2024 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/

Solar incentives are intended to make renewable energy usage more affordable via financial incentives for individuals who install solar panels on their homes. The incentives can include upfront discounts, cash back or credit towards your monthly utility bill. Some incentives are given by the federal government, some by the Ohio government and some by your utility company, county or municipality. Types of solar incentives might include:

• Solar Renewable Energy Certificate (SREC): SRECs are credits that can be sold to your utility company (or other buyers) for money that normally counts as part of your taxable income. In most cases, a certain (small) threshold of energy production must be met before your solar system can earn SRECs or other performance-based incentives. These kinds of incentives are generally handled by your state government.
• Tax Exemptions: Sales tax exemptions go into effect at the time of purchase for your solar system. Property tax exemptions let you exclude the value that your solar panels add when calculating the amount of property tax you need to pay on your house.
• Rebates: Solar rebates can be provided by your state or county, or by your local utility company. These rebates are essentially partial refunds that are applied after you pay for solar panels and before tax credits are calculated.
• Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the federal government. (This is different from a tax deduction.)
• Net Metering: Net metering becomes relevant once your solar system is up and running. If you have a net metering agreement with your Defiance utility company, it will subtract the value of the excess energy produced by your solar system from your utility bill each month. In some locations, this is a dollar-for-dollar credit, while in other places you may make back a percentage of the value.

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Federal Solar Incentives

Federal incentives are the type of incentives that you are most likely to have heard of. The solar incentive that you're most familiar with is probably the Federal Solar Investment Tax Credit (ITC), which gives you a credit on your taxes equal to a certain percentage of the cost of your solar system.

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. This credit can be claimed 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 claim amount.

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

The Inflation Reduction Act, passed in August 2022, made some changes to the ITC (as well as renaming it to the Clean Energy Credit). The new Clean Energy Credit extends until 2035. Homeowners are now eligible for 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 see a slight annual decrease until it expires. Starting in 2023, the expansion will also make credits for energy storage systems even easier to claim.

More information about the new Inflation Reduction Act can be found here. To fully understand how the new Clean Energy Credit will apply to you, reach out to your local Defiance solar installation expert.

State & Local Solar Incentives

Some solar incentives may be offered at the local or state level. As with federal incentives, these could include rebates, tax credits and more. These incentives — which might be given by your county or municipality, or by the state of Ohio — might be offered for only a limited time, or on an ongoing basis.

Next Steps for Installing Solar in Defiance

Solar incentives might be provided by the Ohio government, the federal government or your local utility company. The variety of solar incentives available has facilitated the nationwide growth of solar energy use in the last 15 years. If you're prepared to make the change to solar energy, getting in touch with your local Defiance solar panel installation expert is an excellent place to start.