2023 Solar Incentives Guide for Mentor, OH - Tax Credits & Rebates

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

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

The phrase "solar incentives" covers a wide 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 types of incentives, including cash back, discounts or credit towards your monthly utility bill, might be available to you. Certain incentives may be handled by the state of Ohio, by your utility company or by county or municipality, while others are federal. Categories of solar incentives include:

• Tax Exemptions: Your solar system might qualify for both sales tax and property tax exemptions. Sales tax exemptions come into effect at the time of purchase. Property tax exemptions let you ignore the value that solar panels add when calculating property taxes on your home.
• Net Metering: Make sure you talk to your Mentor utility company about signing a net metering contract. This allows you to get a credit towards your monthly utility bill for the value of excess energy your solar panels generate. You may receive either a dollar-for-dollar credit or a percentage of the value.
• Solar Renewable Energy Certificate (SREC): SRECs are credits that can be sold to your utility company (or other buyers) for cash that typically becomes part of your taxable income. Generally, a certain (small) threshold of energy production must be met before your solar system is eligible for SRECs or other performance-based incentives. These kinds of incentives are normally handled by your state government.
• Rebates: Some solar companies will help you claim a rebate, or partial refund after purchase, for your solar panels. States or counties will also offer limited-time rebates at various times. Any rebates you receive will usually be deducted from the total price before tax credits are calculated.
• Tax Credits: Tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the federal government. (This is different from a tax deduction.)

Federal Solar Incentives

When you think about solar incentives, you likely think of federal incentives first. You might have heard of the Federal Solar Investment Tax Credit, or ITC. The ITC is a tax credit that reduces your taxes by a specified percentage of the money you spend on your solar system.

The ITC is applied to the total cost of solar system installation, including the panels themselves as well as labor, accessories and equipment. You can claim this credit for panels installed after January 1, 2006 on a primary or secondary residence located in the United States that you own. From its original value of 30% of the total cost, the credit has fluctuated slightly between 26-30%, and you may qualify for varying percentages depending on when your project was completed. There is no maximum amount you can claim.

To more fully understand how the ITC might apply to your situation, contact your local Mentor solar panel installation expert and request more information.

In August 2022, the Inflation Reduction Act laid out new provisions for the ITC, now called the Clean Energy Credit. The new Clean Energy Credit now runs until 2035. You can now receive 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 the date of expiration. Starting in 2023, the expansion will also make claiming credit for energy storage systems easier than ever before.

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

State & Local Solar Incentives

Some solar incentives may be provided by state and local governments. Like with federal incentives, these might include tax credits, rebates and more. Certain incentives are ongoing, while others are offered for only a limited time. Local solar incentives may come from your county or municipality, or from the Ohio government.

Next Steps for Installing Solar in Mentor

Solar incentives may be provided by your local utlity company, the Ohio government or the federal government. The variety of available solar incentives has facilitated the nationwide growth of solar energy use in the last 15 years. Speaking with your local Mentor solar panel installation expert is a great first step towards getting the most money possible when you switch to solar energy.