In Kentucky, a typical residential solar panel system costs $9,154 to $26,285, depending on the size of your system and what financial incentives you qualify for.
Jump to insightThe 30% federal solar investment tax credit (ITC) is the best financial incentive for most Kentucky homeowners to buy solar panels. A new Solar for All program should eventually expand solar access to low-income households.
Jump to insightThrough net metering, Kentucky residents can earn credits when they send excess solar power into the local grid.
Jump to insightResidential solar panel incentives in Kentucky
The federal solar investment tax credit (ITC) is currently the best incentive for a lot of homeowners buying solar panels in Kentucky. It reduces your federal tax liability by 30% of how much it costs to install solar panels.
For example, if you spend $10,000 installing a solar panel system, the ITC is worth $3,000. If in the year your system becomes operational you owe $15,000 in taxes, the ITC reduces what you owe to $12,000.
Federal solar tax credit expires at the end of 2025
The ITC is now set to expire at the end of the year, much earlier than previously scheduled. The credit was expected to drop gradually, then fully expire in 2035 — but those future step-downs have been eliminated under the “One Big Beautiful Bill,” signed in July of 2025. This means you have until Dec. 31, 2025, to install and pay for a system to qualify for the 30% credit.
Solar for All
Kentucky's newly funded Solar for All (SFA) program will expand access to solar energy for low-income households through financial assistance, focusing on those with high energy burdens. By integrating with existing programs like heating energy assistance, disaster housing and weatherization, the initiative should increase resilience, reduce energy costs and lower emissions.
Additional solar incentives in Kentucky
Compared with other states, Kentucky homeowners don’t have access to as many financial incentives for going solar. There are, however, a few incentives for commercial and agricultural renewable energy projects.
| Incentive type | Amount | Eligible solar equipment | Applicable sectors | Administrator | |
|---|---|---|---|---|---|
| Tax Exemption for Large-Scale Renewable Energy Projects | Sales tax exemption | Up to 100% of sales and use tax | Solar panels, solar thermal electric | Commercial | Kentucky Department of Revenue |
| Energy Efficiency Loans for State Government Agencies | Loan program | Varies | Solar panels,solar water heat | State government | Finance and Administration Cabinet |
| On-Farm Energy Efficiency Program | Grant program | Up 50% of cost, not to exceed $10,000 for a single program year | Solar water heat and solar-powered watering systems | Up 50% of cost, not to exceed $10,000 for a single program year | County Agricultural Development Councils, Governor's Office of Agricultural Policy |
| Tax Exemption Machinery for New and Expanded Industry | Sales and use tax exemption | Up to 100% | Solar panels | Commercial, federal government | Kentucky Department of Revenue |
What to know about net metering in Kentucky
Kentucky's net metering policy allows you to 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. Unlike some states, Kentucky calculates excess energy in real-time, meaning you get credited immediately rather than at the end of the month.
The state expanded its net metering law in 2008, requiring utilities to offer this service for systems up to 30 kilowatts (kW). Under a 2019 law, the maximum system size was increased to 45 kW, and the credit structure changed from a kWh-based to a dollar-value-based system, with rates set by the Kentucky Public Service Commission (PSC).
» WATT’S THE DIFFERENCE? Kilowatt vs. kilowatt-hour
How much are solar panels in Kentucky?
After the federal solar tax credit, solar panel costs in Kentucky typically range from $9,154 to $18,309. Leasing is cheaper upfront, but you won’t be eligible for the federal solar tax credit.
Your system size greatly affects how much you pay overall. The typical system size for solar systems in Kentucky is 7.3 kW (kilowatts). You might need a larger or smaller system, depending on your average household energy usage.
Average solar cost by system size in Kentucky
| 5 kW | 6 kW | 7 kW | 8 kW | 9 kW | 10 kW | |
|---|---|---|---|---|---|---|
| Before federal tax credit | $13,143 | $15,771 | $18,400 | $21,028 | $23,657 | $26,285 |
| After federal tax credit | $9,154 | $10,985 | $12,816 | $14,647 | $16,477 | $18,309 |
How can I pay for solar panels?
Getting solar panels is like buying a car. Most people pay cash, finance or lease. Eligible homeowners can also borrow against home equity to pay for a solar panel system.
- Solar loans work like any other type of loan. They have relatively low fixed interest rates. Once you pay it off, you own your system outright.
- Solar leases are a good option if you have limited savings and don’t want to take on debt; you also aren’t responsible for system maintenance.
» SOLAR PANELS: Buy vs. lease
Solar resources in Kentucky
Below are some additional resources that might help you go solar in Kentucky.
- The Kentucky Solar Energy Society
- Kentucky’s PACE programs
- Information about Kentucky utilities
- LG&E and KU net metering
- Kentucky Power net metering
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.
| Company | Customer rating | Pro install | Payment options | Year founded | |
|---|---|---|---|---|---|
 Blue Raven Solar | Get Started | 3.4 |  | Cash, loan, lease, PPA | 2014 |
 Green Home Systems | Learn More | 1.0 | | Cash, loan | 2017 |
 Tesla Energy | Learn More | 1.9 | | Cash, loan and lease | 2015 |
 Sunnova | Learn More | 1.1 | | Cash, loan, lease and PPA | 2012 |
 ShopSolar | Learn More | 4.6 |  | Cash, loan | 2018 |
FAQ
Can I get free solar panels in Kentucky?
No, but you can enter a solar lease with minimal upfront costs. Still, it’s not totally free. Solar leases generally require a flat monthly fee.
» FREE SOLAR PANELS: Are they really free?
How much can I save with solar panels in Kentucky?
On average, Kentucky homeowners with solar panels avoid $18,380 in utility costs over 25 years. Even if you don’t generate 100% of your energy needs, you can still save a lot of money compared with traditional utility bills. In Kentucky, solar panels usually pay for themselves within 18.38 years.
» EXPLORE: Where your solar savings go the furthest
How do I know if my house is a good candidate for solar?
It’s best to have plenty of unshaded roof space that faces south or west for optimal sun exposure. It’s also smart to upgrade any old, inefficient appliances first. Reducing your electrical loads now means you can get a smaller system, which will be cheaper.
The condition of your roof matters too — if it needs replacement soon, do that before installing solar panels. Installing solar panels on an old roof might mean you have to remove the panels, replace your roof and then reinstall the panels again. This will cost around $5,000 for a 19-panel setup.
Solar photovoltaic (PV) technologies, more commonly known as solar panels, absorb sunlight and convert it into usable electricity. If you have a lot of shading around your house, they might not get enough sun to power your home.
What has Kentucky’s investment in solar been so far?
Total solar investments in the state amount to $352 million, according to the Solar Energy Industries Association.
Bottom line
The ConsumerAffairs Research Team conducted an in-depth analysis to determine the average costs of going solar and incentives in other states. Turns out, it’s worth it for many homeowners, particularly in Kentucky.
Solar costs vs. savings: Kentucky and nearby states
| 6-kW system cost (before incentives) | 10-kW system cost (before incentives) | Typical system size needed* | Average cost per watt | Total utility power cost savings** | |
|---|---|---|---|---|---|
| Illinois | $18,415 | $30,691 | 7.3 kW | $3.07 | $28,060 |
| Indiana | $17,115 | $28,524 | 8.7 kW | $2.85 | $24,351 |
| Kentucky | $15,771 | $26,285 | 7.3 kW | $2.63 | $18,380 |
| Missouri | $15,220 | $25,366 | 10.9 kW | $2.54 | $29,087 |
| Ohio | $16,699 | $27,832 | 7.2 kW | $2.78 | $48,647 |
| Tennessee | $18,277 | $30,462 | 6.7 kW | $3.05 | $2,846 |
| Virginia | $16,363 | $27,271 | 6.9 kW | $2.73 | $41,992 |
| West Virginia | $18,573 | $30,955 | 8.4 kW | $3.10 | $63,643 |
Article sources
ConsumerAffairs writers primarily rely on government data, industry experts and original research from other reputable publications to inform their work. Specific sources for this article include:
- DSIRE, "Kentucky Programs." Accessed March 29, 2024
- EnergySage, "The cost of solar panels in Kentucky." Accessed March 29, 20
- Solar Energy Industries Association, "Kentucky Solar." Accessed March 29, 2024.
- SolarReviews, "How much do solar panels cost in Kentucky?" Accessed March 29, 2024.
- Kentucky Legislative Research Commission, “381.200 Deeds construed to include buildings and appurtenances -- Solar easements.” Accessed Aug. 9, 2024.
- Kentucky Energy and Environment Cabinet, “Solar Energy in Kentucky.” Accessed Aug. 9, 2023.
- The Kentucky Solar Energy Society, “Incentives for Renewable Energy and Energy Efficiency.” Accessed Aug. 9, 2024.
