Kentucky Incentives

State of Kentucky

Solar Incentives, Tax Credits & Rebates

Kentucky Generation Partners Program—TVA (Residential/Commercial)
The Tennessee Valley Authority and affiliated utility companies grant a power generation incentive for homeowners and commercial businesses that utilize renewable energy systems. Qualifying systems: biomass, small hydropower, solar panel, and wind turbines. The incentive amount is dependent upon the type of system. For solar systems, customers will receive a $0.12/kWh premium rate.

New members of the program will receive a $1,000 bonus for joining, which can be put toward the installation costs of a system. Reimbursement is represented in the form of a credit on the participant’s monthly electric bill.

For net excess generation produced, energy distribution companies will issue payment based on their company’s pre-established rates.

Systems must be greater than 500 watts and no larger than 999 kilowatts to participate.

Net Metering Laws
Kentucky has strong net metering laws, which is a bonus for purchasers of renewable energy. Net metering is a system in which solar panels or other renewable energy generators are connected to the public utility. Net metering allows customers to offset the cost of the power they pull from the utility with credits they have earned on their production. If your system produces more energy than you need, the excess is sold to the grid, which you benefit from as a credit on your power bill.

Interconnection Standards
Interconnection standards are requirements for connecting solar and other electrical generation systems to public power systems. Kentucky’s standards are quite strong, making it easier for the state’s utility companies to offer net metering.

Performance-Based Incentives (PBI)
Kentucky is one of many states that offer PBIs, which are incentives based on the actual, metered power your system generates. Kentucky calls them Power Performance Payments. You get paid based on kilowatt-hours (kWh) or BTUs generated by your renewal-energy system, as verified by the meter. The electricity produced is credited as Solar Renewable Energy Credits (SRECs), the value of which fluctuates by the rule of supply and demand.

Federal Tax Credit 
On top of these nice Kentucky incentives, you also qualify for a hefty tax credit from the Federal government. The Solar Investment Tax Credit (ITC) is worth 30 percent of the system cost and will be deducted from your federal income tax. The credit goes to those who buy their system, by cash or loan. If you lease a system, incentives go to the third-party owner. A particularly good reason to buy or lease!

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