Kentucky could save billions by replacing coal with solar and storage, report finds: Study

A new independent energy analysis released this month concluded that continued reliance on aging coal-fired power plants in Kentucky is more expensive for ratepayers than transitioning to a mix of solar generation, battery storage and energy-efficiency investments. The study projects that replacing coal capacity with clean energy alternatives could save Kentucky electricity customers billions of dollars through 2050, while maintaining grid reliability.

Least-Cost Pathway Modeled Through 2050

The study, commissioned by the Kentucky Resources Council (KRC), the Mountain Association, the Metropolitan Housing Coalition, and Earthjustice, used detailed power-system and economic modeling to compare multiple future electricity portfolios. It found that Kentucky’s current path, which continues to rely on coal and delays retirements of outdated plants, is no longer the least-cost option for the state’s utilities and ratepayers.

Researchers concluded that a portfolio emphasizing renewable energy, particularly solar, paired with battery storage and demand-side resources could deliver approximately $2.6 billion in savings by 2050 compared with the baseline scenario dominated by coal generation. Those savings would grow larger if potential future carbon-related compliance costs were included in the analysis, according to Solar Power World. 

Policy Barriers Cited

The report also examined the effects of Kentucky’s recent energy laws, including Senate Bill 4 (2023) and Senate Bill 349 (2024), which were passed by the state legislature and restrict the ability of utilities to retire coal plants and invest in alternative resources. According to the analysis, these laws are slowing the transition to cheaper renewables and hindering cost savings that could come from expanded clean energy deployment.

Ashley Wilmes, Executive Director of the Kentucky Resources Council, said the findings underscore a shift in cost dynamics: while coal historically was the least-expensive source of electricity in the state, it no longer holds that position as renewable costs fall and coal facilities age. She argued that continuing to prop up uneconomic coal operations contributes to higher electricity costs and reduced reliability.

Grid Reliability and Weather Resilience

Beyond cost savings, the report suggested that a diversified energy mix incorporating solar and storage could enhance grid resilience during periods of extreme weather, a notable factor in Kentucky, which has experienced grid stress during past heatwaves and winter storms. Older, inflexible coal units are more prone to failure under such conditions, whereas battery storage can help steady supply when demand spikes or generation dips. 

Clean Energy Goals and Future Prospects

The analysis indicated that Kentucky could achieve up to 95 % clean energy by 2050, depending on the pace of renewable deployment and regulatory adjustments that allow coal retirements and new solar construction at scale. Pursuing such pathways, the study said, would not only lower costs but also reduce exposure to fuel price volatility and long-term maintenance expenses associated with aging fossil generators.

Industry and Policy Reactions

Supporters of the study’s recommendations argue that the results provide a clear economic rationale for accelerating solar and storage development in Kentucky, particularly given dramatic declines in the cost of utility-scale solar generation in recent years. Independent analyses show that new solar and storage resources often have lower levelized cost of energy (LCOE) than new fossil capacity when long-term fuel and maintenance costs are considered.

However, some coal advocates have contended that coal plants provide dependable baseload power and help keep Kentucky’s historically low retail electricity rates below the national average, though critics of that view note that coal’s cost advantage has eroded as renewable technologies have scaled.

Broader Implications

With the report’s release, energy policy debates in Kentucky are expected to intensify as utilities, regulators and lawmakers weigh the balance of cost, reliability and environmental factors in future electric resource planning. The findings add to a growing body of research suggesting that clean energy portfolios, particularly those anchored by solar and paired with storage, can deliver both economic and grid performance benefits compared to continued fossil fuel dependency.

Sources:

• Study finds it’s more expensive to use coal in Kentucky instead of switching to solar (Solar Power World) (Solar Power World)
• Solar, storage, and demand-side resources offer least-cost path in Kentucky, study finds (pv magazine) (pv magazine USA)
• PR Newswire summary of Kentucky clean energy study (PR Newswire)
• Kentuckians could save billions if utilities moved beyond fossil fuels, study finds (Lexington Times / WKMS) (The Lexington Times)
• Kentucky’s Energy Transition analysis (full report) (KYRC)