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

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

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

The phrase "solar incentives" refers broadly to financial incentives that are in place to encourage increased use of renewable energy by making the installation and use of solar panels more affordable. These incentives might include upfront discounts, cash back or credit towards your monthly utility bill. Some incentives are handled by the federal government, some by the state of Ohio and some by your specific utility company, county or municipality. Some broad categories of solar incentives include:

• Tax Exemptions: Your solar panel system might 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 value that solar panels add when calculating property taxes on your house.
• Tax Credits: Tax credits lower, dollar-for-dollar, the total amount of tax you owe the government. Tax credits are different from tax deductions.
• 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, you must meet a certain (small) threshold of energy production before your solar system is eligible for SRECs or similar performance-based incentives. SRECs and similar incentives are typically handled at the state level.
• Rebates: Solar rebates may be offered by your local utility company, or by your county or state. These rebates work as cash back that is applied after you purchase solar panels and before tax credits are calculated.
• Net Metering: Net metering becomes relevant after your solar system is up and running. If you've signed a net metering agreement with your Scioto utility company, the company will subtract the value of the excess energy your solar system produces from your monthly utility bill. In some places, this is a dollar-for-dollar credit, while in others you may receive a refund equivalent to a percentage of the value.

Federal Solar Incentives

When you hear the term "solar incentives," federal incentives might be the first thing that comes to mind. A federal incentive many people are probably familiar with is the Federal Solar Investment Tax Credit (ITC). This incentive is a tax credit for a specific percentage of the cost of your solar system.

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

Your local Scioto solar panel installation expert can give you more information about the ITC and how it applies to your situation.

The ITC has been renewed and expanded following the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. The Clean Energy Credit lasts until 2035. Your solar installation project undertaken between 2022 and 2032 may qualify for a 30% tax credit. The amount will then decrease slightly each year until the end of the current program. The program expansion also makes claiming credit for energy storage systems easier than ever before, starting in 2023.

More information about the new Inflation Reduction Act can be found here. To fully understand how the new Clean Energy Credit applies to you, speak with your local Scioto solar installers.

State & Local Solar Incentives

Some solar incentives are often also provided by state and local governments. As with federal incentives, these might include tax credits, rebates and more. These incentives might be offered by your county or municipality, or by the Ohio government. Some are ongoing, while others are available for a limited time.

Next Steps for Installing Solar in Scioto

The nationwide use of solar energy has significantly increased in the past 15 years, in part due to the growth in the number of solar incentives. You might receive these incentives from your local utility company, the Ohio government or the federal government. When you're ready to make the switch to solar energy, getting in touch with your local Scioto solar panel installation expert is a great first step.