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

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

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

Solar incentives are intended to make renewable energy usage more affordable through financial incentives for those who install solar panels on their homes. Various kinds of incentives, like cash back, discounts or credit towards your monthly utility bill, may be available to you. Some incentives may be handled by the Ohio government, by your utility company or by county or municipality, while other incentives are federal. Categories of solar incentives include:

• Tax Credits: Tax credits reduce, dollar-for-dollar, the total amount of tax you owe the federal government. Tax credits differ from tax deductions.
• Net Metering: Net metering is an incentive you can get once your solar system is up and running. If you have in place a net metering agreement with your Cleveland utility company, it will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some places, this credit is dollar-for-dollar, while in other places you may receive a refund equivalent to a percentage of the value.
• Rebates: Some solar companies will help you claim a rebate, or partial refund after purchase, for your solar panels. States or counties will also offer limited-time rebates at various times. Any rebates you receive will usually come off your total price before tax credits are calculated.
• Solar Renewable Energy Certificate (SREC): SRECs and other performance-based incentives might be available to you if the solar system on your home produces over a specified (usually small) amount of electricity. These types of incentives are generally handled at the state level. You can sell your SRECs to your utility company or other buyers, and the money you make is typically considered part of your taxable income.
• Tax Exemptions: Sales tax exemptions are effective at the point of sale for your solar system. Property tax exemptions allow you to exclude the value that your solar panels add when calculating how much property tax you need to pay on your house.

Federal Solar Incentives

Federal solar incentives are likely the first thing that you think of when thinking about solar incentives. You've likely heard of the Federal Solar Investment Tax Credit, or ITC. This is a tax credit that reduces your taxes by a specified percentage of the money you spend on solar panels for your home.

The ITC can be applied to solar panels installed on your primary or secondary residence in the United States. The solar system must have been installed on a property you own after January 1, 2006 for you to be eligible for the credit. The ITC initially covered 30% of all installation costs (panels, accessories, equipment and labor), although the covered amount has fluctuated over the last few years between 26-30%. The installation date of your solar system will determine what percentage you are eligible for. There is no cap on the claim amount.

Wondering how the ITC applies to your specific situation? Contact your local Cleveland solar panel installation expert to get more information.

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. For solar system installations that begin after January 1, 2022 and are completed by the end of 2032, homeowners may be eligible for a credit equal to 30% of the total cost. This percentage will decrease annually after 2032 until the Clean Energy Credit expires in 2035. The program 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 Cleveland solar panel company can answer any questions you have and explain how the new Clean Energy Credit will apply to you.

State & Local Solar Incentives

There are more than just federal solar incentives; rebates, tax credits and more might also be offered at the local or state level. These incentives might be distributed by the Ohio government, or by your county or municipality. Some incentives may be ongoing, while others are available for a limited time.

Next Steps for Installing Solar in Cleveland

Solar energy use nationwide has gone up tremendously in the last 15 years, in part due to the increase in availability of solar incentives. You may get these incentives from the Ohio government, the federal government or your local utility company. Talking to your local Cleveland solar panel installation company is the right first step towards getting all the incentives you qualify for when you switch to solar energy.