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

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

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

The term "solar incentives" refers to a range of financial incentives designed to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. Incentives could include things like discounts, cash back or credit towards your monthly utility bill. Some incentives are offered federally, while others are handled by the state of Ohio or your utility company, county or municipality. Some solar incentives you might qualify for are:

• Tax Credits: Different from tax deductions, tax credits reduce, dollar-for-dollar, the amount of income tax that you owe the federal government.
• Net Metering: Net metering becomes relevant after your solar system is up and running. If you have in place a net metering agreement with your North Madison utility company, the company will subtract the value of the excess energy produced by your solar system from your utility bill each month. In some locations, this is a dollar-for-dollar credit, while in others you may receive a refund equivalent to a percentage of the value.
• Solar Renewable Energy Certificate (SREC): Generally, solar systems that produce over a threshold (usually small) amount of electricity qualify for SRECs or other performance-based incentives. SRECs and performance-based incentives in general are typically provided by your state government. When you receive an SREC, you can sell it to your utility company or another buyer, and generally the money you make is normally considered part of your taxable income.
• Tax Exemptions: Tax exemptions may come in one of two forms. The first is sales tax exemption, which is applied at the time you purchase your solar panels. The second is property tax exemption, which allows you to exclude the added value of your solar system when paying property tax on your home.
• Rebates: A solar rebate is a partial refund given after you've purchased your solar system. Rebates could be offered by your local utility company, your county or your state. The cash back that you get from the rebates is normally applied before tax credits are calculated.

Federal Solar Incentives

Federal incentives are the type of incentives that you are most likely to have some familiarity with. A federal incentive that most people are likely familiar with is the Federal Solar Investment Tax Credit (ITC). The ITC is a tax credit for a specific percentage of your solar system's cost.

The ITC was originally for 30% of the cost of solar panel installation, although it has fluctuated slightly over the years between 26-30%. The installation date of your solar system will determine what percentage you qualify for. The cost of installation includes the panels themselves as well as the cost of equipment, accessories and labor. There is no maximum amount you can claim. The ITC applies to solar systems installed after January 1, 2006 on your primary or secondary residence. The residence must be owned by you and in the United States.

Wondering how the ITC applies to your specific situation? Contact your local North Madison solar panel installer to get more information.

In August 2022, the ITC (now titled the Clean Energy Credit) was expanded and extended by the passage of the Inflation Reduction Act. Homeowners are now eligible for a credit equal to 30% of the total costs of solar system installation for projects that began after January 1, 2022 and will be finished by the end of 2032. The percentage will then decrease annually until the Clean Energy Credit expires in 2035. Beginning in 2023, it will also be easier to obtain credits for energy storage systems under this new program.

More information about the new Inflation Reduction Act can be found here. Your local North Madison 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 offered at the local or state level. Like with federal incentives, these may include tax credits, rebates and more. These incentives — which may be given by the state of Ohio, or by your county or municipality — might be offered on an ongoing basis, or for only a limited time.

Next Steps for Installing Solar in North Madison

There are many types of solar incentives: those given by local utility companies, those given by the federal government and those given by the Ohio government, to name a few. Solar energy use has increased tremendously in the last 15 years, partially due to these incentives. We suggest talking to your local North Madison solar installer to learn more about these incentives and to make sure that you're getting the most money possible for your solar system.