2025 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" generally refers to financial incentives put in place by solar companies and the government to encourage the adoption and use renewable energy by making the installation and use of solar panels more affordable. Incentives might include things like discounts, cash back or credit on your utility bill each month. Some incentives are provided by the federal government, while others are provided by the state of Ohio or your specific utility company, county or municipality. Some broad categories of solar incentives include:

• Solar Renewable Energy Certificate (SREC): SRECs can be sold to your utility company (or other buyers) for money that typically becomes part of your taxable income. Generally, you must meet a certain (small) threshold of energy production before your solar system is eligible for SRECs or other performance-based incentives. Incentives like these are typically handled at the state level.
• Rebates: Rebates, or cash back after a purchase, are usually applied before any solar tax credits are calculated. Rebates can be given by your local utility company, by your county or by your state.
• Net Metering: Net metering is an incentive you can get once your solar panels are up and running. If you have in place a net metering agreement with your Lorain utility company, the company will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some locations, this credit is dollar-for-dollar, while in other places you might receive a refund equivalent to a percentage of the value.
• Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the federal government. (A tax credit is different from a tax deduction.)
• 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, which allows you to ignore the value added by your solar system when paying property tax on your home.

Federal Solar Incentives

When someone says "solar incentives," you probably think of federal incentives first. You've likely heard of the Federal Solar Investment Tax Credit, or ITC. The ITC is a tax credit that reduces your taxes by a certain percentage of the money you spend on solar panels for your home.

The ITC covers solar systems installed after January 1, 2006, and allows you to deduct from your taxes a percentage of the total cost of solar panels, accessories, labor and equipment. This credit can apply towards a solar panel system installed on a primary or secondary residence in the United States that you own. The original amount you could claim was 30% of the total cost, although depending on when the project was completed, your credit may range from 26-30%. There is no maximum claim amount.

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

In August 2022, the ITC (now called the Clean Energy Credit) was bolstered by the passage of the Inflation Reduction Act. The Clean Energy Credit bolsters the current credit, increasing it up to 30% for solar installation projects started after January 1, 2022, and completed by the end of 2032. At this point, the credit percentage will be reduced slightly each year until the program expires in 2035. The expansion to the program also makes credits for energy storage systems even easier to claim, starting in 2023.

Click here to learn more about the new Inflation Reduction Act. Your local Lorain solar panel installer can answer any questions you have and explain how the new Clean Energy Credit may apply to you.

State & Local Solar Incentives

Some solar incentives are often also provided at the state and local level. As with federal incentives, these might include tax credits, rebates and more. Incentives might be handled by the state of Ohio, or by your county or municipality. Certain incentives may be available for only a limited time, while others are ongoing.

Next Steps for Installing Solar in Lorain

Solar incentives may come from your local utility company, the federal government or the Ohio government. The variety of solar incentives available has facilitated the nationwide growth of solar energy use in the last 15 years. Talking to your local Lorain solar panel installation company is the best first step towards getting the most money possible when you switch to solar energy.