2025 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/

The phrase "solar incentives" includes a range of financial incentives put in place to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. Various types of incentives, like cash back, discounts or monthly utility bill credits, may be available to you. Some incentives may be offered by the state of Ohio, by your utility company or by county or municipality, while others are federal. Types of solar incentives might include:

• Tax Credits: Unlike tax deductions, tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the federal government.
• Solar Renewable Energy Certificate (SREC): SRECs and other performance-based incentives are normally handled at the state level. Once your solar panel system meets a certain threshold (normally a small amount of energy production), you are eligible to receive SRECs that can be sold to your utility company or other buyers. The money you make from the sale is usually considered part of your taxable income.
• Net Metering: Net metering factors in once your solar system is up and running. If you've signed a net metering agreement with your Cleveland 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 might get refunded a percentage of the value.
• Rebates: Solar rebates may be offered by your local utility company, or by your county or state. These rebates work as partial refunds that are applied after you pay for a solar system and before tax credits are calculated.
• Tax Exemptions: Sales tax exemptions are effective at the time of purchase for your solar system. Property tax exemptions let you exclude the added value of your solar system when calculating how much property tax you need to pay on your home.

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Federal Solar Incentives

Federal solar incentives are likely to be the first thing that you think of when thinking about solar incentives. The solar incentive that you're most familiar with is probably the Federal Solar Investment Tax Credit (ITC), which provides a credit on your taxes equal to a predetermined percentage of your solar system's cost.

The ITC can be applied to solar panels installed after January 1, 2006, on a primary or secondary residence that you own in the United States. The credit initially covered 30% of the total cost – for panels, accessories, labor and equipment – although the percentage may range from 26-30%, depending on the installation date of your solar system. There is no cap on the claim amount.

Your local Cleveland solar panel installer can offer more information about the ITC and how it might apply to your situation.

In August 2022, the Inflation Reduction Act laid out new provisions for the ITC, now called the Clean Energy Credit. Homeowners can now qualify for a credit of 30% of the total costs of solar system installation for projects that began after January 1, 2022, and will be finished by the end of 2032. The credit percentage will then decrease yearly until the Clean Energy Credit ends in 2035. 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. Your local Cleveland solar panel installation experts can answer your questions and explain how the new Clean Energy Credit applies to you.

State & Local Solar Incentives

Some solar incentives are often also offered at the local or state level. Similar to federal incentives, these may include rebates, tax credits and more. Incentives may be given by the state of Ohio, or by your county or municipality. Certain incentives might only be available for a limited time, while others are ongoing.

Next Steps for Installing Solar in Cleveland

You can apply for solar incentives from the Ohio government and the federal government, as well as from your local utility company. Growing availability of solar initiatives over the last 15 years has helped greatly increase nationwide adoption of solar energy. Reach out to your local solar panel installer today to discover more about the various programs and to save as much money as possible on a solar system for your Cleveland home.