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

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

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

Solar incentives are meant to help mitigate the cost of installing a solar panel system on your home. These financial incentives are intended to encourage more homeowners to switch their home over to renewable energy. You may be eligible for various types of incentives, such as discounts, cash back or monthly utility bill credits, depending on your situation. Certain incentives come from your specific utility company, county or municipality, some from the Ohio government and others from the federal government. Some broad categories of solar incentives include:

• Rebates: Solar rebates may be provided by your local utility company, or by your county or state. These rebates are essentially cash back that is applied after you purchase solar panels and before tax credits are calculated.
• Solar Renewable Energy Certificate (SREC): SRECs can be sold to your utility company (or other buyers) for cash that normally counts as part of your taxable income. Generally, there is a small threshold of energy production to meet before your solar system qualifies for SRECs or other performance-based incentives. SRECs and similar incentives are normally handled at the state level.
• Net Metering: You may be able to sign a net metering contract with your Lima utility company. This agreement may apply to all or a percentage of the excess electricity that is generated by your solar panels. They will then subtract this value from your monthly utility bill.
• Tax Credits: Tax credits decrease, dollar-for-dollar, the total amount of tax you owe the federal government. Tax credits are different from tax deductions.
• Tax Exemptions: Your solar system might qualify for both sales tax and property tax exemptions. Sales tax exemptions are effective at the time of purchase. Property tax exemptions allow you to ignore the value that solar panels add when calculating property taxes on your house.

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Federal Solar Incentives

When thinking about solar incentives, federal incentives are likely the first thing that comes to mind. The Federal Solar Investment Tax Credit, or ITC, is likely the most commonly known federal solar incentive. The ITC provides you with a tax credit for a specific percentage of your solar system's cost.

The ITC applies towards solar systems installed after January 1, 2006, and under this program you can deduct from your taxes a percentage of the total cost of solar panels, equipment, accessories and labor. This credit can be claimed on solar panels installed on a primary or secondary residence in the United States that you own. The original claim amount was 30% of the total cost, although the amount you can claim may range between 26-30%. There is no maximum amount you can claim.

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

The Inflation Reduction Act, passed in August 2022, expanded and extended the ITC (as well as retitling it the Clean Energy Credit). The Clean Energy Credit lasts until 2035. Solar installation projects started after January 1, 2022, and completed by the end of 2032 may qualify for a 30% tax credit. The amount will be decreased slightly each year until the current program ends. Starting in 2023, the program expansion will also make claiming credit for energy storage systems easier than ever before.

More information about the new Inflation Reduction Act can be found here. To understand how the new Clean Energy Credit applies to you, talk to your local Lima solar installation company.

State & Local Solar Incentives

There are often also state solar incentives in addition to those provided by the federal government. Tax credits, rebates and more may be available at a more local level. Certain incentives are ongoing, while others may only be available for a limited time. They might be offered by the Ohio government, or by your county or municipality.

Next Steps for Installing Solar in Lima

The large number of solar incentives available has enormously increased the nationwide adoption of solar energy over the past 15 years. You may receive solar incentives from your local utility company, the Ohio government or the federal government. If you're prepared to switch over to solar energy, reaching out to your local Lima solar panel installation expert is a great first step.