Kentucky PSC Net Metering Rules: Rider NMS Guide

Updated 6 September 2026 · By SolarNevs Research Desk, Dealer surveys + verified sources · 1 source · Method ↗

Key Takeaways

Kentucky's net metering program applies to customer-generators with systems up to 45 kW (August 2026).
Utilities must offer net metering up to 1% of their single-hour peak load (August 2026).
Level 1 interconnection applications have no fee and a 20-business-day utility review timeline (August 2026).
Compensation varies between Rider NMS-1 (legacy 1:1 retail) and Rider NMS-2 (avoided-cost) (August 2026).

What are Kentucky's Net Metering Rules and Rider NMS?

Kentucky's Public Service Commission (PSC) oversees net metering regulations for customer-generators. These rules, established under KRS 278.465 through KRS 278.468, define how you can connect and receive credit for your solar or other eligible renewable energy system. The primary framework includes a customer capacity limit of 45 kW and specific interconnection standards. Compensation for exported energy is typically handled under Rider NMS-1 for legacy systems or Rider NMS-2 for newer installations.

Kentucky PSC Net Metering Provisions (August 2026)

| Provision Parameter | Statutory Limitation / Requirement | | :-------------------------------- | 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Provision Parameter	Statutory Limitation / Requirement
Customer Capacity Limit (SB 100)	"Net metering applies to customer-generators with an aggregate rated generating capacity of up to and including 45 kW (amended from 30 kW under Senate Bill 100)."
Utility Aggregate Capacity Cap	"Aggregate utility system capacity cap: Each regulated utility is required to offer net metering up to 1% of the utility's single-hour peak peak load."
Eligible Resource Technologies	"Eligible generation sources include solar, wind, biomass, biogas, and hydroelectric resources."
Level 1 Interconnection Scope	"Level 1 Interconnection: Applies to certified inverter-based generating facilities with a rated capacity up to 45 kW."
IEEE 1547 and UL 1741 Standards	"Technical certification: Equipment must comply with IEEE 1547 standard for interconnecting distributed resources and UL 1741 standard for inverters."
External Disconnect Switch Mandate	"External disconnect switch: A lockable, visible-break external disconnect switch located adjacent to the revenue meter is required for utility personnel safety."
Level 1 Zero Application Fee	"Application fee: No application fee is assessed for Level 1 net metering interconnections."
Utility Review Timeline Limit	"Utility review timeline: 20 business days from receipt of a complete Level 1 application."
Rider NMS-1 Legacy Netting	"Rider NMS-1: Legacy 1-to-1 full retail net metering applies to systems connected prior to utility-specific net metering rate revisions."
Rider NMS-2 Avoided-Cost Compensation	"Rider NMS-2: Avoided-cost export compensation where imported electricity is billed at full retail rates and exported generation is credited at commission-approved avoided-cost rates via separate channel netting."

| Monthly Excess Credit Rollover | "Accumulated excess credits roll over month-to-month to offset future volumetric energy charges." | Figures as of August 2026.

What is the Customer Capacity Limit and Which Technologies are Eligible?

Kentucky's net metering program is designed for smaller-scale customer-generators. The rules state that net metering applies to systems with an aggregate rated generating capacity of up to and including 45 kW (August 2026). This capacity limit was increased from 30 kW under Senate Bill 100.

You can use various renewable energy technologies to qualify for net metering. Eligible generation sources include solar, wind, biomass, biogas, and hydroelectric resources (August 2026).

What are the Interconnection Standards and Application Process?

Connecting your system to the grid in Kentucky falls under specific Level 1 interconnection rules. Level 1 Interconnection applies to certified inverter-based generating facilities with a rated capacity up to 45 kW (August 2026).

Technical compliance is mandatory. Your equipment must comply with the IEEE 1547 standard for interconnecting distributed resources and the UL 1741 standard for inverters (August 2026). For safety, an external disconnect switch is required. This must be a lockable, visible-break external disconnect switch located adjacent to the revenue meter for utility personnel safety (August 2026).

The application process for Level 1 interconnections is streamlined. There is no application fee assessed for Level 1 net metering interconnections (August 2026). Once you submit a complete Level 1 application, the utility has a review timeline of 20 business days from receipt (August 2026).

How Does Compensation Work: Rider NMS-1 vs. Rider NMS-2?

Kentucky uses two primary mechanisms for compensating customer-generators for exported electricity, known as Rider NMS-1 and Rider NMS-2.

Rider NMS-1 provides legacy 1-to-1 full retail net metering (August 2026). This applies to systems connected prior to utility-specific net metering rate revisions. Under this system, each kilowatt-hour you export offsets one kilowatt-hour you import at the full retail rate.

Rider NMS-2 offers avoided-cost export compensation (August 2026). With Rider NMS-2, imported electricity is billed at full retail rates. However, exported generation is credited at commission-approved avoided-cost rates via separate channel netting (August 2026). This means the value of your exported power is typically lower than the retail rate you pay for imported power.

Regardless of the Rider, accumulated excess credits roll over month-to-month to offset future volumetric energy charges (August 2026).

What are the Limitations and Other Considerations?

While Kentucky's net metering program supports customer-generated power, there are system-wide limits. Each regulated utility is required to offer net metering up to 1% of the utility's single-hour peak load (August 2026). This aggregate utility system capacity cap ensures grid stability.

It is important to note that systems exceeding 45 kW cannot participate under Kentucky statutory net metering (August 2026). Such larger systems must interconnect under utility-specific cogeneration or small power producer tariffs. Additionally, cooperatives and municipal utilities are not regulated by the Kentucky PSC. These entities may establish independent net billing rates and interconnection criteria (August 2026). You should check directly with your specific utility if it is a co-op or municipal provider.

How We Verified These Rules

We verified the information presented in this guide by reviewing the Kentucky Public Service Commission's official website on August 23, 2026. The details regarding customer capacity limits, interconnection standards, application processes, and compensation riders are sourced directly from the PSC's published net metering information.

Navigating Net Metering in the Region

Understanding net metering rules is crucial for solar system owners. The specific regulations can vary significantly by state. If you are considering solar in neighboring states, you may find our guides on other regional frameworks helpful. You can review the Indiana IURC Excess Distributed Generation (EDG) Guide, the Ohio PUC Net Metering and Interconnection Guide, or the West Virginia PSC Net Metering Rules Guide for comparative information.

Frequently asked questions

What is the customer capacity limit for net metering in Kentucky?

Kentucky's net metering rules apply to customer-generators with an aggregate rated generating capacity of up to and including 45 kW (August 2026). This limit was amended from 30 kW under Senate Bill 100.

What are the technical standards for interconnection in Kentucky?

Equipment must comply with the IEEE 1547 standard for interconnecting distributed resources and the UL 1741 standard for inverters (August 2026). A lockable, visible-break external disconnect switch is also required.

How long does a utility have to review a Level 1 net metering application in Kentucky?

Utilities have 20 business days to review a complete Level 1 application (August 2026). There is no application fee for Level 1 net metering interconnections.

What is the difference between Rider NMS-1 and Rider NMS-2 in Kentucky?

Rider NMS-1 provides legacy 1-to-1 full retail net metering for systems connected prior to utility-specific net metering rate revisions (August 2026). Rider NMS-2 offers avoided-cost export compensation, where exports are credited at commission-approved avoided-cost rates.

What types of generation sources are eligible for net metering in Kentucky?

Eligible generation sources include solar, wind, biomass, biogas, and hydroelectric resources (August 2026).

References

Kentucky Public Service Commission – Net Metering — accessed 23 August 2026

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