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

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

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

The phrase "solar incentives" broadly refers to financial incentives designed to encourage the adoption and use renewable energy by making solar panels more affordable. These incentives can include upfront discounts, cash back or monthly credits towards your utility bill. Some incentives are offered by the federal government, some by the Ohio government and some by your specific utility company, county or municipality. Types of solar incentives might include:

• Net Metering: Net metering becomes relevant after your solar panels are up and running. If you've signed a net metering agreement with your Shaker Heights utility company, the company 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 others you might receive a refund equivalent to 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 is generally considered part of your taxable income. Generally, there is a small threshold of energy production to meet before your solar system qualifies for SRECs or other performance-based incentives. Incentives like these are generally handled at the state level.
• Rebates: Some solar companies will help you claim a rebate, or partial refund of your purchase, for your solar panels. Counties or states will also offer limited-time rebates at various times. Any rebates you receive will usually come off your total price before any tax credits are calculated.
• Tax Exemptions: Tax exemptions can 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. This allows you to ignore the value added by your solar system when calculating property tax for your house.
• Tax Credits: Tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the federal government. (This is different from a tax deduction.)

Federal Solar Incentives

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

The ITC is applied to the total cost of installing a solar system, including the panels themselves as well as labor, equipment and accessories. This credit can be claimed for panels installed after January 1, 2006 on a primary or secondary residence that you own, as long as it is located in the United States. The tax credit ranges from 26-30% of total costs depending on when your project was completed. There is no maximum claim amount.

Curious how the ITC might apply to your specific situation? Contact your local Shaker Heights solar panel installer to get more information.

In August 2022, the ITC (now titled the Clean Energy Credit) was bolstered by the passing of the Inflation Reduction Act. Homeowners can now qualify for a credit of 30% of the total solar system installation costs for projects started after January 1, 2022 and completed before the end of 2032. The percentage will then decrease annually until the Clean Energy Credit expires in 2035. The program expansion also makes it easier to get credit for energy storage systems, beginning in 2023.

More information about the new Inflation Reduction Act can be found here. Your local Shaker Heights solar panel installation experts can answer your questions and explain how the new Clean Energy Credit applies to you.

State & Local Solar Incentives

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

Next Steps for Installing Solar in Shaker Heights

Nationwide solar energy use has gone up significantly in the last 15 years, in part due to the proliferation of solar incentives. You can obtain these incentives from your local utility company, the Ohio government or the federal government. We recommend talking to your local Shaker Heights solar installation company for more information about these incentives and to ensure that you're getting the most money possible for your solar system.