Note: As of January 1, 2016, this tax credit is no longer available for new installations.
In April 2008, Kentucky enacted legislation establishing a 30% state income tax credit for certain renewable energy installations on residential and commercial property (see the Kentucky Renewable Energy Tax Credit (Corporate) for more information on taking the credit for installations on commercial property).
Kentucky taxpayers may take the 30% credit against individual income taxes for any of the following equipment installed on their principal residence:
The maximum tax credit allowed per taxpayer is $250 for geothermal technologies, and $500 for solar hot water and wind technologies. In addition, Kentucky residents may take a credit equal to $3.00 per watt (DC) of rated capacity for the installation of a photovoltaic (PV) system, with a maximum credit of $500.
To be eligible, wind and solar hot water equipment must have a manufacturer’s warranty of five years or more. Solar hot water systems must also have an installer's warranty of two years or more, and must use collectors certified by the Solar Rating and Certification Corporation (SRCC) under OG-100. Solar energy systems must be installed by a North American Board of Certified Energy Practitioners (NABCEP)-certified installer. PV panels and inverters must meet article 690 of the National Electrical Code (NEC) and be certified by Underwriters Laboratories (UL).
Wind turbines must meet the wind industry consensus standards developed by the American Wind Energy Association (AWEA) and U.S. Department of Energy. Wind turbines must also meet the requirements of article 705 of the NEC, and must be UL-certified. Geothermal systems must meet certain guidelines for their Energy Efficiency Ratio (EER) and Coefficient of Performance (COP).
The credit may be carried forward for one year. It is effective for taxable years 2009-2015. To claim the tax credit, use Form 5695-K - Kentucky Energy Efficiency Products Tax Credit - Form 41A720-S7 available on the Kentucky Department of Revenue web site.
| Implementing Sector: | State |
| Category: | Financial Incentive |
| State: | Kentucky |
| Incentive Type: | Personal Tax Credit |
| Web Site: | http://revenue.ky.gov/ |
| Administrator: | Kentucky Department of Revenue |
| Start Date: | 1/1/2009 |
| Eligible Renewable/Other Technologies: |
|
| Incentive Amount: |
PV: $3/W DC All other systems: 30% of eligible costs |
| Maximum Incentive: | $500 for solar and wind installations; $250 for geothermal installations. |
| Equipment Requirements: |
Solar water heaters must use OG-100 SRCC certified collectors with minimum 5-year warranty. PV systems must meet the requirements of Article 690 of the National Electrical Code, and use solar photovoltaic panels and inverters that are rated and listed by Underwriters Laboratories. Wind turbines must meet AWEA's wind industry consensus standards. Closed loop geothermal heat pumps must have EER of 14.1 and COP of 3.6 Open loop geothermal heat pump must have EER of 16.2 and COP of 3.5 DX geothermal heat pump must have EER of 15 and COP of 3.5. |
| Installation Requirements: | Solar hot water, active solar space heating, and PV systems must be installed by a NABCEP-certified installer. |
| Carryover Provisions: | Excess credit may be carried forward for one year. |
| Technologies: | Solar Photovoltaics |
| Sectors: | Residential |
| Parameters: | The incentive has a minimum of $500.00, The incentive is 3.00 $/W |
| Technologies: | Solar Water Heat |
| Sectors: | Residential |
| Parameters: | The incentive has a minimum of $500.00 |
| Technologies: | Wind (All) |
| Sectors: | Residential |
| Parameters: | The incentive has a minimum of $500.00 |
| Technologies: | Geothermal Heat Pumps |
| Sectors: | Residential |
| Parameters: | The incentive has a minimum of $250.00 |
| Name: | KRS § 141.435 et seq. |
| Effective Date: | 1/1/2009 |
| Expiration Date: | 12/31/2015 |
| Name: | Taxpayer Services |
| Organization: | Kentucky Department of Revenue |
| Address: |
501 High Street Frankfort KY 40620 |
| Phone: | (502) 564-4581 |
This information is sourced from DSIRE; the most comprehensive source of information on incentives and policies that support renewables and energy efficiency in the United States. Established in 1995, DSIRE is operated by the N.C. Clean Energy Technology Center at N.C. State University.
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