Kentucky Solar Panels: Pricing and Incentives

How much do solar panels cost in Kentucky?

Written by Ashlee Tilford

Edited by Hannah Whatley

Last updated 08/24/2022


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Solar power in Kentucky

Kentucky is often known to natives as “coal miners’ country,” and that can be reflected in a slower-than-usual adoption of solar energy. In 2021, Kentucky ranked 47th in the country for the use of sun-powered energy. However, solar panels in Kentucky are on the rise and are expected to continue rising over the next five years. 

Both the COVID-19 pandemic and record increases in inflation have many residents of the Bluegrass State looking for ways to become more self-sufficient and find lower rates for everyday purchases, and utilities like power are no exception. Combining smart decision-making with Kentucky solar incentives can make solar panels in Kentucky a worthwhile investment. 

Kentucky solar panel cost

Cost is one of the biggest factors to consider when installing solar panels in your Kentucky home. The national average for solar panels is $3.82 per watt. Homeowners often recoup the out-of-pocket investment of the initial solar panel costs within six to nine years through energy and bill savings. The short payback period is a reflection of generous Kentucky solar incentives

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Kentucky solar panel incentives or rebates

To help make the switch to solar energy more affordable, federal, state, and some local governments offer incentives. Solar panels are an investment for most homeowners, and the cost may even be intimidating if you aren’t aware of the tax credits and rebates in your area. 

If you install solar panels in the next 10 years, you can claim a 30% federal tax credit, known as the Residential Clean Energy Credit, on your income taxes. The credit was formerly known as the Solar Investment Tax Credit (ITC) and can be applied to solar systems installed from the beginning of 2022. However, keep in mind that if you lease your solar energy system or enter a solar power purchase agreement (PPA), you will not be eligible for the credit.

In addition to federal incentives, Kentucky has created some state solar incentives. Here are a few:

PACE ProgramThis is a clean energy financing program designed to help property owners invest in clean energy sources like solar power. 
Smart $aver ProgramThis program incentivizes certain qualifying residential equipment installation and services where money is paid back to the homeowner after the installation or service is complete.
Targeted Energy Efficiency ProgramThis is a rebate program that provides qualifying weatherization and energy efficiency services to residential customers who wish to lower energy bills and improve safety and comfort in their homes through energy efficiency.
Net MeteringKentucky offers consumers the option of net metering, which allows consumers to build up energy credits when they don’t use as much energy as their panels produce during the month.

Kentuckians have the option to buy their solar system, or they can lease the panels from a solar company. Then, they can choose to connect the panels to the grid through net metering or remain off-grid in some areas. Kentucky is one of many states that have developed mandatory net metering rules. Solar energy systems up to 45 kW qualify for net metering. The Public Service Commission sets a rate for electricity instead of the retail rate and pays the homeowner back at that rate for the excess energy. 

Why choose Kentucky solar power?

There are several reasons Kentucky homeowners may consider solar power. Here are a few:

Lower energy costs

The potential to reduce your monthly energy costs may be one of the most appealing benefits of installing solar panels and using other green energy sources in Kentucky. It may take several years to realize any savings, but over the course of time, the reduction in costs adds up. If fuel costs continue to increase, those may eventually translate to energy rate increases, which will further exemplify the potential cost reduction from going solar. 

Establish energy independence

Many Kentuckians are interested in becoming more energy independent. Adding a battery to your solar system can protect you from power outages by providing power to necessary electricity. Powering your home with solar panels also helps reduce or eliminate your tie to the power grid, which means you will be less affected by energy rate increases. Kentucky even allows energy users to be completely off the grid if they choose.

Go green

Perhaps reducing your carbon footprint is important to you. Solar power is one of the cleanest and most abundant green energy sources. While traditional electricity uses fossil fuels to power your home, solar energy is a renewable resource that can replace traditional electricity. 

Should I buy or lease my solar panels?

When it comes to solar panels and other necessary equipment, there are a few options to consider. You can buy the solar equipment from a company upfront in cash or financed, or you can lease the system. Although buying the solar system requires a large initial investment, it is the most cost-effective option over time. Buying your solar equipment upfront can immediately increase the value of your home by $15,000 on average, according to the Office of Energy Efficiency & Renewable Energy.

Leasing solar equipment allows more people to invest in a clean energy source. Another benefit of leasing is that homeowners are not responsible for the maintenance of the system. Instead, the leasing company that owns the panels is responsible for maintenance and repairs. Drawbacks of leasing solar equipment include an indefinite monthly fee and no net metering benefits. 

Additionally, most tax credits and incentives do not apply to leased systems. Another consideration is if you ever plan to sell the home, the new homeowner would need to take over the lease. That may or may not be a hindrance to the sale of your home. 

A bit different than buying or leasing solar equipment, community solar programs are also now an option in Kentucky. These programs allow Kentucky households to share solar power from a single source without paying the large upfront costs or leasing the equipment. 

Kentucky solar panel companies

There are at least 38 solar companies in the Bluegrass State, including manufacturers, installers and developers, and others. SaveonEnergy has done a lot of the research for you in our Top Solar Panel Companies 2022, Best Solar Panels, Best Solar Battery and Most Efficient Solar Panels articles. When shopping for an installer, it’s important to do your research and become familiar with the industry, the products available, and the options you have. The more informed you are going into the process of adopting solar energy, the better. 

When you’re ready to learn more, SaveOnEnergy can connect you with a top-tier installer in your area. Call the number on your screen to connect with a solar advisor.

Important solar installation factors to consider

There are some important factors to consider before installing solar panels in Kentucky:

  • Weather matters. Solar panels require adequate sunlight to produce energy. If your roof is very shaded or does not have consistent direct sunlight, your solar production will be lower. 
  • Panel placement matters. If your panels are placed on a roof that is going to need replacement in the next few years, they will need to be removed and reinstalled on the new roof. For optimal energy, according to the Department of Energy, place solar panels on south-facing roofs with slopes no less than 15 degrees and no more than 40 degrees. 
  • Local laws or HOA rules. Always adhere to local laws and HOA rules before installing solar. Solar installers can help you navigate these requirements so your project moves along smoothly. 

Solar power FAQs

  • Your cost in Kentucky will depend on the size of the system, as well as local installation, permit costs, and tax credits and rebates available. You can expect to pay anywhere from $15,000 to $25,000 for a 5-kW solar panel system. 

  • Solar power can be a wise investment in Kentucky, especially if you are able to buy your equipment up front and take full advantage of the tax credits and rebate programs. This type of renewable energy can help to reduce your carbon footprint while potentially reducing energy costs. Whether or not solar is a good investment for you can be determined when you shop around and consider things like weather, HOA rules, and other factors. 

  • Though savings vary depending on your energy usage and solar production, Kentuckians can expect to save around $1548 per year using solar energy. 

  • SaveOnEnergy is a great place to start looking for a solar panel installer in Kentucky. Call the number on your screen to speak with a solar advisor who can connect you to an installer in your area. . Make sure to research all your options before signing a contract. 

  • Solar power is a clean and renewable energy source that doesn’t emit carbon dioxide. By using a renewable source of energy, you are reducing your carbon footprint and helping the environment. 

Solar energy by state