In the Bluegrass State, homeowners and businesses are embracing solar power. According to the Solar Energy Industries Association (SEIA), Kentucky has installed solar systems capable of generating 6 megawatts of electricity annually, powering 581 homes. The primary advantage of investing in solar is the potential to save significantly on utility bills, as excess solar energy can be sold back to the utility companies. Additionally, Kentucky residents enjoy some of the lowest solar installation costs in the nation, with an average price of $2.34 per watt.
Discover how you can benefit from going solar with the help of Kentucky’s solar incentives and rebates.
Kentucky Solar Incentives, Rebates, and Benefits
Tennessee Valley Authority (TVA) Generation Partners Program (Residential/Commercial)
The Tennessee Valley Authority (TVA), one of the largest utility providers, offers solar incentives for homeowners and businesses that utilize renewable energy systems, including solar panels, wind turbines, biomass, and small hydropower. The incentive amount varies based on the system type. Solar system owners receive a premium rate of $0.12/kWh for their generated electricity.
New program participants receive a $1,000 sign-up bonus, which can be applied toward the installation cost. Reimbursement is provided as a credit on the participant’s monthly electricity bill. Utility companies compensate for excess generation at predetermined rates. However, systems with a capacity below 500 watts or above 999 kilowatts are ineligible.
Kentucky Net Metering Laws
Kentucky’s net metering law benefits renewable energy consumers. The state requires utility companies and electric cooperatives (excluding TVA) to offer net metering to customers with solar energy systems up to 30 kW. Net metering connects solar panels or other renewable sources to the public utility grid, allowing consumers to offset their electricity consumption from the grid with credits earned through their energy generation. If a consumer generates more energy than they need, the surplus is sold back to the grid, and the consumer receives credits on their power bill.
Kentucky Interconnection Standards
Interconnection standards govern the guidelines for integrating solar and other electrical generation systems with public power systems, essentially “plugging in” to the grid. Kentucky’s robust standards streamline the installation process, making it more straightforward and cost-effective while enhancing the reliability of net metering.
Kentucky Solar Tax Credit and Rebate
Kentucky offers two valuable solar incentives: a state solar tax credit and a state solar rebate. The tax credit is deducted from your state taxes, while the rebate is either a cash payment after installation or a credit on the installer’s final bill. If you receive the credit on the installer’s account, they may handle the rebate paperwork for you.
Performance-Based Incentives (PBI)
Kentucky is among the states that offer generous Performance-Based Incentives (PBIs), also known as Power Performance Payments. These incentives are based on the actual, metered energy your system generates, calculated in kilowatt-hours (kWh) or BTUs. The generated electricity is acknowledged through Solar Renewable Energy Credits (SRECs), whose value fluctuates based on supply and demand. SRECs provide an excellent way to help your solar system pay for itself over time.
Cumberland Valley Electric Rebates
Cumberland Valley Electric, a Touchstone Energy Cooperative, provides rebates ranging from $50 to $1,370 to customers for energy-efficient home improvements.
Kentucky Property Assessed Clean Energy (PACE) Program
The PACE financing program allows Kentucky property owners to fund the acquisition of solar energy systems and repay the cost through a voluntary property tax assessment. This program offers a convenient way to finance the transition to solar power.
USDA Rural Energy for America Program (REAP) Grants
The United States Department of Agriculture (USDA) established the Rural Energy for America Program (REAP) to promote investment in clean energy. This program offers grants and guaranteed loans to agricultural producers and small rural businesses for investments in renewable energy systems and energy efficiency improvements. Grants can cover up to 25% of project costs, ranging from $1,500 to $500,000, depending on the project’s size and nature.
Don’t Forget the Federal Tax Credit!
In addition to Kentucky’s solar incentives, you may also be eligible for a substantial tax credit from the Federal government. The Solar Investment Tax Credit (ITC) is equal to 26% of the total cost of your solar system and can be deducted from your Federal income tax. This credit applies to systems purchased with cash or financed through a loan. If you lease a system, the incentives will be directed to the third-party owner. The ITC provides an excellent motivation to purchase or lease a solar system.
Solar Incentives and Rebates at a Glance
Now is the perfect time to start generating your own energy. With the array of solar incentives, rebates, and benefits from public and private entities, installing a solar system can be a valuable investment.
Find out today which Kentucky solar incentives and rebates you qualify for!
