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

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

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

Solar incentives mitigate the cost of installing a solar panel system on your home. This category of financial incentives is in place to encourage more homeowners to switch to renewable energy. Incentives could include things like discounts, cash back or credit towards your monthly utility bill. Some incentives are offered by the federal government, while others are handled by the state of Ohio or your specific utility company, county or municipality. Some solar incentives you might qualify for are:

• Tax Exemptions: Tax exemptions may come in one of two forms. First, there is sales tax exemption, 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 house.
• Tax Credits: Tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the federal government. (A tax credit is different from a tax deduction.)
• Rebates: A solar rebate is a partial refund given after you've purchased your solar panels. These could be offered by your local utility company, your county or your state. The discount that rebates offer is normally applied to the price of solar panels before tax credits are calculated.
• Net Metering: You may be able to sign a net metering contract with your Montgomery utility company that will apply to all or a percentage of the excess electricity that is generated by your solar panels. Your utility company will then subtract this value from your utility bill each month.
• Solar Renewable Energy Certificate (SREC): SRECs can be sold to your utility company (or other buyers) for cash that typically becomes part of your taxable income. In most cases, you must meet a certain (small) threshold of energy production before your solar system can earn SRECs or similar performance-based incentives. SRECs and similar incentives are normally handled by your state government.

Federal Solar Incentives

Federal incentives are the type of incentives that you are most likely to have some knowledge of. The solar incentive that you may be most familiar with is the Federal Solar Investment Tax Credit (ITC), which provides a credit on your taxes equal to a percentage of your solar system's cost.

The ITC applies towards solar systems installed after January 1, 2006, and under this program you can deduct from your taxes a percentage of the total cost of solar panels, equipment, labor and accessories. You can receive 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 depending on when the project was completed, your credit may range from 26-30%. There is no maximum claim amount.

Curious how the ITC might apply to your specific situation? Contact your local Montgomery solar panel installation expert to get more information.

The ITC was both renewed and expanded by the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. The Clean Energy Credit is valid until 2035. Any solar installation project that is completed between January 1, 2022, and December 31, 2032, may qualify for a 30% tax credit; the amount will be decreased slightly on a yearly basis until the end of the current program. Starting in 2023, the expansion to the program will also make it easier to get credit for energy storage systems.

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

State & Local Solar Incentives

Rebates, tax credits and more might be provided at multiple levels. Along with federal solar incentives, there are often state and local ones as well. Certain incentives are ongoing, while others are only available for a limited time. These incentives might be given by the Ohio government, or by your county or municipality.

Next Steps for Installing Solar in Montgomery

The nationwide use of solar energy has gone up significantly 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 Ohio government or the federal government. Your local Montgomery solar panel installation expert can provide you with more details about which incentives you can apply for, and get you started on the path to switching to renewable energy today.