Kentucky Solar Rebates, Tax Credits, and Incentives

kentucky solar Kentucky Solar Rebates, Tax Credits, and Incentives
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Solar Legislator Score: Kentucky Solar Rebates, Tax Credits, and Incentives Kentucky Solar Rebates, Tax Credits, and Incentives

STATE LEGISLATION

Kentucky’s electric utility rates are among the lowest in the country. According to the Department of Energy, Kentucky’s electricity rates average 5.43 cents per kW hour compared to the national average of 8.90 cents per kW hour. E.ON U.S., LLC, formerly Louisville Gas & Electric, is the principal electrical energy provider in Louisville, and in 2007 won the highest J.D. Power customer satisfaction ranking in the Midwestern Region for the eighth time in the last nine years.

That’s about the extent of the good news for Kentucky’s residential electric power customers. The state has introduced very few incentives to encourage utilization of solar power and other renewable/sustainable energy sources, particularly for the benefit of homeowners. Air quality is an issue in Kentucky, and a compelling argument for a greater emphasis on solar energy systems.

STATE INCENTIVE PROGRAMS, UTILITY REBATES, UTILITY LOANS, AND UTILITY INCENTIVES

State Bill 247 was enacted in Kentucky in 2004, requiring all investor-owned utilities and electric co-ops (TVA excepted) to offer Net-Metering to customers with photovoltaic solar-electric installations of 15 kW or less. A single, bi-directional meter is to be supplied by the utility; additional meters or distribution upgrades must be installed at the customer-generator’s expense. Excess power generated will be credited to the customer-generator at the utility’s normal retail rate. More on Kentucky net-metering here.

On September 30, 2007, the state legislature enacted a Sales Tax Exemption for Large Scale Renewable Energy Projects. It provides the commercial sector an exemption for 100% of sales and use taxes up to a maximum of 50% of the capital investment, and applies to solar energy systems producing at least 50 kW. The incentives also apply to wind power systems, biomass, landfill gas, hydropower, and similar resources generating at least 1 mW. There are other benefits and conditions; for further information, click here.

The Kentucky Solar Partnership (KSP) and the Mountain Association for Community Economic Development (MACED) offer a Solar Water Heater Loan Program, available to both commercial and residential users. It is a monthly installment loan program, with 5% down and a relatively low rate of interest for a fixed term of six years, covering the full equipment and installation cost. For details, click here.


The Tennessee Valley Authority (TVA) offers an interesting program through participating Green Power Switch (GPS) Generation Partners. Solar or wind power produced by residential or small commercial generators can sell 100% of their output to TVA for 15 cents per kilowatt-hour. An additional $500 incentive to help offset start-up costs is also available to residential users who qualify. This TVA website provides the particulars.

EXAMPLE RESIDENTIAL SOLAR INSTALLATION

Louisville/Jefferson County has an estimated population of about 700,000 people, excluding annual visitors to the Kentucky Derby, and just over 322,000 housing units that are exposed to plenty of sunshine; the area has a solar rating of “good”. Although utility rates are low, average electrical usage in Kentucky is a relatively high 14,328 kWh/year. To achieve a 50% net reduction in power company usage, a solar installation would require about 600 square feet of roof space and would cost approximately $54,000 (midrange estimate). Unfortunately, a $2,000 federal tax credit is the only direct offset to the cost. On the plus side:

  • Estimated increase in property value – $8,200
  • Estimated 25-year utility savings – $17,204
  • Estimated reduction in greenhouse gas emissions – 147 tons

CONSENSUS

The obvious lack of solar incentives in the previous example highlights the need for action on the part of Kentucky’s governor and legislators. Although past and present government officials deserve kudos for whatever role they played in achieving the state’s low electric utility rates, the fact remains that most of their power comes from the burning of coal. Kentucky has fallen short in implementing renewable/sustainable energy alternatives, and needs to make this a priority.

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Read the 19 brilliant comments below or add yours!

Comment on January 24th, 2008.

Are there any restrictions on who can and cannot have solar panels on their houses in terms of ordinances and such? I heard you can’t have them in certain counties, neighborhoods and cities. Is this true?

Comment on January 25th, 2008.

Scott,

Municipalities have their own rules when it comes to building codes. There are some neighborhoods that will not allow historic buildings to change much at all. Some owners in those areas have gone so far as to install solar flat on top of fireplace chimneys so you wouldn’t be able to detect them from the street!

John Identicon Icon John
Comment on July 21st, 2008.

Are there any grants for University\colleges that want to do solar?

Comment on July 22nd, 2008.

John,

State grants for renewable energy are out there. I haven’t seen any in Kentucky for installation purposes. Instead, money has been for solar research and communication.

Check this out for more details.

Bob Identicon Icon Bob
Comment on October 5th, 2008.

How do we get the ball rolling in the right direction to increase residential solar tax credits?

Comment on October 6th, 2008.

Bob,

Last week the US House and Senate passed a law to remove the $2,000 cap from tax credits. This is huge. Further steps need to be taken though to enhance Kentucky’s standing relative to other more progressive states in the country. The best bet would be to contact your Kentucky state representative here and let them know you want better incentives.

peggy Identicon Icon peggy
Comment on October 14th, 2008.

Are there any start up grants for solar programs in residential homes in the Kentucky are

Comment on October 14th, 2008.

Sorry Peggy not sure… looks like Google time!

David Identicon Icon David
Comment on November 8th, 2008.

Hi, Dan I am ready to install a solar system at my home,do you Know the best place to buy a system? and Who do I contact about the hook up to the grid also about the incentives? I want to install the system right the first time!
Thanks!

Comment on January 13th, 2009.

I am doing a project on solar panels systems in Kentucky- in it I am proposing a way to make the solar tax incentive in KY easier to get and less loops to jump through- what do you suggest are the immediate things we could do, if such legislation were enacted?

Troy Identicon Icon Troy
Comment on January 16th, 2009.

When will cooperatives under TVA authority be required to offer net metering?

Robbi Identicon Icon Robbi
Comment on February 26th, 2009.

I’ve found a company that I would like to buy from but I’m not all that knowledgeable on all of the costs. The company is Solatron Technologies. Its a company out of California, so the question is, is there company here that deals with this same company cause of shipping costs?

James G Identicon Icon James G
Comment on April 7th, 2009.

I can’t find any intallers or distribitors in the area. If anyone else cares to join me on a quest to start our own company selling and installing solar panels, feel free to email me and we shall see what we can do.

Shelby Identicon Icon Shelby
Comment on April 22nd, 2009.

We are recently working on solar energy in our project citizen group. I know that Kentucky is among the lowest for solar energy use in the United States but I really think that it is a problem we need to address. I think that this article is really going to help us in our project and I would like to thank you for your time writing it to share this information.

Comment on April 22nd, 2009.

Shelby,

Please keep us updated on your progress. It means a lot to us that our article has helped inspire your group. You can do it!

- Dan

Janis Identicon Icon Janis
Comment on May 14th, 2009.

Are there no rebates or tax incentives to help a private homeowner (and customer of Kentucky Utilites) buy photovoltaic solar panels? That the state will help pay the cost of net metering after a person has figured out how to pay for the system is faint help. An estimate for getting a photovoltaic system for my home was $65000. Where is a person supposed to come up with this without help? This is about half a house!

Comment on July 16th, 2009.

Two questions, How far from a house can the solar panels be located? And, have you seen any larger projects to service a new development of approx. 30 homes?

scott Identicon Icon scott
Comment on February 1st, 2010.

i am living in europe and am moving back to the good ole USA and have been looking at the KY area. over here the government is paying up to half of the cost to install with tax credits over 10 years with a fixed rate that the electric company can charge for used power and at the same time a fixed rate that they have to pay for any eccess energy set at 20 years. the system pays for its self in 10 years and has a garentee for 25. thats incentive!!
so when i install in KY i guess i will have to foot the bill myself but do it gladly to get away from green house gases

Steve Identicon Icon Steve
Comment on February 1st, 2010.

I also want to install a PV system and get off the grid by 2012. I live in Louisville and have recently built a solar friendly home (3200 s/f)and now want to install a system. Looking for others who have used system they would recommend. Bulk pricing works for me.

Comment on February 1st, 2010.

Hey, Steve. Our partner, 1bog.org currently doesn’t have a bulk pricing campaign going on in Kentucky right now, but that doesn’t mean they won’t in the future, especially if Federal or State incentives improve over the next year. That could happen with a new Clean Energy bill working its way through Congress. Sign up over there, and they’ll let you know when the lay of the land improves for solar over there.

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