2022 Ohio Solar Incentives Guide (Tax Credits, Rebates & More)
In this EcoWatch guide on the solar incentives in Ohio, you’ll learn:
- Which solar tax breaks Ohioans can take advantage of
- How Ohio’s SREC prices compare to other states
- What Ohio’s ECO-Link Program is
- How Ohioans can profit off of the solar energy their homes produce
This guide has helped thousands of Ohio homeowners save time and money when going solar by providing them with all of the latest incentives available in the area. Let’s get started!
Why You Can Trust EcoWatch
Our solar experts have sifted through hundreds of local governments’ and utility companies’ websites to find accurate information about current solar incentives in each state. We’ve also unbiasedly ranked and reviewed hundreds of solar installers to empower you to make the right choice for your home.
- Most efficient panels on the market
- National coverage
- Cradle to Cradle sustainability certification
- Great warranty coverage
- Customer service varies by local dealer
- Solar Panels
- Solar Batteries
- EV Chargers
- System Monitoring
What Should You Know About Ohio’s Solar Market?
Going solar in Ohio is more affordable than it ever has been before. However, with an average per-watt cost of $2.56 and a typical system of at least 9 kilowatts to offset electric costs, Ohio homeowners are still paying an average of $23,040 to install rooftop photovoltaic (PV) solar panels. For many residents, this is prohibitively expensive and might turn them off from converting altogether.
Fortunately, there are several solar incentives that make going solar in the area more affordable and more enticing. In this guide, we’ll be discussing the solar incentive programs in Ohio and how each one can bring down your total costs.
Watch Below: Ohio solar power companies excited about new Intel announcement
What Solar Incentives Does Ohio Offer?
The table below provides a quick look at some of the biggest solar incentives available in the State of Ohio and a brief explanation of how each benefits residents. We’ll include additional information on each further in the article.
|Ohio Solar Incentive||Description|
|Federal Solar Tax Credit (ITC)||The federal tax credit is available to all Ohio residents and amounts to 30% of your total solar system cost.1 In Ohio, where the average system price is around $23,040, the typical credit is $6,912. This amount is credited to your federal income taxes owed for the year your system is turned on, so it’s not an immediate payback.|
|Solar Renewable Energy Credits (SRECs)||Ohio incentivizes homeowners to convert to solar power by offering Solar Renewable Energy Credits (SRECs). You can earn SRECs for all energy your system generates, and you can sell them for a profit.2 We’ll explain how this works in greater detail below.|
|Solar Sales Tax Exemption||This incentive prevents Ohio homeowners from having to pay the state’s typical 5.75% sales tax on solar equipment.|
|Net Metering||Net metering is a policy that helps homeowners offset their electric bills by producing excess energy with their panels.3 We explain the net metering policy in Ohio in detail below.|
|Energy Conservation for Ohioans (ECO-Link) Program||The ECO-Link Program was established to help make solar financing more affordable to Ohio homeowners. The program provides up to 3% interest rate reduction for solar loans for up to seven years, with some minor eligibility restrictions.4|
Ohio Solar Tax Credit
Some states provide homeowners with a state solar tax incentive in addition to the federal tax credit to further incentivize converting to clean energy. Ohio does not currently offer a state tax credit.
However, Ohio does have an active SREC market and gives all taxpayers the opportunity to produce energy and earn SRECs. This program is set up to help Ohio meet its Renewable Portfolio Standard (RPS) goal, which aims to produce 12.5% of the state’s electricity via renewable energy sources.
Currently, SREC prices are low in Ohio — about $12 per credit as opposed to $100 to $125 in other states — but the market is active, so these prices could increase at any time. For every 1,000 kilowatt-hours (or 1 megawatt-hour) of electricity your solar panels produce, you’ll be awarded one SREC.5
You can then sell your accumulated SRECs for cash on the SREC market. SREC prices fluctuate just like the stock market prices — based on supply and demand.
As of early 2022, the average SREC price was $10 in Ohio, which means a standard 9-kilowatt system could earn approximately $90 per year in SRECs.6 This is subject to change, of course.
Energy Conservation for Ohioans (ECO-Link) Program
The ECO-Link Program is an Ohio-specific solar loan program that helps make solar financing more accessible to all Ohio residents. It has minimal eligibility requirements, so most homeowners should be able to take advantage of it.
If you qualify, you can enjoy a 3% rate reduction on your solar loan for up to seven years. In some cases, this could save you hundreds or even thousands of dollars. At least half of the loan you apply these benefits to must go to energy-efficiency upgrades, including solar panel systems.
Ohio Solar Sales Tax Exemption
Ohio also provides homeowners with the Solar Sales Tax Exemption, which prevents residents from having to pay sales and use tax on solar equipment, including panels, batteries, inverters and more. With an average system cost of $23,040 and a state sales tax rate of 5.75%, the average Ohioan can save around $1,325 using this tax exemption.
Some states also provide residents with a property tax exemption, which prevents your property taxes from increasing as a result of installing solar panels. Unfortunately, Ohio does not have a statewide property tax exemption.
However, the residents in Cleveland and Cincinnati can take advantage of the City of Cleveland Residential Property Tax Abatement and the City of Cincinnati Residential Property Tax Abatement, respectively. Installing solar panels increases your home value, and, typically, home improvements that make your home more valuable also bump up your property taxes.
These property tax exemptions prevent that from happening. As such, in Cleveland and Cincinnati, your home value will go up from installing solar, but your taxes won’t.
Ohio Net Metering Program
Net metering is a policy that helps you increase your energy savings by overproducing power with your panels and “banking” it with your utility company. Through interconnection, your home will be able to pull additional power from the grid if your panels ever fail to produce the electricity you need — like on a cloudy day or at night.
Conversely, if you ever produce more than you’re using in your home, you’ll be able to send the excess power to the grid. Net metering allows you to earn credits for the energy you provide to the grid, which can be used to offset bills from your power company.
Ohio does have a net metering policy, but it’s far from the best in the nation. It requires that all investor-owned utilities (IOUs) provide access to net metering for customers who have solar panels. However, the rate at which the companies value the credits, so they may only be worth the generation rate of electricity, which is lower than the full retail rate you’d pay to use the electricity.
Beyond rates, utility providers may have varying net metering policies in Ohio, as the law only mandates IOUs provide net metering. Municipal utility companies and electric cooperatives can offer it but are not required. It’s worth noting that the net metering policy is currently under review by the Public Utility Commission of Ohio (PUCO) and is subject to change.
In many states, there are local incentives provided by local utility companies or individual municipalities to incentivize residents to convert and save the companies and area money on power production. In Ohio, examples of these include Cincinnati’s and Cleveland’s property tax abatements. Check with your local government for any additional money-saving opportunities.
What Do Ohioans Need To Know About the Federal Solar Tax Credit?
The federal solar investment tax credit, or ITC, is a tax credit provided by the federal government to all Ohio homeowners. The ITC gets credited to your federal income taxes owed for the year your system is turned on, and it amounts to an incredible 30% of your entire system cost. Given the average cost of going solar of $23,040 in Ohio, the average ITC enjoyed by residents is $6,912.
This tax credit applies to all residential solar panel installations in the U.S. through 2032. It’s important to note that the federal tax credit is scheduled to drop to 26% in 2033 and 22% in 2034. The credit will be phased out by 2035 unless it is renewed by Congress.
Read More About Going Solar
FAQs: Ohio Solar Incentives
The EcoWatch team gets questions about solar incentives in Ohio regularly. The questions below are the ones we see most frequently from residents of the Buckeye State. If you have specific questions that aren’t answered here, reach out to our team of solar experts at firstname.lastname@example.org.
Unfortunately, Ohio does not have a state solar tax credit. However, the federal tax credit is available to all Ohio homeowners until the end of 2032, and this credit amounts to 30% of your total solar energy system cost.
There are other benefits available in Ohio as well that can help reduce the upfront and long-term costs of converting to renewable energy.
Yes! While Ohio doesn’t have a state tax credit as some other states do, there are some incentives available in 2022 that can help keep costs down and increase your return on investment in a solar power system.
Perhaps most noteworthy is the SREC policy. Ohio residents can earn Solar Renewable Energy Certificates (SRECs) for every 1,000 kilowatt-hours they produce with their systems. Most homes in Ohio require a 9-kW system to overcome energy needs, which means an average of nine SRECs could be earned annually. Homeowners can then sell SRECs for a profit.
Ohio also has a decent net metering program that lets you earn utility credits for any excess energy production, making reducing your energy costs a bit easier.
Additionally, there are loan programs — like ECO-Link — designed to make solar financing more accessible and more affordable in the long run, so there’s plenty of opportunity for Ohioans to save money on their solar conversions.
Unfortunately, there are no rebate programs available for solar power in Ohio. However, you could think of SRECs as rebates, as you can sell them each year for a profit.
The average system in Ohio produces nine SRECs annually, which sells for an average total of $90 in 2022. This amount could increase, however, as other states have SREC averages worth 10 times that or more.
In most cases, yes. Installing solar panels will increase your home value, which means your assessed value will also increase. Since your property taxes are based on your assessed value, solar conversion will cause a bump in your taxes. Many states have a statewide property tax exemption to prevent this from happening, but Ohio does not.
However, the City of Cleveland and the City of Cincinnati both offer a local property tax exemption, so residents in these cities will not see an increase in property taxes as a result of going solar.