Should Kentucky Residents Go Solar in 2021?: A Guide to Kentucky Solar Incentives


California is the most solar of all states, boasting 13,989 megawatts (MW) of solar capacity.

By contrast, Kentucky’s 2,770 solar installations only generate 61.2 MW of energy. Still, that’s enough to deliver power to over 6,000 homes. What’s more, experts project the Bluegrass State to install 817 MW more solar capacity in the next 5 years.

The different Kentucky solar incentives available today will likely help fuel that growth.

Ready to know more about these popular solar incentives in Kentucky? Then keep reading, as that’s exactly what we’ll discuss below.

Kentucky Solar Tax Incentives

One of the primary solar tax benefits specific to Kentucky is the property tax exemption. This applies to properties that use technology for renewable electricity generation. Such technology includes solar photovoltaic (PV) panels.

So, if you invest in a solar panel system in KY, you may be exempt from paying property taxes.

Net Metering

Net metering is also among the most popular Kentucky solar rebates. With this, you can get utility bill credits for the excess electricity generated by PV panels. You can then use those credits to reduce your utility bills during days when you rely on the grid for power.

Local Solar Installer Deals

Some Kentucky solar providers run their own discount, rebate, or bonus programs.

For example, a local solar company may offer a free upgrade from a low- to a higher-performance panel. They may also offer freebies, such as energy-saving smart thermostats or LED lights. Others may offer their products at lower rates if you buy many solar panels from them.

Just remember that these deals vary from one company to another, so make sure you compare offers. Also, don’t forget to look into the warranties; solar panels should have at least a 25-year warranty.

Federal Investment Tax Credit (ITC)

The federal ITC is not only for Kentucky consumers; it’s a nationwide tax incentive. With this, homeowners who install solar panels on or before December 31, 2022, can get a 26% income tax credit. That 26% applies to the total eligible cost of their solar panel installation.

Suppose your home solar panel system will cost you $18,000 in total. If that entire amount is eligible for the ITC, your total tax credits will sum up to $4,680. You can then deduct this from your owed federal income taxes the following tax year.

So, let’s say you owe the federal government $5,000 in income tax. Since you have a tax credit of $4,680, then you’d only owe the government $320 ($5,000 less $4,680).

What if your tax credits exceed the amount you owe the federal government? In this case, you can rollover the remaining or unused credits to the following tax year. What’s more, there’s no cap or limit to the 26% creditable amount of solar installation costs.

However, keep in mind that the 26% ITC will drop to 22% come 2023. As such, installations that start after 2023 would no longer be eligible for any tax credit.

So, if you’d like to save the most when going solar in Kentucky, make sure you get those panels installed by 2022.

Make Going Green Easier with These Kentucky Solar Incentives

As you can see, there are quite a few Kentucky solar incentives that make going solar in the state a smart move. The best ones, however, are the federal ITC and local installer deals. So, be sure to start exploring these first before you look into net metering.

Ready for more tips in tricks in home improvement, lifestyle, or even health and fitness? Then feel free to stick around to browse our other recent news and blog posts!


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