Ohio Solar Incentives: Tax Credits & Rebates Guide (2022)

By Britt Olizarowicz

If your electricity bills are higher than you would like them to be, a solar energy system can do the trick. The problem, of course, with solar energy in Ohio is that the installation and solar panel system have high upfront costs making it very difficult to afford. In our Ohio solar incentives guide, we provide:

  • Why solar installations make sense
  • Rebates to help you save money on your solar energy system
  • Tax incentives that can help make a solar system possible

Why Go Solar in Ohio?

Close to 22,000 homes in Ohio are already using solar energy. These homes typically don’t need additional energy from local providers as the solar panels reduce the need for energy from the grid almost completely.

Energy costs in Cleveland, Cincinnati, and other areas of the state are about 3% lower than the national average. Yet, during a cold winter or hot summer, electric bills can be pretty high. In addition, there are many large homes in Ohio that could use the help of some solar energy efficiency just to decrease total costs.

Ohio Solar Cost

Installing solar panels in Ohio will range from around $15,000 to $25,000. The costs depend on the size of the home, the installation procedures as well as any financial incentives that may have been applied to the total cost of the project.

This high out-of-pocket initial cost is what keeps many Ohio homeowners from staying away from this clean energy alternative. It takes quite a bit of time to recoup your initial investment. However, local government and federal government programs are continually making it easier for Ohio homeowners to afford renewable energy sources.

How Much Can You Save on Solar in Ohio?

Unfortunately, the state of Ohio does not have a direct program to help decrease solar panel costs, but there are federal programs, tax credits, and rebates that homeowners can take advantage of. Another option for those that are struggling to afford solar energy is the loan program.

Homeowners can expect to save $5,000 or more on an Ohio solar power installation in 2022.

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The Best Solar Incentives, Tax Credits, & Rebates in Ohio

Incentive Summary End Date
Federal Solar Tax Credit (ITC) Ohio residents can take advantage of the Federal Solar Tax Credit and get a discount of up to 26% applied to their tax return. If you purchase $20,000 worth of solar panels, you can get a credit for more than $5,000 on your next tax return. Remember, this does require you to come out of pocket first. December 31st, 2023
Solar Renewable Energy Credits (SREC) When your home creates solar renewable energy, you can earn credits and then sell them on an online marketplace for money. The problem with the state of Ohio is that the SREC average credit is just $9, considerably lower than other states. Prices do fluctuate. None
Solar Sales Tax Exemption The solar sales tax exemption means that Ohio residents and homeowners do not have to pay the standard 5.75% state sales tax on their purchases. None
Net Metering Net metering allows homeowners that create excess energy to use it as a credit on their next electric bill. All energy providers need to offer this option to homeowners, but the credit rates in Ohio are low. None
Energy Conservation for Ohioans (ECO Link Program) Helps to reduce the cost of solar energy loans by as much as 3% and for up to 7 years. None
City of Cincinnati Residential Property Tax Abatement Property taxes will remain unaffected by the installation of solar panels for a period of 15 years for new construction and 10 years for retrofit. Minimum requirement of $2500 to get started. None
City of Cleveland Residential Property Tax Abatement Property taxes will remain unaffected by the installation of solar panels for a period of 15 years for new construction and 10 years for retrofit. Minimum requirement of $2,500 to get started. None

To make an investment in a solar power system worth it, some rebates and tax incentives are well worth taking advantage of. Here are a few specifically for Ohio residents that can help to ensure you are making an investment that will be well worth it in the long run. Taking the time to research and apply for this money savings will make your system well worth it.

Federal Solar Investment Tax Credit (ITC)

The Federal Solar Investment Tax credit is available in all 50 states. This is a program that gives you a discount on your taxes for the year that you install your solar panels. If you install a system in 2022 when your 2022 tax bill is due, you could save up to 26% of the cost of your solar panels.

It’s important to note that this credit will drop from 26% to 22%, and if the bill to establish this credit does not renew, the entire thing could be done by the end of December 2023. This is the largest of the credits available to homeowners looking to install renewable energy so take advantage of this one while you can.

Ohio Solar Sales Tax Exemption

When purchasing a solar system for your home in Ohio, you will not have to pay sales tax on the purchase. With the sales tax rate in Ohio being 5.75%, this can save thousands of dollars on a $20,000 or more solar panel purchase. Combine this with the Federal Tax rebate, and you will save a good portion of the total cost of the solar installation.

Ohio Solar Property Tax Exemption

When you install solar panels on your home, the price of your home will go up. Essentially your home becomes more valuable and then can be taxed at a higher rate because of that. Some states have a program that allows you to freeze your property values even if you are installing solar panels, so you are not penalized from a tax perspective.

Unfortunately, Ohio does not offer this program, but they do have smaller local programs for areas like Cleveland and Cincinnati, so residents in those areas can benefit from property tax exemption after installing panels.

Ohio Net Metering

Ohio net metering is the process of creating more energy than your home needs and supplying some of that energy back into the grid. This is a program that all local energy providers are required to offer, but the rates can vary from one state to another.

The price that an Ohio homeowner is paid for their excess energy is considerably less than what they are charged per megawatt. The way each company offers net metering will vary, and some will have you saving your excess energy to be used as a credit on your next electric bill. Check the net metering policy in your area for more details.

Ohio SREC’s

Even though Ohio does not offer a specific solar tax incentive, they do have an SREC market that allows you to produce energy and then earn and sell SRECs. These are similar to stocks that you will have earned, and they are called Solar Renewable Energy Certificates. Those that can produce these can end up saving some money each year. This is a state-wide goal that Ohio has to create more than 12% of renewable energy within the state.

The problem that Ohio homeowners will run into is that the payout for SRECs in Ohio is quite low. Some states offer more than $100 per credit, but Ohio is just $12 currently. This number will likely change over time, but expect to only save about $100-$200 a year.

Ohio Eco Link Program

With the Ohio Eco Link program, you can get some impressive financing rates on your solar system purchase and installation. The Eco Link allows you to save up to 3% in interest rates to keep the cost down.

In addition, these reductions in interest rates can stay in place for up to seven years, giving you plenty of time to pay for your entire purchase.

City of Cleveland Residential Property Tax Abatement

Even though the state of Ohio does not offer Property Tax Abatement to purchase a home solar system, the city of Cleveland does. The property tax abatement will last for 15 years on new construction or 10 years on an existing building.

The amount a property market value can increase each year is just 3%, and the great thing about this abatement is that there is no need to prove a financial need. Essentially if you live within the city limits, you are going to be eligible.

The only significant requirement is that you spend at least $2,500 on your residential solar system to be eligible.

City of Cincinnati Residential Property Tax Abatement

The city of Cincinnati Residential property tax abatement will work in the same way that it does for Cleveland. The property tax abatement lasts for 15 years on new construction or 10 years on a retrofit. There is no need to demonstrate a financial need, but you must spend more than $2,500 on the solar system.

This is an incentive that is available for both residential and commercial sectors. There are some additional requirements for commercial buildings looking to sign up for these reductions in property tax rates.

Ohio Solar Easement Laws

If you thought you would have a problem getting enough sunlight to support a solar power system, think again. Ohio has created solar easement provisions to ensure that property owners able to have enough access to sunlight.

Homeowners will need to show that they are looking to install a renewable energy system; from there, solar access easements can be granted. This will help to eliminate upfront costs with issues regarding access to sunlight.

Green Energy Ohio

The Green Energy Ohio program focuses on the specific area of solar water heating systems. If you are not ready for a full-house solar panel project, then maybe something to heat the water in your home is an excellent first step. This program is funded by The Sierra Club, allowing up to a 20% savings rate of the contracted solar thermal project costs.

Homeowners must fill out an application for the Green Energy Ohio act, and they have six months afterward to complete the project installation. Once the system is installed, and inspections have been passed, the rebate is issued. This is another one where you must pay ahead of time and get your money back later.

Commercial Ohio Solar Incentives

Some programs across the United States and in Ohio will apply to residential and commercial buildings. However, sometimes there are additional savings options for commercial solar incentives, but they sometimes require more paperwork and planning. Energy conservation for Ohioans is something that continues to grow and expand in both residential and commercial sectors.

Solar Incentives for Nonprofits and Businesses in Ohio

The Green Energy Ohio program will help to ensure that nonprofits and businesses in Ohio that choose to take the green energy route can save quite a bit of money. A grant can be applied for that will offer up to $250,000 for installing solar energy systems. In addition, other options for schools can help with smaller grants in the $2,000-$3,000 range with very little paperwork and processing necessary.

USDA REAP Grant

The United States Department of Agriculture offers a REAP grant or Rural Energy for America Program that ensures loan financing and grant funding to agricultural produces. In addition, small rural businesses can tap into these resources for renewable energy systems. If you are planning on making your property more energy efficient, it is worth checking out how the USDA REAP grant can make that much more affordable.

Federal Solar Tax Credit for Businesses in Ohio

Although Ohio does not have a specific state tax credit to help reduce tax rates after a solar panel installation, commercial business owners can tap into the Federal ITC tax credit for renewable energy.

For a federal corporate income tax return, there is a 30% credit against the cost of any system that was placed into the building during that year. The Federal Solar Tax Credit is still one of the best ways to save money on solar energy, but these programs are set to expire, and the rate of 30% savings is going down to 10%.

First Energy Ohio Renewable Energy Credit

First, Energy Ohio will purchase SRECs from commercial and school contracts each calendar year. However, this takes some setup and acceptance into the program before the credit can be established. The opportunity for long-term contracts with First Energy Ohio to set up this SREC relationship will not always be available. Therefore when the program comes up, it makes sense to apply.

You can check the FirstEnergy Long Term SREC program for openings or submit a proposal. There are also sometimes opportunities for short-term contracts. This can be a good program for large commercial buildings or even schools.

Solar renewable energy credits sold in bulk can help save money on public utilities and create additional sources of revenue.

City of Cleveland Commercial Property Tax Abatement

Just as Cleveland offers residents the opportunity for property tax abatement in their homes in the city, there are also incentives for commercial buildings in the city. If you are spending more than $5,000 on a commercial solar interconnection, expect to lock your property tax rates in for the next 10-15 years. If you are not taking advantage of things like Solar Renewable Energy Certificates and tax savings as a commercial building in the city, you are certainly missing out.

City of Cincinnati Commercial Property Tax Abatement

The City of Cincinnati Commercial Property tax abatement program works the same way as the Cleveland abatement. If you are looking for a way to afford this solar system and need a way to keep the property values from getting out of hand, this is a great way to do it. Combine this with an interest rate reduction program and a strong warranty on your panels, and you will put yourself in a much better position moving forward.

Key Takeaways: The Best Ohio Solar Incentives

The renewable portfolio standard is changing, and homeowners and business owners are learning that the future is in solar power. Bringing solar and photovoltaic energy into your home or office is a great way to save money and do more for the environment. The costs have always been the major prohibitive factor, but with the changes we see with rebates, interest rate reduction, and tax incentives, this may be changing.

Ohio Solar FAQ

Is solar worth it in Ohio?

Solar is always worth it if your goal is to create more sustainable clean energy. Unfortunately, Ohio does not have the best programs on the market to help homeowners and business owners save money on solar energy. The Federal programs are good, and some Cleveland and Cincinnati-specific options can make this a good investment for your home. Ultimately, it will come down to how much energy you use and how much you want to pay.

How much will my electricity bill go down with solar in Ohio?

Depending on the size of your home and the size of the system you put in, you could have almost no energy costs and even start a net metering program that gives some of your energy back to the local utilities for a credit. When an expert comes to your home for your solar panel quote, be sure to ask how much you could save.

How much does it cost for solar panels in Ohio?

Solar panels in Ohio for a complete single-family home will typically range from around $18,000 to more than $25,000. The process, of course, will be different depending on how large your home is and how many panels you decide to put in. Some people want to power just a few rooms or an AC unit others look to do the entire home.

How many homes in Ohio have solar panels?

Currently, there are just over 20,000 homes in Ohio that have solar panels. As the state becomes more solar and green energy friendly, expect to see this number increase significantly.

Do solar panels increase property taxes in Ohio?

Solar panels will increase property taxes in Ohio. This is considered an improvement to the home. You can get property tax abatement in Cincinnati and Cleveland, but it is not offered throughout the state of Ohio.

How much can you write off for solar panels on taxes in Ohio?

Currently, there is the ability to write off 26% of the cost of your solar panels that will be returned to you in the form of a tax rebate. However, this program is set to change to a 22% rate, and eventually, it will expire. This may be renewed shortly, so keep an eye on this to time the purchase of your solar panels correctly.

House Method’s Solar Companies Rating Methodology

At House Method, transparency and trust are our most important values for the reader. That’s why we took the time to create an objective rating system and score each solar energy company/service according to our methodology.

Our research team dug deep into the fine print of contracts, combed through more than one hundred customer reviews, and thoroughly investigated all of each solar energy company’s services, costs, and products. We’ve done the homework for you by researching nearly all of the solar energy companies on the market so you can have the information you need to make the best choice for your home.

We developed a formula to objectively determine the best solar energy companies and give each a score out of 100 based on the following criteria:

Plan Options (30): Do they provide a variety of plan options? We looked at the number of plans each solar energy company offered and the flexibility of adjusting the plan.

Services offered (20): How many services are offered in each plan? We looked at whether the company manufactures its own solar panels, whether it contracts out installation, and what additional products each company offers.

Trust (10): What do customers say after their solar panels are installed? Does this company offer a guarantee? We considered how satisfied customers are post-service if the company does what it says it will, BBB accreditation, and service guarantees.

Prices (10): How reasonable are the costs of the plan or service in comparison to the industry average? We compared the costs of each company to competitors that offer the same solar energy services.

Unique perks (10): Does the company offer discounts or special services such as financial incentives, rebates, or a useful mobile app? We looked for extras each company offers that set them apart from the competition.

Customer Service (10): How is the customer experience when contacting the company? We considered the speed of response, weekend/holiday availability, and ease of communication through phone calls, email, and online chat functions.

Nationwide availability (10): How many states does the company offer its services? Companies that operate nationally and in all zip codes are favored over those with limited availability.

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