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

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

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

The phrase "solar incentives" broadly refers to financial incentives implemented by the government and by solar companies to encourage increased use of renewable energy by making installing and using solar panels more affordable. Solar incentives might include upfront discounts, cash back or credit towards your monthly utility bill. Some incentives are given by the federal government, some by the state of Ohio and some by your specific utility company, county or municipality. You might qualify for any of the following types of solar incentives:

• Solar Renewable Energy Certificate (SREC): SRECs and similar performance-based incentives are typically handled by your state government. Once your solar system meets a certain threshold (generally a small amount of energy production), you are eligible to receive SRECs that can be sold to your utility company or other buyers. The money you receive is usually considered part of your taxable income.
• Net Metering: Net metering is an incentive you can get after your solar panels are up and running. If you have a net metering agreement with your Wadsworth utility company, it will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some locations, this is a dollar-for-dollar credit, while in other areas you might receive a refund equivalent to a percentage of the value.
• Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the government. (A tax credit is different from a tax deduction.)
• Rebates: A rebate is a partial refund given after you've purchased your solar system. Rebates might be offered by your local utility company, your state or your county. The rebates are usually applied before tax credits are calculated.
• Tax Exemptions: Your solar panels could qualify for both sales tax and property tax exemptions. Sales tax exemptions are effective at the time of purchase. Property tax exemptions let you exclude the added value of the solar panels when calculating property taxes on your house.

Federal Solar Incentives

Federal incentives are the kind of incentives that you are most likely to have heard of. You might have heard of the Federal Solar Investment Tax Credit, or ITC. This incentive is a tax credit equal to a certain percentage of the money you spend installing solar panels.

The ITC applies to a solar system installed on your primary or secondary residence in the United States. The solar panels have to have been installed on a property you own after January 1, 2006 for you to claim the credit. The ITC initially covered 30% of all costs (panels, labor, accessories and equipment), although this amount has fluctuated slightly over time between 26-30%. The amount you qualify for will depend on when your solar system was installed. There is no cap on the amount you can claim.

Your local Wadsworth solar panel installer can provide you with more information about the ITC and how it applies to your situation.

The Inflation Reduction Act, passed in August 2022, made some changes to the ITC (as well as retitling it the Clean Energy Credit). The Clean Energy Credit bolsters the current credit, increasing it up to 30% for solar installation projects started after January 1, 2022 and completed by the end of 2032. After this, the credit percentage will see a slight decrease annually until the end of the program in 2035. Starting in 2023, the program expansion 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 Wadsworth solar panel installer can answer any questions you have and explain how the new Clean Energy Credit applies to you.

State & Local Solar Incentives

There are more than just federal solar incentives; rebates, tax credits and more may be offered at the local or state level. Certain incentives are ongoing, while others are offered for only a limited time. Your local solar incentives may come from the Ohio government, or from your specific county or municipality.

Next Steps for Installing Solar in Wadsworth

Solar incentives might be provided by the Ohio government, the federal government or your local utility company. The variety of solar incentives available has helped nationwide use of solar energy increase greatly in the last 15 years. Your local Wadsworth 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.