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

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

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

The phrase "solar incentives" includes a 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 kinds of incentives, like cash back, discounts or monthly utility bill credits, may be available to you. Some incentives may be offered by the state of Ohio, by your utility company or by county or municipality, while others are federal. You might qualify for any of the following types of solar incentives:

• Tax Credits: Tax credits lower, dollar-for-dollar, the amount of income tax you owe the federal government. These are different from tax deductions.
• Rebates: Rebates, or partial refunds after a purchase, are usually given before any solar tax credits are calculated. Rebates might be offered by your local utility company, by your county or by your state.
• Net Metering: Net metering becomes relevant once your solar system is up and running. If you have a net metering agreement with your Middletown utility company, it will subtract the value of the excess energy your solar system produces from your utility bill each month. In some places, this credit is dollar-for-dollar, while in other areas you might make back 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 normally counts as part of your taxable income. In most cases, there is a small threshold of energy production to meet before your solar system is eligible for SRECs or other performance-based incentives. SRECs and similar incentives are typically handled at the state level.
• Tax Exemptions: Your solar panels could 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 added value of the solar panels when you are calculating property taxes on your house.

Federal Solar Incentives

When thinking about solar incentives, federal incentives are likely the first thing that comes to mind. The solar incentive that you're most familiar with is probably the Federal Solar Investment Tax Credit (ITC), which provides a credit on your taxes equal to a predetermined percentage of your solar system's cost.

The ITC can be credited towards the value of a solar system installed on your primary or secondary residence in the United States. The solar panels have to have been installed on a property you own after January 1, 2006 for you to be eligible for the credit. The ITC initially covered 30% of all installation costs (panels, accessories, equipment and labor), although the amount has fluctuated over the last few years between 26-30%. The amount you qualify for will depend on when your solar system was installed. There is no cap on the amount you can claim.

Speaking with your local Middletown solar panel installer is the best way to understand how the ITC could apply to you.

In August 2022, the ITC (now referred to as the Clean Energy Credit) was bolstered by the passage of the Inflation Reduction Act. 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. This amount will then decrease slightly on a yearly basis until the current program ends. Starting in 2023, the expansion to the program will also make credits for energy storage systems even easier to claim.

More information about the new Inflation Reduction Act can be found here. To better understand how the new Clean Energy Credit might apply to you, reach out to your local Middletown solar installation company.

State & Local Solar Incentives

In addition to those provided at the federal level, there are often also state solar incentives. Rebates, tax credits and more can be offered at a more local level. These incentives might be handled by the Ohio government, or by your county or municipality. Some are ongoing, while others are available for a limited time.

Next Steps for Installing Solar in Middletown

There are many types of solar incentives: those given by local utility companies, those given by the Ohio government and those given by the federal government, to name a few. The use of solar energy has grown enormously in the last 15 years, partially due to these incentives. Your local Middletown solar panel installer can give you more information about which incentives you can apply for, and get you on track to switch to renewable energy today.