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

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

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

Solar incentives mitigate the cost of installing a solar panel system on your home. This category of financial incentives is in place to encourage more Americans to switch their home over to renewable energy. Incentives may include things like discounts, cash back or credit on your utility bill each month. Some incentives are offered by the federal government, while others are handled by the state of Ohio or your specific utility company, county or municipality. Categories of solar incentives include:

• Rebates: A solar rebate is a partial refund given after you've purchased your solar system. Rebates could be offered by your local utility company, your county or your state. The rebates are usually applied before calculating tax credits.
• Tax Credits: These credits are dollar-for-dollar reductions (not deductions) in how much in taxes you owe the government.
• Net Metering: Net metering is an incentive you can get once your solar system is up and running. If you've signed a net metering agreement with your Chillicothe utility company, the company will subtract the value of the excess energy your solar system produces from your utility bill each month. In some places, this is a dollar-for-dollar credit, while in other places you may make back a percentage of the value.
• Solar Renewable Energy Certificate (SREC): In general, solar systems that produce more than a predetermined (normally small) amount of electricity will qualify for SRECs or other similar performance-based incentives. SRECs and performance-based incentives in general are typically provided by your state government. When you receive an SREC, you can sell it to your utility company or another buyer, and the money you receive is normally considered part of your taxable income.
• Tax Exemptions: Sales tax exemptions go into effect at the point of sale for your solar system. Property tax exemptions let you exclude the added value of your solar system when calculating the amount of property tax you need to pay.

Federal Solar Incentives

Federal solar incentives are probably the first thing that comes to mind when thinking about solar incentives. You've likely heard of the Federal Solar Investment Tax Credit, or ITC. The ITC is a tax credit that reduces your taxes by a certain percentage of the money you spend on your solar system.

The ITC can be applied to solar systems installed after January 1, 2006 and lets you deduct from your taxes a percentage of the total cost of solar panels, equipment, accessories and labor. You can receive this credit for solar panels installed on a primary or secondary residence in the United States that you own. The original amount you could claim was 30% of the total cost, although the amount you can claim may range between 26-30%. There is no maximum amount you can claim.

Your local Chillicothe solar panel installation expert can provide you with more information about the ITC and how it applies to your situation.

The ITC has been renewed and expanded following the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. Under the new program, solar installation projects that are completed between 2022 and 2032 might qualify for a 30% tax credit. This percentage will then see a slight annual decrease until the current Clean Energy Credit expires in 2035. The expansion also makes claiming credit for energy storage systems easier than ever before, starting in 2023.

More information about the new Inflation Reduction Act can be found here. Your local Chillicothe solar panel installer can answer your questions and explain how the new Clean Energy Credit applies to you.

State & Local Solar Incentives

In addition to federal solar incentives, there are often also state ones. Rebates, tax credits and more can be offered at a more local level. Certain incentives are ongoing, while others are offered for only a limited time. These local incentives could come from the Ohio government, or from your specific county or municipality.

Next Steps for Installing Solar in Chillicothe

The nationwide use of solar energy has significantly increased in the last 15 years, in part thanks to the proliferation of solar incentives. You might receive these incentives from the Ohio government, the federal government or your local utility company. We suggest talking to your local Chillicothe solar installation company for more information about these incentives and to make sure that you're getting all of the money you can for your solar panels.