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

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

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

Solar incentives are designed to make renewable energy usage more affordable via financial incentives to help people install solar panels on their homes. Incentives can include things like discounts, cash back or monthly utility bill credits. Some incentives are offered federally, while others are handled by the state of Ohio or by your specific utility company, county or municipality. Types of solar incentives might include:

• Tax Credits: Tax credits decrease, dollar-for-dollar, the amount of income tax you owe the federal government. Tax credits differ from tax deductions.
• Tax Exemptions: Your solar panel 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 allow you to exclude the added value of the solar panels when you are calculating property taxes on your home.
• Solar Renewable Energy Certificate (SREC): SRECs are credits that can be sold to your utility company (or other buyers) for money 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 similar performance-based incentives. Incentives like these are typically handled by your state government.
• 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 offer limited-time rebates at various times. The value of a rebate will usually be deducted from your total price before any tax credits are calculated.
• Net Metering: Don't forget to speak with your Salem utility company about signing a net metering agreement. This will allow you to get a credit towards your monthly utility bill for the value of excess energy your solar panels generate. You might receive either a dollar-for-dollar credit or a percentage of the value.

Federal Solar Incentives

Federal incentives are the kind of incentives that you are most likely to have some familiarity with. You've likely heard of the Federal Solar Investment Tax Credit, or ITC. This incentive is a tax credit equal to a specified percentage of the money you spend on your solar system.

The ITC applies towards solar systems installed after January 1, 2006, and lets you deduct from your taxes a percentage of the total cost of solar panels, equipment, labor and accessories. You can receive this credit for a solar panel system installed on a primary or secondary residence in the United States that you own. Originally, you could claim 30% of the total cost, although the amount you can claim may range between 26-30%. There is no maximum amount you can claim.

Your local Salem solar panel installation expert can provide more information about the ITC and how it may apply to your situation.

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 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; this amount will decrease slightly each year until the end of the current program. Starting in 2023, it will also be easier to claim credits for energy storage systems under the new laws.

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

State & Local Solar Incentives

Some solar incentives are often also offered at the local or state level. Similar to federal incentives, these could include tax credits, rebates and more. Certain incentives are ongoing, while others are only available for a limited time. These incentives may be given by your county or municipality, or by the Ohio government.

Next Steps for Installing Solar in Salem

There are a variety of solar incentives: those provided by local utility companies, those given by the federal government and those given by the Ohio government, to name a few. The use of solar energy has grown tremendously in the last 15 years, thanks to these incentives. Your local Salem solar panel installation expert can help you learn more about which incentives you should apply for, and get you feeling good about making the change to renewable energy today.