2022 Ohio Solar Incentives, Tax Credits, Rebates (And More)

Here’s a quick look at the solar incentives in Ohio:

  • Federal Solar Tax Credit (ITC)
  • Solar Renewable Energy Certificates (SREC)
  • Sales Tax Exemption
  • Additional City & Utility Rebates
Ecowatch Author Karsten Neumeister

By Karsten Neumeister, Solar Expert

Updated 5/19/2022

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.

How Much Can You Save With Solar Incentives in Ohio?

In this article, we’ll discuss the solar incentives and rebates available to Ohio homeowners. When you’re ready to speak with a qualified professional, follow the links below. Each of these companies can help you identify and apply for incentives available in Ohio.

Jump to Section:

  1. Solar Rebates, Tax Credits and Incentive Programs in Ohio
  2. Net Metering in Ohio
  3. Federal Solar Tax Credit
  4. FAQ: Ohio Solar Incentives

 

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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 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.

Disclaimer: This article is for informational purposes only. It should not be relied on for and is not intended to provide accounting, legal or tax advice.

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Current Solar Rebates, Tax Credits and Incentive Programs in Ohio

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 26% of your total solar system cost.1 In Ohio, where the average system price is around $23,040, the typical credit is $5,990. 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.

Other Ohio Solar Incentives

Unfortunately, there are relatively few state solar incentives offered in Ohio above and beyond what we’ve mentioned above. The ECO-Link Program and the sales tax exemption are the only statewide incentives that are currently available.

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.

Net Metering in Ohio

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.

Local Incentives

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.

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 26% of your entire system cost. Given the average cost of going solar of $23,040 in Ohio, the average ITC enjoyed by residents is $5,990.

It’s important to note that the federal tax credit is scheduled to drop to 22% in 2023, meaning the average credit in Ohio will dip from $5,990 to $5,069. As of right now, the bill that established the credit is set to expire in 2024, so the credit will no longer be available for home solar systems installed after December 31st, 2023 — commercial systems will still be eligible for a 10% ITC — unless Congress renews the bill. As such, it’s wise to install solar as soon as possible to take full advantage of the ITC.

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FAQ: 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.

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Karsten Neumeister

Solar Expert

Karsten Neumeister is a solar energy specialist with a background in writing and the humanities. Before joining EcoWatch, Karsten worked in the renewable energy sector of New Orleans, focusing on solar energy policy and technology. A lover of music and the outdoors, Karsten might be found rock climbing, canoeing or writing songs when away from the workplace.