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No renewable portfolio standard

Carve-out: None
Tracking system: Midcontinent Independent System Operator-Midwest Renewable Energy Tracking System (MISO-MRETS), PJM-Generation Attribute Tracking System (PJM-GATS)

Kentucky currently has no state renewable portfolio standard or goal and no demand for renewable energy certificates (RECs). However, solar customers may sell RECs to the Ohio and Pennsylvania (for American Electric Power customers only) solar markets. Net metering for Kentucky's investor-owned utilities (IOUs) and electric cooperatives under the jurisdiction of the Kentucky Public Service Commission (PSC) is capped at 30 kW, decreasing the economic feasibility of larger systems. Midmarket customers in the Tennessee Valley Authority (TVA) service territory may be eligible for incentives for systems from 50 kW to 20 MW.

Latest Updates

  • In June 2017, Florida passed SB 90, which exempts 80% of the personal property tax and assessment of real property taxes for commercial properties.

Net Metering

Customers of IOUs and electric cooperatives (with the exception of TVA utilities) are covered by the state's net metering policy for systems up to 30 kW. Customers are credited for excess generation at the retail electricity rate.

Utilities' net metering obligations may be curtailed in cases where the aggregate generating capacity from net-metered systems hits 1% of the utility's single-hour peak load from the prevoius year.

For TVA service territory, please see TVA's Green Power Providers program in the utility programs section.

System size limit: 30 kW

Aggregate cap: 1% of utility's single-hour peak load recorded during the previous year

Credit: Retail price

RECs: Customers retain ownership of RECs

Meter aggregation: Not addressed for solar PV


Kentucky has a two-tiered interconnections approach to specify review criteria. Customers may submit interconnection applications, but utilities can either approve or deny the applications and negotiate interconnection contracts. Inverter-based systems up to 30 kW with UL 1741 and IEEE 1541 certification can apply for interconnection and receive a decision within twenty days with no fees.

All other systems, including solar systems between 50 kW and 5MW, can apply under a level-2 application that may entail a $100 application fee and up to 30 days of processing time. Utilities may require these applicants to undergo an initial impact study.

Eligible Systems Type of Interconnection
≤30 kW Tier 1: 20 days, no fees
>30kW Tier 2: 30 days, $100 fee may be required by utility. Further study may be required.

Kentucky requires that all interconnection systems and equipment comply with safety and quality standards set forth by the NEC, the IEEE, and accredited testing laboratories.

System size limit: 30kW

Liability insurance: General liability insurance coverage is required for all systems.

External disconnect switch: Utilities may require an external disconnect switch for approved systems at their own discretion. Please see individual utilities' requirements.

Third Party Ownership

Third party solar power purchase agreements are not allowed in Kentucky. Third party system owners are regulated as public utilities.

Community Solar

There are currently no state-wide policies or programs in Kentuky to address community solar. Projects and participation may be available through utilities not under the jurisdiction of the PSC.

State Incentive Programs

Program Administrator Incentive

Tax Exemption for Large-Scale Renewable Energy Projects

Kentucky Department of Revenue

Solar projects greater than 50 kW may be exempt from state sales and use taxes. Solar power sales from facilities larger than 50 kW to an unrelated third party may be exempt from state income and limited liability entity taxes. The total value of tax refunds may not exceed 50% of the capital expenditure.

Renewable Energy Tax Credit (Corporate)

Kentucky Department of Revenue

Kentucky corporate taxpayers may take a credit equal to $3 per watt-dc, with a maximum of $500 per single family residential unit and $1000 for multi-family residential or commercial property.

Advanced Energy Gross Receipts Tax Deduction and Advanced Energy Compensating Tax Deduction

Kentucky Department of Revenue

The revenue from sales and leases of a qualified generating facility (solar PV or thermal electric generating facilities of 1 MW or more that began construction on or after July 1, 2010 but no later than December 31, 2015) are deductible from the gross receipts tax amount. This amount can also be deducted while calculating the compensating tax.

The maximum combined benefit allowed from approved advanced energy tax credits (advanced energy tax credits for personal and business use expired on 12/31/2015), advanced energy gross receipts tax deductions and advanced energy compensating tax deductions for a "qualified generating facility" is not allowed to exceed $60,000,000. These deductions are available for a 10-year period for purchases and 25-year period for leases. This is calculated starting from the year development of the facility begins and expenditures are made or until the maximum combined benefit has been used.

Renewable Energy Tax Credit (Corporate) 

Kentucky Department of Revenue

Kentucky corporate taxpayers may take a credit equal to $3 per watt-dc, with a maximum of $500 per single family residential unit and $1000 for multi-family residential or commercial property.

Utility Incentive Programs

Prospective customers in the TVA service territory may be eligible for TVA incentives. Systems smaller than 50 kW may qualify for TVA's Green Power Providers program, which buys 100% of system output for the first 10 years of operation at $0.02/kWh above the retail rate, and an additional 10 years of output at the retail rate. Mid-sized projects (50 kW to 20 MW) may be eligible for TVA's Renewable Standard Offer program. The program buys mid-sized project output through 10-, 15-, or 20-year contracts at a rate that escalates 5% annually. In 2015, TVA began a pilot program titled the Solar Solutions Initiative that offers an additional $0.04/kWh for the first 10 years of solar projects. The program set aside 4 MW of program-eligible capacity for projects between 50kW and 200 kW.


The list below provides some resources for each type of policy or program. Please reference and contact relevant authorities and local utilities for the most up-to-date and accurate information on state and utility policies and incentive programs.

Net metering and interconnection

Utility incentives programs