Kentucky is home to thoroughbreds and the most mammoth of caves. It is famous for mountain music and iconic college basketball. But Kentucky has unfortunately little to offer in the form of home solar power incentives. On the bright side, the Bluegrass State has some of the lowest electrical rates in the nation. Yet that's only because coal is so prevalent there, leaving a conundrum for residents that is good for the budget but bad on the environment. This duality is evident in the Kentucky legislature's ambivalence regarding renewable energy. There is no state renewable portfolio standards, but there is a tax credit for solar energy system. Unfortunately, it is capped rather low, preventing any real effect on system costs.
Nevertheless, in April of 2008, when the state legislature enacted that tax credit and renovated net metering rules, they showed the world that they're not entirely blind to the need for renewable energy implementation. While Kentucky's solar rebates could stand to get a lot stronger, here's what Bluegrass homeowners can expect in the meantime:
Renewable Energy Tax Credit
In April of 2008, Kentucky legislators enacted a tax credit, effective January 1, 2009, for renewable energy systems, including solar space and water heat, passive solar design, and photovoltaics. Incentives are $3.00/Watt DC for PV and 30% of total costs for all others. However, the maximum incentive for solar installations is $500. It's a cap that singlehandedly takes an excellent incentive plan and makes a mere token out of it. If they'd just raise that cap, we'd probably see solar power take off like guitar picks at a bluegrass jam.
Tennessee Valley Authority - Generation Partners Program
This program is the best bet for Kentucky solar homeowners lucky enough to live within the service area of TVA or other participation power providers. This production incentive (you might call it a voluntary feed-in tariff) spans several states in the region. If that includes you, TVA will pay for 100 percent of the electricity generated by a solar power system at a rate of $0.12 per kilowatt-hour (kWh) above the going retail rate, plus give $1,000 to help offset the upfront costs of purchase and installation. The installed capacity for the entire program is 200 MW, and contract terms are 10 years. System sizes must be between 500 W and 999 kW. Visit GenerationPartners.com for details.
As a side note, TVA will now pay a smaller rate, $0.03/kWh above retail, for wind, low-impact hydroelectric and biomass systems. This may not apply to most residential systems but it could contribute to TVA reaching max capacity sooner.
Kentucky Residential Energy-Efficient Appliance Rebates
This rebate, which is funded by Recovery Act money, offers a rebate for a variety of energy-efficient appliances, including solar hot water systems, which, if accompanied by a gas or electric backup system, are eligible for a $400 rebate. The program was initiated on April 22, 2010 and is not retroactive, so any solar water heaters purchased before that date are not eligible. About $4 million is available for the entire program, which will continue until those funds are exhausted. See KY Appliance Rebates for further information.
Solar Water Heater Loan Program
The Kentucky Solar Partnership and the Mountain Association for Community Economic Development combined to offer low interest loans for solar hot water systems. Flexible interest rates and terms are available, but all approved loans require 5 percent down. Loans cover 100% of equipment and installation costs. Loans are offered locally and residents must be located in a participating Eastern Kentucky county to apply. Furthermore, an application must include a solar site assessment, the cost of which will be included in the loan. If the loan is denied, the Kentucky Solar Partnership will reimburse the cost of the assessment up to $50.
Other Options
It should also be noted that several utilities in Kentucky offer rebates for geothermal heating and cooling systems. Find out which utilities offer rebates and details for each program at DSIRE - Kentucky.
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