Is Solar Worth It in Kentucky in 2026?
Complete analysis of solar costs, incentives, net metering, and payback for Kentucky homeowners — without the federal ITC.
Cost Per Watt
$2.70
installed
Electricity Rate
$0.147
per kWh
Payback (No ITC)
13.9 yr
current reality
Payback (With 30% ITC)
9.7 yr
hypothetical
25-Year ROI
80%
return on investment
Incentive Breakdown — Kentucky
Available incentives for a typical 7kW residential solar system in Kentucky
Federal ITC (25D)
ExpiredThe federal solar Investment Tax Credit expired on January 1, 2026. No federal credit available for new installations.
State Tax Credit
NoneKentucky does not offer a state tax credit for solar installations.
SREC Market
Not AvailableKentucky does not have a traditional SREC market.
Property Tax Exemption
No statewide property tax exemption for solar
Sales Tax Exemption
No statewide sales tax exemption for solar
Key Incentives: No major state-level incentives currently available.
Solar Math — With vs Without Federal ITC
Cost breakdown for a typical 7kW residential system in Kentucky
2026 Reality (No Federal ITC)
- System Size
- 7 kW
- Cost per Watt
- $2.70/W
- Gross Cost
- $18,900
- Federal ITC
- $0
- Net Cost
- $18,900
- Annual Savings
- $1,359/yr
- Payback Period
- 13.9 years
Hypothetical (With 30% ITC)
- System Size
- 7 kW
- Cost per Watt
- $2.70/W
- Gross Cost
- $18,900
- Federal ITC (30%)
- -$5,670
- Net Cost
- $13,230
- Annual Savings
- $1,359/yr
- Payback Period
- 9.7 years
Impact: Without the federal ITC, Kentucky homeowners face a 4.2-year longer payback period — paying $5,670 more out of pocket.
Net Metering Policy — Kentucky
How Kentucky compensates your excess solar production
Reduced export credits or net billing — you earn less than retail for excess solar. Moderate impact on payback.
Kentucky mandates net metering but at a rate determined by the PSC, often below full retail.
Cost Per Watt Benchmark — Kentucky
Kentucky Average
$2.70/W
National Average
$3.05/W
Typical 7kW System
$18,900
Kentucky's average installed cost is below the national average of $3.05/W
Breakeven Timeline
Without the federal ITC, a typical 7kW system in Kentucky breaks even in 13.9 years. With the former 30% ITC, payback would drop to 9.7 years.
Without Federal ITC
13.9
years to break even
With Former 30% ITC
9.7
years to break even
Production Details
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