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

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

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

Solar incentives are intended to make renewable energy usage more affordable through financial incentives to help people install solar panels on their homes. You might qualify for several types of incentives, such as discounts, cash back or credit towards your monthly utility bill, depending on your situation. Certain incentives come from your specific utility company, county or municipality, some from the Ohio government and others from the federal government. You might qualify for any of the following types of solar incentives:

• Solar Renewable Energy Certificate (SREC): SRECs and other similar performance-based incentives are typically handled at the state level. Once your solar panel system meets a predetermined threshold (normally a small amount of energy production), you are eligible to receive SRECs that you can then sell to your utility company or other buyers. The money you make from the sale is generally considered part of your taxable income.
• Net Metering: Don't forget to speak to your Cincinnati utility company about signing a net metering agreement. This allows you to get a credit towards your utility bill every month for the value of excess energy your solar panels generate. You might receive either a dollar-for-dollar credit or a percentage of the value.
• Tax Exemptions: Sales tax exemptions go into effect at the time of purchase for your solar panels. Property tax exemptions let you exclude the value that your solar panels add when you calculate how much property tax you need to pay on your home.
• Rebates: Solar rebates can be offered by your local utility company, or by your county or state. These rebates work as cash back that is applied after you purchase solar panels and before tax credits are calculated.
• Tax Credits: Tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the federal government. (This is different from a tax deduction.)

Federal Solar Incentives

Federal incentives are the kind of incentives that you are most likely to have some knowledge of. A federal incentive that most people are likely to be familiar with is the Federal Solar Investment Tax Credit (ITC). The ITC is a tax credit for a specified percentage of your solar system's cost.

The ITC covers solar systems installed after January 1, 2006 and allows you to deduct from your taxes a percentage of the total cost of solar panels, equipment, accessories and labor. This credit can apply towards 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 certain projects may qualify for only 26%, depending on the details. There is no maximum amount you can claim.

Your local Cincinnati solar panel installer can provide more information about the ITC and how it applies to your situation.

In August 2022, the Inflation Reduction Act expanded and extended the ITC, now referred to as the Clean Energy Credit. The new Clean Energy Credit is valid until 2035. You can now receive a 30% credit for solar systems that began installation after January 1, 2022 and are completed by the end of 2032. This credit will then decrease annually until its expiration. The expansion also makes it easier to get credit for energy storage systems, beginning in 2023.

Click here to learn more about the new Inflation Reduction Act. To better understand how the new Clean Energy Credit will apply to you, get in touch with your local Cincinnati solar installation expert.

State & Local Solar Incentives

Not all solar incentives are federal; tax credits, rebates and more may be offered at the local or state level. Some incentives are ongoing, while others are only available for a limited time. They may be offered by your county or municipality, or by the Ohio government.

Next Steps for Installing Solar in Cincinnati

There are a number of different solar incentives: those offered by local utility companies, those offered by the Ohio government and those offered by the federal government, to name a few. Solar energy utilization has increased enormously in the last 15 years, thanks to these incentives. Speaking with your local Cincinnati solar panel installer is a great first step towards making sure you get all the incentives you qualify for when you switch to solar energy.