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Last updated: May 2026
Avg. sun hours/day
4.5 hrs
Avg. electricity rate
$0.13/kWh
Active incentives
2
Kentucky does not provide a state-mandated property tax exemption for residential solar energy systems. Local property valuation administrators have discretion; practice varies.
Kentucky has no state-level property tax exemption for residential solar energy systems. Local Property Valuation Administrators (PVAs) in each county have discretion to include or exclude the value added by PV when reassessing residential property. Practice varies across the 120 counties — most rural counties effectively exclude PV value (small market impact, low scrutiny), while urban counties (Louisville/Jefferson, Lexington/Fayette) may include partial value. Contact your county PVA before installation to confirm local treatment. Combined with the post-2020 net billing reform and the expired federal Section 25D ITC, Kentucky residential solar economics are challenging — payback periods typically exceed 12 years for grid-tied systems.
Kentucky applies the standard 6% state sales tax to residential solar PV equipment. There is no consumer-facing residential solar sales tax exemption.
Kentucky's 6% state sales tax applies to residential solar PV equipment with no consumer-facing exemption. Kentucky Department of Revenue administers the sales tax. The state does have a Manufacturing Materials and Supplies sales tax exemption for utility-scale renewable generation facilities, but this is industrial/commercial only and does not extend to residential rooftop solar. The combination of net billing (sub-retail export compensation), no property tax exemption, no state PIT credit, no sales tax exemption, and the federal ITC having expired 2026-01-01 makes Kentucky one of the more economically challenging US states for residential rooftop solar despite reasonable sun resource (4.0–4.7 peak sun hours).
Senate Bill 100 (2019) replaced Kentucky's 1:1 retail-rate net metering with utility-specific net billing, with exports compensated at locational avoided cost (LAC) rather than retail. New residential customers from 2020 onward operate under each utility's PSC-approved compensation rate.
Kentucky Senate Bill 100 (2019, effective January 2020) replaced traditional 1:1 retail-rate net metering with utility-specific net billing arrangements. Each investor-owned utility (Kentucky Utilities, LG&E, Duke Energy Kentucky, Kentucky Power) filed its own compensation methodology with the Kentucky Public Service Commission (PSC); approved rates have generally settled at locational avoided cost (LAC) plus modest adjustments — typically $0.04–$0.06/kWh for exported energy versus residential retail rates around $0.12–$0.14/kWh. Customers grandfathered onto pre-2020 net metering retain those terms for 25 years from interconnection. Residential systems are typically capped at 30 kW for grid-tied operation. Kentucky PSC's Cases 2020-XXX (one per IOU) document the specific tariffs.
Our calculator uses Kentucky's actual sun hours (4.5 hrs/day) and electricity rates.
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