Ohio Solar Incentives, Tax Credits & Rebates (2024 Guide)
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Ohio presents numerous opportunities for homeowners seeking to minimize their carbon footprint. It provides attractive state and federal tax credits and net-metering programs to facilitate the affordable transition to solar energy. This guide walks you through the Buckeye State’s solar power benefits and how to connect with the best solar companies.
What Are the Available Solar Tax Credits and Rebates in Ohio?
Ohio offers a robust selection of solar incentives and tax exemptions for homeowners. We break down these benefits in detail below.
Energy Conservation for Ohioans (ECO-Link) Program
The Energy Conservation for Ohioans (ECO-Link) Program, from the Ohio Treasury, is an initiative designed to empower homeowners in Ohio with enhanced access to energy-efficient upgrades. Through partnerships between state agencies and financial institutions, ECO-Link offers reduced-rate financing to support installing various solar projects. This loan program covers solar panel installation and other energy-efficient home improvements, such as insulation and upgraded HVAC systems.
Loan terms and conditions, such as a program’s interest rate, vary for each homeowner. We recommend contacting the Ohio Treasurer’s Office for more information.
More resources:
Qualified Energy Project Tax Exemption
The Ohio Department of Development exempts solar panel owners from paying a personal property tax. Our research shows that solar panels increase property value by roughly $15,000. This increase is great for your home’s value but results in higher property taxes. However, this property tax exemption ensures you don’t have to deal with additional costs caused by installing a solar power system.
More resources: DSIRE page
What Is the Federal Solar Tax Credit?
You qualify for the federal solar investment tax credit (ITC) as long as you own your solar panel system. This tax credit from the federal government reduces the amount of your owed federal taxes at a rate equal to 30% of your total solar installation cost. If you don’t owe an amount equal to or greater than your solar panel installation, you can roll the credit over to the next tax period.
You won’t qualify for this credit if you lease your solar panels or choose a power purchase agreement (PPA). These payment methods don’t make you the system’s owner. Read our federal solar tax credit guide for more information.
Is Net Metering Available in Ohio?
Net metering allows residents with solar panels to generate their own electricity and sell excess energy back to the power grid. The surplus electricity goes to the utility grid when solar panels produce more energy than is consumer. The owner receives solar renewable energy credits (SRECs) for the excess energy. You can apply these credits to offset future electricity bills when the solar panels aren’t producing as much energy, such as at night or on cloudy days.
Net metering programs vary by utility company. We recommend contacting your local public utilities commission to learn more.
What Are the Most Popular Solar Incentives?
We surveyed 1,000 recent solar buyers in early 2024 and learned that 64% used the federal solar tax credit, 32% enrolled in a net metering program, and 30% took advantage of a local rebate program.
How Much Do Solar Panels Cost in Ohio?
The average national cost of solar panels is around $17,640 for a 6-kilowatt (kW) system without solar incentives. According to EnergySage, the average price of a 6-kW system in Ohio is around $17,880. The federal solar tax credit would bring the price down to $12,516.
How cost-effective your total investment into a solar power system is also depends on your chosen payment method. We’ve detailed each solar financing method below to help you make a more informed decision.
- Cash purchase: Paying for a solar energy system up-front allows you to own it outright and maximize long-term savings. Cash payments also make you eligible for all incentives and tax credits.
- Solar loan: Solar loans are offered by third-party loan providers or sometimes through the solar provider. These loans allow you to borrow money to cover the cost of the solar panel system and pay it off over time. Solar loans usually have fixed interest rates and monthly payments, making it easier to budget for the system. You still qualify for solar incentives because you own the system through the loan.
- Solar lease: With a solar lease, you “rent” the solar panel system from a solar company. The solar company retains ownership of the system, and you pay a monthly lease payment. While you may not own the system, you can still benefit from reduced energy costs. Leasing limits your eligibility for certain incentives and tax credits.
- Power purchase agreement: PPAs are similar to solar leases. You pay for the electricity the solar panels generate at a predetermined rate instead of a fixed monthly lease payment. This option functions similarly to how you pay your normal electric bill. The solar company owns and maintains the system, so you can’t use any incentives with this option.
Which Solar Financing Option Is Most Common?
Of our 1,000 surveyed solar buyers, 64% paid in full upfront, 23% used a solar loan, 11% went with a solar lease, and 17% chose a power purchase agreement.
Is Going Solar in Ohio Worth It?
Going solar is worth it for Ohio residents. Solar panels can generate clean energy for decades. Ohio’s solar industry and incentives also allow homeowners to save money while reducing their carbon footprint. These savings can vary depending on factors such as the cost of electricity, available incentives, climate, and sun angle. However, solar panels are generally worth it Ohio homeowners.
Our Conclusion
Ohio is a great state for going solar. It offers many solar rebates and incentives to make going solar more affordable. Our guide covers the most significant incentive programs, but smaller city- or municipality-specific incentives may be worth exploring. We recommend checking the Database of State Incentives for Renewables and Efficiency (DSIRE) for more information.
Use our tool below to connect with top solar installation companies. You should also read our guide on the best solar companies in Ohio to find a local installer that matches your needs and can help you obtain the incentives listed here.
FAQ About Solar Tax Incentives in Ohio
How can I get free solar panels in Ohio?
No program in the state of Ohio offers free solar panels. This selling point is a red flag if you encounter someone offering you “free” solar panels.
Can you sell electricity back to the grid in Ohio?
Yes, you can sell electricity back to the grid in Ohio through a net-metering program. Ohio’s net-metering policy allows homeowners with solar panels to sell the excess electricity they generate back to the grid.
Do you need a permit to install solar panels in Ohio?
A building and electrical permit is required to install solar panels in Ohio. The fee attached to these permits will vary according to your ZIP code. Call your local zoning department to inquire if a zoning permit is required and learn more about the required permits.
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