2025 Solar Incentives Guide for Madison, OH - Tax Credits & Rebates

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

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

The term "solar incentives" broadly refers to financial incentives designed to encourage the use of renewable energy by making installing and using solar panels more affordable. Different types of incentives, such as cash back, discounts or monthly utility bill credits, might be available to you. Some incentives may be offered by the Ohio government, by your utility company or by county or municipality, while other incentives are federal. Types of solar incentives might include:

• Rebates: Your solar installer might help you claim a rebate, or partial refund of your purchase, for your solar system. States or counties will also sometimes offer limited-time rebates. If you receive a rebate, that amount will usually be deducted from the total price before any tax credits are calculated.
• Tax Credits: Tax credits lower, dollar-for-dollar, how much income tax you owe the government. These are different from tax deductions.
• Net Metering: Don't forget to speak with your Madison utility company about signing a net metering contract. This will allow you to get a credit towards your utility bill every month for the value of excess energy generated by your solar panels. You could receive either a dollar-for-dollar credit or a percentage of the value.
• Tax Exemptions: Your solar panel system may qualify for both sales tax and property tax exemptions. Sales tax exemptions come into effect at the time of purchase. Property tax exemptions allow you to ignore the value added by your solar panels when you are calculating property taxes on your house.
• Solar Renewable Energy Certificate (SREC): SRECs can be sold to your utility company (or other buyers) for money that normally counts as part of your taxable income. Generally, a certain (small) threshold of energy production must be met before your solar system qualifies for SRECs or other performance-based incentives. SRECs and similar incentives are typically handled by your state government.

Federal Solar Incentives

When people think of solar incentives, federal incentives might be the first thing that comes to mind. An incentive that most people are likely to be familiar with is the Federal Solar Investment Tax Credit (ITC). This is a tax credit for a predetermined percentage of your solar system's cost.

The ITC applies to solar panels installed on your primary or secondary residence in the United States. The solar system must have been installed after January 1, 2006, on a property owned by you for you to claim the credit. Originally, the ITC covered 30% of all system installation costs (panels, labor, accessories and equipment), although the total amount has fluctuated slightly over time between 26-30%. The amount you qualify for will depend on when your solar system was installed. There is no cap on the claim amount.

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

In August 2022, the Inflation Reduction Act made revisions to the ITC, now referred to as the Clean Energy Credit. The new Clean Energy Credit now runs until 2035. American homeowners are now eligible for a 30% credit for solar systems that began installation on or after January 1, 2022, and will be done by December 31, 2032. This new credit will then see a slight annual decrease until its expiration. The program expansion also makes credits for energy storage systems even easier to claim, starting in 2023.

More information about the new Inflation Reduction Act can be found here. The best way to understand how the new Clean Energy Credit will apply to you is to get in touch with your local Madison solar panel installation expert.

State & Local Solar Incentives

Rebates, tax credits and more can be provided at multiple levels. Along with federal solar incentives, there are often state and local ones, too. These incentives — which may be given by the state of Ohio, or by your county or municipality — may be offered for only a limited time, or on an ongoing basis.

Next Steps for Installing Solar in Madison

Nationwide solar energy use has significantly increased in the last 15 years, in part due to the growth in the number of solar incentives. You may get these incentives from your local utility company, the federal government or the Ohio government. It is a good idea to talk to your local Madison solar installer to learn more about these incentives and to ensure that you're getting all the money you can for your solar panels.