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LG&E and KU (Louisville Gas and Electric Company and Kentucky Utilities Company) · Kentucky

How LG&E and KU (Louisville Gas and Electric Company and Kentucky Utilities Company) credits home solar

What happens to the solar power your home sends to the grid, the size limits, and the steps to connect, checked against LG&E and KU (Louisville Gas and Electric Company and Kentucky Utilities Company)'s own tariffs and the state rules.

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The rules

What happens to the solar power you send to the grid

LG&E serves 443,000 electric customers in Louisville and 16 surrounding counties, and KU serves 581,000 customers in 77 Kentucky counties and five counties in Virginia.

Net Metering Service, Rider NMS 2

How LG&E and KU (Louisville Gas and Electric Company and Kentucky Utilities Company) credits exports

  • LG&E and KU run the same net metering program under matching Rider NMS 1 and Rider NMS 2 tariff sheets, and homes whose net metering service began on or after September 24, 2021 are on Rider NMS 2.
  • Each billing period, the utility bills all the energy the home takes from the grid at the customer's standard rate and gives a dollar denominated bill credit for every kilowatt hour the system sends to the grid, at a rate set by the Kentucky Public Service Commission.
  • The credit applies only to the energy charge and riders billed per kilowatt hour, never to charges such as the basic service charge, and any unused credit carries forward to later bills.
  • Unused credits end when the account closes, cannot be moved to another customer or address, and are never paid out in cash.
  • Systems in service before September 24, 2021 stay on Rider NMS 1, which gives kilowatt hour credits for net exports that carry forward, until September 24, 2046, when they move to Rider NMS 2.
  • Since February 16, 2026, a change that materially increases a system's capacity ends its Rider NMS 1 eligibility.

The rule behind it

Kentucky net metering law, KRS 278.465 to 278.468

The program

Net Metering Service, Rider NMS 2, Rider NMS 2, Sheet No. 58 in the LG&E and KU electric tariffs

Recent changes

In orders dated February 16, 2026, the Kentucky PSC approved new base rates for LG&E and KU while leaving the Rider NMS 2 credit at its existing level, and on March 27, 2026 it denied a rehearing request and said the companies should update the NMS 2 credit with their next qualifying facility filing. The revised Rider NMS 1 sheets, effective February 16, 2026, also end NMS 1 eligibility for a system whose capacity is materially increased.

Before you connect

Limits, and the steps to get connected

Limits and eligibility

  • Rider NMS 1 and Rider NMS 2 are limited to generating facilities with a maximum rated capacity of 45 kilowatts, matching the size limit in KRS 278.465.
  • Under KRS 278.466, once the combined capacity of net metering systems reaches one percent of a utility's single hour peak load in a calendar year, the utility has no further obligation to offer net metering to new customers.
  • Under a rate case settlement the Kentucky PSC approved with modifications in February 2026, LG&E and KU agreed not to close Rider NMS 2 to new participants before new rates from their next base rate cases take effect.
  • The system must be owned and operated by the customer on the customer's premises, use solar, wind, biomass or biogas, or hydro energy, and serve all or part of the customer's own electricity needs.

How a home gets connected

  1. Read LG&E and KU's net metering requirements and interconnection guidelines and pick the application type: Level 1 is for certified inverter based systems that meet the tariff's conditions, and Level 2 is for everything else.
  2. Submit the completed Level 1 or Level 2 Application for Interconnection and Net Metering, with its attachments, by email as the LG&E and KU net metering page directs.
  3. The utility must say within 20 business days for Level 1, or 30 business days for Level 2, whether the application is approved, and approval can depend on an initial inspection and witness test at the utility's discretion.
  4. Once approved, the system can be installed, local governments handle permits and inspections, and any change from the approved plan must be resubmitted for approval.
  5. After the customer or installer reports that the installation is complete, LG&E or KU orders and installs a net meter and then grants permission to operate.

Federal tax credit

The residential solar credit (section 25D) ended for systems completed after 2025. What that means in 2026.

Where we work

Cities we cover in LG&E and KU (Louisville Gas and Electric Company and Kentucky Utilities Company)'s area

Each city page adds who issues permits there, with links to the official sources.

Louisville, KYLG&ELexington, KYKentucky Utilities

State rules

Kentucky solar rulesThe state law, the main utilities, and the cities we cover

Questions

Common questions about LG&E and KU (Louisville Gas and Electric Company and Kentucky Utilities Company) and solar

How do LG&E and KU credit the solar power my home sends to the grid?

Under Rider NMS 2, the utility bills all the energy you use from the grid at your standard rate and gives a dollar denominated bill credit for each kilowatt hour your system sends to the grid. The credit offsets only the energy charge and riders billed per kilowatt hour, and anything left over carries forward to later bills.

Do LG&E and KU pay cash for extra solar credits?

No. Net metering credits never result in cash payments to customers, even if a customer has credits when closing the account. Unused credits also cannot be transferred to another customer or location.

I had solar before September 2021. Do the new LG&E and KU rules apply to me?

Systems in service before September 24, 2021 stay on Rider NMS 1, which gives kilowatt hour credits, until September 24, 2046, when they move to Rider NMS 2. A modification that materially increases the system's capacity ends NMS 1 eligibility, but ordinary replacements that add only incidental capacity do not.

Is there still a federal tax credit for home solar?

The federal residential clean energy credit, section 25D, ended for home solar expenditures made after December 31, 2025, under the law signed July 4, 2025. The IRS treats the expenditure as made when installation is completed, so a system completed in 2026 does not qualify even if it was paid for earlier.

Does the consultation cost anything?

No. The consultation is free for homeowners, and there is no obligation to buy anything.

Who will contact me?

Our team confirms a few details with you, then one local solar company for your area contacts you to set up the visit. Your request never goes to a list.

Sources (checked September 26, 2026)

Tariffs and programs change, so confirm current terms with LG&E and KU (Louisville Gas and Electric Company and Kentucky Utilities Company) before you decide.

Answers homeowners look for

Is the federal solar tax credit still available in 2026?No, not for a home solar system completed in 2026.Can an HOA stop you from installing solar panels?Kentucky: No statewide law foundDo solar panels raise your property taxes?Kentucky: No statewide exemption found

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