buy a house. It helps you compare the value of solar energy systems in different sizes. In Kentucky, the average cost per watt is $2.73.

Average solar installation cost by system size in Kentucky

2. Your current energy consumption

Homeowners with solar panels typically save $20,000 to $90,000 over 25 years.

A typical Kentucky household needs a 11.47 kW system to offset its electricity needs with solar energy. You might need a larger or smaller system, depending on your current energy consumption. Once you know your current energy consumption, you can calculate your potential savings and the time it should take for your solar installation to pay for itself.

It’s smart to get your electrical loads as low as possible before going solar. That way, you can get a smaller system, which will be cheaper overall. If you have older electrical appliances, upgrade those before investing in solar panels.

3. Kentucky solar incentives: federal and state

Compared with other states, homeowners don’t have access to many solar incentives in Kentucky. There are, however, a few incentives for commercial and agricultural renewable energy projects.

The federal solar investment tax credit (ITC) is the most significant incentive for most homeowners going solar. The ITC provides a 30% tax credit on your total system costs, including equipment, labor and permits. It will drop to 26% in 2033 and 22% in 2034.

4. Net metering in Kentucky: retail buyback rate

Net metering lets you earn credits for the extra solar energy your system produces. These credits are applied to your next bill, based on the value of the energy in dollars. If you generate more energy than you use, the credits will roll over to future bills with no expiration.

Unlike some states, Kentucky utilities calculate excess energy in real time, meaning you get credited immediately rather than at the end of the month. Kentucky Power, Kentucky Utilities (KU) and Louisville Gas & Electric (LGE) have slightly different policies. It’s best to check with your local utility for the most up-to-date export credit rates per kilowatt-hour.

» WATT’S THE DIFFERENCE? Kilowatt (kW) vs. kilowatt-hour (kWh)

5. How long you plan to stay in your house

Solar panels last 25 to 30 years.

It takes years for electric bill savings to make up for the initial cost — about 11.5 years on average in Kentucky. If you sell your house and move before then, you might not fully realize the financial benefits of your solar investment.

A Zillow study found that, on average, houses with solar panels sell for 4.1% more. Let’s say you spend $25,000 putting solar panels on a house that costs $400,000. It might sell for $16,400 more in a few years, but you miss out on some of that $54,204 in total avoided utility costs over 25 years.

In other words, don't get solar panels just because you want to sell your house soon. Instead, consider a home improvement project with a higher return on investment, like remodeling the bathroom or kitchen.

6. How you pay

It’s great if you can pay for the whole thing upfront. You own the system from day one and receive the benefits of available tax credits. Plus, you don’t have to pay interest on a loan. Of course, cash isn’t always an option. That’s when loans and leases.

• Loans: Solar loans have relatively low interest rates. Once you pay it off, you own your system outright.
• Leases: A solar lease works like a car lease — you get to use the panels but don’t own them. Leases typically last 20 to 25 years.

» SOLAR PANELS: Leasing vs. buying

7. The solar company you hire

ConsumerAffairs has heard from thousands of solar customers who have already gone through the installation process, including several from Kentucky. In the best-case scenario, it’s easy to make the switch and you’re happy with your system’s performance. In the worst-case scenario, you end up paying thousands for midtier solar equipment from a company with poor customer service and no follow-up or support.

One of the most common complaints is related to pushy sales reps who make promises that can’t be delivered. That’s why it’s so important to thoroughly research and verify claims made by sales teams before making a decision.

We suggest using the National Renewable Energy Laboratory’s PVWatts Calculator to estimate how much electricity a solar panel can produce over a year on your house — just type in your address. Project Sunroof is a free solar savings estimator powered by Google Earth imagery.

Going solar in Kentucky

Beyond the economic factors, many people choose solar because of environmental concerns and a desire to reduce their carbon footprint. Kentucky’s traditional reliance on coal means that shifting to solar can have a positive environmental impact.

» GREENEST STATES: Kentucky ranked 45th in 2024

Is my house a good candidate for solar panels?

Going solar doesn’t work out for everybody. Here’s what to ask yourself before you commit:

• How much sunlight do I get? Kentucky averages three to four peak sun hours each day. However, lots of shading — like trees or tall buildings above your roof — could make your solar system less efficient. Solar panels need regular exposure to sunlight to produce the most energy possible.
• What is the size and angle of my roof? Kentucky (and the rest of the United States) is in the Northern Hemisphere, so solar panels perform best on south-facing roofs. The worst place to install would be on north-facing roofs, especially if those roofs have a high pitch.
• What is the condition of my roof? Solar panels are designed to last up to 30 years, so you want your roof to last just as long. Otherwise, it could cost thousands to remove the panels, fix your roof and reinstall the panels again. If you have to replace your roof, do that before you install solar panels.

Pros and cons of solar panels in Kentucky

It’s a common misconception that solar panels will completely eliminate your monthly power bill — this is not always the case. Still, you’ll likely spend less than you would for traditional utility bills over time.

Benefits of solar panels in Kentucky

• Cheaper energy bills: The average homeowner in Kentucky uses a lot of power, which adds up to a lot of savings when you switch to solar. Going solar now means that your monthly energy expenses will be more predictable (and very often significantly lower). It also protects you from future energy cost increases.
• Better for the environment: Traditional energy sources like coal and natural gas release carbon dioxide and other harmful pollutants into the air. Installing solar panels on your roof helps the environment primarily by reducing greenhouse gas emissions and dependence on fossil fuels.
• Higher home resale value: Installing solar panels can significantly increase a home's value. The exact increase in value varies by location, with homes in active solar markets sometimes seeing even higher boosts.
• More energy independence: Embracing solar paves the path toward true energy independence. It works especially well for people in areas susceptible to power outages.

Drawbacks of solar panels in Kentucky

• Solar equipment is expensive: Even with rebates and other financial incentives, the price typically starts between $10,000 and $30,000. It’s even more expensive if you want a solar battery for energy storage. Solar battery costs are generally between $7,000 and $18,000.
• Potential roof leaks: The installation process involves drilling holes into the roof to anchor the panel mounting systems. If not done correctly, this can lead to leaks or structural damage.
• Energy production varies: Solar panels are dependent on weather conditions and seasonality. Solar panels still work on cloudy days, but less available sunlight does affect how efficiently they produce energy. Snow cover may also temporarily reduce efficiency until it's removed or melts off.

» MORE: Solar energy pros and cons

Find solar companies in Kentucky

A good solar company helps you navigate local incentives, permitting and net metering policies. Compare our picks for Kentucky’s top solar companies to learn more.

Bottom line: Is going solar in Kentucky worth it for you?

Going solar might be easier than you think. The main obstacle to going solar is the high upfront cost of purchasing and installing solar panels, inverters and other equipment. Given rising energy costs in Kentucky and elsewhere, financing solar panels makes sense as long as your monthly loan payment is less than what you would be paying the utility company anyway. Solar panels essentially generate free electricity once the initial installation costs are paid for.

Solar costs vs. savings: Kentucky and nearby states