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

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

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

The term "solar incentives" covers a wide range of financial incentives implemented to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. Various kinds of incentives, like discounts, cash back or credit towards your monthly utility bill, might be available to you. Some incentives may be provided via the state of Ohio, by your utility company or by county or municipality, while other incentives are federal. Types of solar incentives might include:

• Solar Renewable Energy Certificate (SREC): SRECs and similar other performance-based incentives may be available to you if your solar system produces more than a specified (generally small) amount of electricity. These types of incentives are usually handled at the state level. You can sell your SRECs to your utility company or other buyers, and the money you receive in return is usually considered part of your taxable income.
• Rebates: Solar rebates can be provided by your local utility company, or by your state or county. These rebates work as partial refunds that are applied after you pay for solar panels and before tax credits are calculated.
• Net Metering: Net metering is an incentive you can get after your solar panels are up and running. If you have a net metering agreement with your Lorain 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 receive a refund equivalent to a percentage of the value.
• Tax Credits: Tax credits lower, dollar-for-dollar, how much income tax you owe the government. Tax credits differ from tax deductions.
• Tax Exemptions: These can come in the form of property tax exemptions, which allow you to exclude the value added by your solar panels when paying property tax on your house. They may also include exemptions on sales tax at the time of purchase.

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Federal Solar Incentives

Federal incentives are the kind of incentives that you are most likely to have some familiarity with. One of the incentives many people are probably familiar with is the Federal Solar Investment Tax Credit (ITC). This incentive is a tax credit for a specified percentage of the cost of your solar system.

The ITC can be applied to solar systems installed after January 1, 2006, and lets you deduct from your taxes a percentage of the total cost of solar panels, accessories, labor and equipment. You can claim this credit for solar panels installed on a primary or secondary residence in the United States that you own. Originally, you could claim 30% of the total cost, although the amount you can claim may range between 26-30%. There is no maximum amount you can claim.

To better understand exactly how much the ITC could save you, talk to your local Lorain solar panel installer.

In August 2022, the Inflation Reduction Act laid out new provisions for the ITC, now titled the Clean Energy Credit. For solar systems installed between January 1, 2022, and December 31, 2032, homeowners may be eligible for a credit equal to 30% of the total cost. The percentage will then decrease annually until the Clean Energy Credit ends in 2035. Starting in 2023, the program expansion will also make credits for energy storage systems even easier to claim.

Click here to learn more about the new Inflation Reduction Act. Your local Lorain solar panel installers are the best people to answer your questions about the new Clean Energy Credit and how it may apply to you.

State & Local Solar Incentives

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

Next Steps for Installing Solar in Lorain

There are many types of solar incentives: those offered by local utility companies, those provided by the Ohio government and those offered 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 prepared to make the change to solar energy, talking to your local Lorain solar panel installation expert is a great first step.