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

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

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

The term "solar incentives" covers a wide range of financial incentives designed to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. The incentives might include cash back, upfront discounts or monthly credits towards your utility bill. Some incentives are provided by the federal government, some by the state of Ohio and some by your utility company, county or municipality. You might qualify for any of the following types of solar incentives:

• Tax Credits: Tax credits lower, dollar-for-dollar, the total amount of tax you owe the federal government. Tax credits are different from tax deductions.
• Net Metering: You can sign a net metering contract with your Defiance utility company, that may apply to all or a percentage of the excess electricity that is generated by your solar panels. Your utility company will then subtract this value from your monthly utility bill.
• Rebates: Some solar companies will help you claim a rebate, or partial refund of your purchase, for your solar system. Counties or states will also sometimes offer limited-time rebates. The value of a rebate will usually come off your total price before tax credits are calculated.
• Solar Renewable Energy Certificate (SREC): SRECs and similar other performance-based incentives may be available to you if you have a solar system that produces more than a specified (generally small) amount of electricity. Performance-based incentives are generally handled by the state government. 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: Tax exemptions may come in one of two forms. First, there is sales tax exemption, which is applied when you purchase solar panels. The second is property tax exemption. This allows you to exclude the added value of your solar system when calculating property tax for your house.

Federal Solar Incentives

Federal incentives are the kind of incentives that you are most likely to have heard of. You might have heard of the Federal Solar Investment Tax Credit, or ITC. This incentive is a tax credit that reduces your taxes by a certain percentage of the money you spend on your solar system.

The ITC was originally for 30% of the cost of solar system installation, although it has fluctuated slightly over the years between 26-30%. The installation date of your solar system will determine what percentage you qualify for. The total installation cost includes the panels themselves as well as the cost of labor, equipment and accessories. There is no maximum claim amount. The ITC can be applied to solar systems installed after January 1, 2006 on your primary or secondary residence. The residence must be in the United States and owned by you.

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

The Inflation Reduction Act, passed in August 2022, added more provisions to the ITC (as well as renaming it to the Clean Energy Credit). The Clean Energy Credit bolsters the current credit, increasing it up to 30% for solar installations undertaken between January 1, 2022 and December 31, 2032. At this point, the percentage will decrease slightly each year until the program expires in 2035. Starting in 2023, the expansion to the program will also make credits for energy storage systems even easier to claim.

Click here to learn more about the new Inflation Reduction Act. The easiest way to learn more about how the new Clean Energy Credit might apply to you is to get in touch with your local Defiance solar panel installation expert.

State & Local Solar Incentives

Some solar incentives are often also provided by state and local governments. As with federal incentives, these could include tax credits, rebates and more. These incentives might be provided by the Ohio government, or by your county or municipality. Certain incentives are ongoing, while others are available for a limited time.

Next Steps for Installing Solar in Defiance

There are many kinds of solar incentives: those provided by local utility companies, those provided by the Ohio government and those provided by the federal government, to name a few. Solar energy utilization has grown tremendously in the last 15 years, partially thanks to these incentives. When you're ready to make the switch to solar energy, talking to your local Defiance solar panel installation expert is an excellent place to start.