2024 Solar Incentives Guide for Lancaster, OH - Tax Credits & Rebates

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

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 kinds of incentives, such as cash back, discounts or credit towards your monthly utility bill, might be available to you. Certain incentives may be provided via the state of Ohio, by your utility company or by county or municipality, while other incentives are federal. Categories of solar incentives include:

• Solar Renewable Energy Certificate (SREC): SRECs and other performance-based incentives are generally handled by your state government. Once your solar system meets the threshold (usually a small amount of energy production), you are eligible to receive SRECs that can then be sold to your utility company or other buyers. The money you receive is usually considered part of your taxable income.
• Tax Exemptions: These might come in the form of property tax exemptions, which would allow you to ignore the value added by your solar panels when paying taxes on your home. They may also include exemptions on sales tax at the time of purchase.
• Tax Credits: These credits are dollar-for-dollar reductions (not deductions) in how much in taxes you owe the government.
• Net Metering: Net metering is an incentive you can get once your solar panels are up and running. If you have a net metering agreement with your Lancaster utility company, it will subtract the value of the excess energy your solar system produces from your monthly utility bill. In some locations, this is a dollar-for-dollar credit, while in others you might get refunded a percentage of the value.
• Rebates: Solar companies may help you claim a rebate, or partial refund of your purchase, for your solar system. States or counties will also offer limited-time rebates at various times. The value of a rebate will usually be deducted from the total price before any tax credits are calculated.

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Federal Solar Incentives

When thinking about solar incentives, you likely think of federal incentives first. A federal incentive many people are likely to be familiar with is the Federal Solar Investment Tax Credit (ITC). This incentive is a tax credit for a specific percentage of the cost of your solar system.

The ITC can be applied to solar panels installed on your primary or secondary residence in the United States. The solar panels must have been installed after January 1, 2006, on a property you own for you to claim the credit. Originally, the ITC covered 30% of all costs (panels, accessories, equipment and labor), although the covered amount has fluctuated slightly over the 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 amount you can claim.

Have questions about how the ITC applies to your specific situation? Contact your local Lancaster solar panel installation expert to get more information.

The Inflation Reduction Act, passed in August 2022, expanded and extended the ITC (as well as renaming it to the Clean Energy Credit). The Clean Energy Credit re-raises the credit up to 30% for solar installations undertaken between January 1, 2022, and December 31, 2032. At this point, the credit percentage will be reduced slightly each year until the end of the program in 2035. Starting in 2023, it will also be easier to obtain credits for energy storage systems under this new program.

Click here to learn more about the new Inflation Reduction Act. To better understand how the new Clean Energy Credit applies to you, get in touch with your local Lancaster solar installation company.

State & Local Solar Incentives

In addition to federal solar incentives, there are often also state ones. Rebates, tax credits and more can be offered at a more local level. These solar incentives — which might be handled 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 Lancaster

The nationwide use of solar energy has significantly increased in the last 15 years, in part thanks to the growth in the number of solar incentives. You may get these incentives from the federal government, the Ohio government or your local utility company. Getting in touch with your local Lancaster solar panel installation company is the best first step towards making sure you get all the incentives you qualify for when you switch to solar energy.