2023 Solar Incentives Guide for Allen, OH - Tax Credits & Rebates

What Solar Tax Credits, Incentives, and Rebates are Available in Allen?

Source: https://www.dsireusa.org/

Solar incentives are meant to help mitigate the cost of installing solar panels on your home. This category of financial incentives is intended to encourage more Americans to switch their home over to renewable energy. Different types of incentives, such as cash back, discounts or monthly utility bill credits, may be available to you. Certain incentives may be handled by the state of Ohio, by your utility company or by county or municipality, while other incentives are federal. Some broad categories of solar incentives include:

• Solar Renewable Energy Certificate (SREC): SRECs are credits that can be sold to your utility company (or other buyers) for money that is generally considered part of your taxable income. Generally, there is a small threshold of energy production to meet before your solar system qualifies for SRECs or other performance-based incentives. Incentives like these are typically handled at the state level.
• Tax Credits: Tax credits reduce, dollar-for-dollar, the total amount of tax you owe the federal government. Tax credits differ from tax deductions.
• Tax Exemptions: These may come in the form of property tax exemptions, which allow you to ignore the value added by your solar panels when paying property tax on your home. They may also include exemptions on sales tax at the time of purchase.
• Net Metering: You can sign a net metering contract with your Allen utility company. This agreement may apply to all or a percentage of the excess electricity your solar panels generate. Your utility company will then deduct this value from your monthly utility bill.
• Rebates: A rebate is a partial refund given after you've purchased your solar system. Rebates might be offered by your local utility company, your county or your state. The cash back that you get from the rebates is normally applied before calculating tax credits.

Federal Solar Incentives

When you hear the term "solar incentives," federal incentives may be the first thing that comes to mind. The solar incentive that you may be most familiar with is the Federal Solar Investment Tax Credit (ITC), which gives you a credit on your taxes equal to a percentage of your solar system's cost.

The ITC applies to a solar system installed on your primary or secondary residence in the United States. The solar system has to have been installed after January 1, 2006 on a property you own for you to claim the credit. The ITC originally paid out 30% of all costs (panels, equipment, accessories and labor), although the covered amount has fluctuated slightly over time between 26-30%. The amount you qualify for will depend on when your solar system was installed. There is no cap on the claim amount.

To find out exactly how much money the ITC could save you, get in touch with your local Allen solar panel installation expert.

The ITC was renewed and increased in scope after the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. The Clean Energy Credit has increased the current credit up to 30% for solar installations undertaken between January 1, 2022 and December 31, 2032. After 2032, the credit percentage will decrease slightly each year until the end of the program in 2035. Starting in 2023, the program expansion will also make credits for energy storage systems even easier to claim.

Click here to learn more about the new Inflation Reduction Act. Your local Allen solar panel installation expert is the best person to answer your questions regarding the new Clean Energy Credit and how it will apply to you.

State & Local Solar Incentives

Some solar incentives may be provided at the state and local level. Like with federal incentives, these might include rebates, tax credits and more. These solar incentives — which might be provided by the state of Ohio, or by your county or municipality — may be offered on an ongoing basis, or for only a limited time.

Next Steps for Installing Solar in Allen

There are a number of different solar incentives: those given by the federal government, those given by the Ohio government and those given by local utility companies, to name a few. The use of solar energy has grown tremendously in the last 15 years, thanks to these incentives. Reach out to your local solar panel installation company today to discover more about the various programs and to save the most money possible on solar panels for your Allen home.