✅ Federal Incentives
All federal benefits apply to entities in Kentucky.
✅ State Incentives
⚡ Additional Tax Credits:
Kentucky offers a Renewable Energy Tax Credit for individuals who install solar energy systems. This credit is equal to 30% of the cost of the system, up to a maximum of $500. The credit is nonrefundable and can be carried forward for up to 15 years.
⚡ Property Tax Exemptions:
Kentucky provides a property tax exemption for the added value of solar energy systems. Installing a solar system will not increase your property's assessed value for tax purposes.
⚡ Sales Tax Exemptions:
Certain renewable energy equipment, including solar panels and related components, are exempt from state sales tax, reducing the upfront cost of the system.
⚡ Grants:
Kentucky Energy Efficiency Program: Administered by the Kentucky Energy and Environment Cabinet, this program offers grants to local governments and nonprofits for energy efficiency projects, which may include solar installations.
✅ Utility Incentives
Utility-based incentives in Kentucky vary by provider. Some utilities may offer rebates or incentives for solar installations. It's advisable to contact your local utility provider to inquire about available programs.
✅ Additional Considerations for Nonprofits
The Inflation Reduction Act (IRA) of 2022 introduced provisions that allow tax-exempt entities, such as nonprofits, to benefit from solar incentives. Specifically, the IRA enables these organizations to receive a direct cash payment equivalent to 30% of the solar installation cost, effectively mirroring the federal Investment Tax Credit (ITC). This provision allows nonprofits to achieve similar financial benefits from solar installations as taxable entities.
Summary
Kentucky offers a combination of federal incentives, state tax credits, property and sales tax exemptions, and utility-level incentives to make solar energy a viable and beneficial investment for individuals, businesses, and nonprofits.