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

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

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

Solar incentives are meant to encourage people to make the switch to renewable energy by offering incentives that lower the financial burden of solar panel installation and use. You might qualify for various types of incentives, such as cash back, discounts or credit towards your monthly utility bill, depending on your situation. Some incentives come from your specific utility company, county or municipality, some from the state of Ohio and others from the federal government. You might qualify for any of the following types of solar incentives:

• Tax Exemptions: Your solar system might qualify for exemptions on both sales and property tax. Sales tax exemptions are effective at the time of purchase. Property tax exemptions let you exclude the value added by your solar panels when calculating property taxes on your house.
• Net Metering: Net metering factors in once your solar panels are up and running. If you've signed a net metering agreement with your Cleveland Heights utility company, the company will subtract the value of the excess energy your solar system produces from your monthly utility bill. In some areas, this is a dollar-for-dollar credit, while in other areas you might make back a percentage of the value.
• Rebates: A solar rebate is a partial refund credited to your account after you've paid for your solar panels. These could be offered by your local utility company, your county or your state. The rebates are usually applied before calculating tax credits.
• 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.)
• 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. In most cases, you must meet a certain (small) threshold of energy production before your solar system qualifies for SRECs or other performance-based incentives. These kinds of incentives are normally handled at the state level.

Federal Solar Incentives

When you hear the term "solar incentives," federal incentives may be the first thing that comes to mind. An incentive that most people are likely to be familiar with is the Federal Solar Investment Tax Credit (ITC). This is a tax credit for a specific percentage of your solar system's cost.

The ITC can be applied to the total cost of installing a solar system, including the panels themselves as well as equipment, accessories and labor. You can claim this credit for panels installed after January 1, 2006 on a primary or secondary residence that you own and that is located in the United States. Originally set at 30% of total costs, the credit has fluctuated over time, and you may qualify for different amounts depending on when your project was completed. There is no maximum amount you can claim.

Your local Cleveland Heights solar panel installation expert can give you more information about the ITC and how it may apply to your situation.

The Inflation Reduction Act, passed in August 2022, added more provisions to the ITC (as well as retitling it the Clean Energy Credit). The Clean Energy Credit has increased the current credit up to 30% for solar systems installed between 2022 and 2032. After this, the percentage will decrease slightly each year until the program expires in 2035. The expansion to the program also makes it easier to get credit for energy storage systems, starting in 2023.

More information about the new Inflation Reduction Act can be found here. To understand how the new Clean Energy Credit will apply to you, get in touch with your local Cleveland Heights solar installers.

State & Local Solar Incentives

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

Next Steps for Installing Solar in Cleveland Heights

There are many types of solar incentives: those given by local utility companies, those given by the federal government and those given by the Ohio government, to name a few. Solar energy use has grown tremendously in the last 15 years, partially due to these incentives. If you're ready to switch over to solar energy, talking to your local Cleveland Heights solar panel installation expert is a great first step.