Ohio offers strong incentives for switching to solar power, from attractive state and federal tax credits to net-metering policies that can make your investment more affordable. Here’s what you need to know about going solar with one of the best solar companies in the Buckeye State.
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What Are the Available Solar Tax Credits and Rebates in Ohio?
Ohio offers a robust selection of solar incentives and tax exemptions for homeowners. We break down these benefits in detail below.
Energy Conservation for Ohioans (ECO-Link) Program
The Energy Conservation for Ohioans (ECO-Link) Program, from the Ohio Treasury, is an initiative designed to empower homeowners in Ohio with enhanced access to energy-efficient upgrades. Through partnerships between state agencies and financial institutions, ECO-Link offers reduced-rate financing to support installing various solar projects. This loan program covers solar panel installation and other energy-efficient home improvements, such as insulation and upgraded HVAC systems.
Loan terms and conditions, such as a program’s interest rate, vary for each homeowner. We recommend contacting the Ohio Treasurer’s Office for more information.
More resources:
Qualified Energy Project Tax Exemption
The Ohio Department of Development exempts solar panel owners from paying a personal property tax. Our research shows that solar panels increase property value by roughly $15,000. This increase is great for your home’s value but results in higher property taxes. However, this property tax exemption ensures you don’t have to deal with additional costs caused by installing a solar power system.
More resources: DSIRE page
What Is the Federal Solar Tax Credit?
The federal solar tax credit, also known as the investment tax credit (ITC), lets you claim 30% of your solar installation costs on your federal taxes. Eligible costs include equipment, labor, and necessary upgrades like electrical panels. This is a dollar-for-dollar reduction, meaning if your system costs $20,000, you could deduct $6,000 from your taxes.
You need to own the system to qualify, whether purchased outright or with a solar loan. Leasing or using a power purchase agreement (PPA) doesn’t qualify you since you don’t own the system. If your tax credit is worth more than what you owe, the balance can roll over to the next tax year.
Is Net Metering Available in Ohio?
Net metering allows residents with solar panels to generate their own electricity and sell excess energy back to the power grid. The surplus electricity goes to the utility grid when solar panels produce more energy than is consumed. The owner receives solar renewable energy credits (SRECs) for the excess energy. You can apply these credits to offset future electricity bills when the solar panels aren’t producing as much energy, such as at night or on cloudy days.
Net metering programs vary by utility company. We recommend contacting your local public utilities commission to learn more.
How Much Do Solar Panels Cost in Ohio?
The average national cost for a solar system is about $16,129. According to EnergySage, you’re looking at $13,035 for a 5-kilowatt system in Ohio. However, applying the federal solar tax credit can drop that price by nearly $4,000.
Here’s a breakdown of each solar financing option to help you decide how you want to purchase your system:
- Cash purchase: Buying a solar system outright maximizes your long-term savings, as you own the system. Plus, you’re eligible for all available incentives and tax credits.
- Solar loan: Solar loans can be obtained through third-party providers or occasionally through your solar installer. With a solar loan, you own the system and can claim any tax credits and incentives, but monthly payments and interest will reduce your immediate savings. Loans typically have fixed interest rates and monthly payments, which helps make solar costs more predictable.
- Solar lease: Solar leases allow you to “rent” a system for a fixed monthly fee. Though you don’t own the system, you benefit from lower energy bills. However, this option limits your eligibility for incentives and is more expensive in the long term.
- Power purchase agreement (PPA): With a PPA, you agree to pay a solar provider for the energy you use, typically at a lower rate than your utility. The solar company owns and maintains the system, so PPAs offer a great deal of savings upfront. However, you typically won’t save as much money as you would by purchasing or financing a system over the course of 20 years.
Which Solar Financing Option Is Most Common?
Of our 1,000 surveyed solar buyers, 64% paid in full upfront, 23% used a solar loan, 11% went with a solar lease, and 17% chose a power purchase agreement.
What Are the Most Popular Solar Incentives?
We surveyed 1,000 recent solar buyers in early 2024 and learned that 64% used the federal solar tax credit, 32% enrolled in a net metering program, and 30% took advantage of a local rebate program.
Is Going Solar in Ohio Worth It?
Going solar is worth it for Ohio residents. Solar panels can generate clean energy for decades. Ohio’s solar industry and incentives also allow homeowners to save money while reducing their carbon footprint. These savings can vary depending on factors such as the cost of electricity, available incentives, climate, and sun angle. However, solar panels are generally worth it for Ohio homeowners.
The Process of Going Solar in Ohio
Switching to solar power in Ohio is a smart choice if you want to reduce your carbon footprint and save on energy bills. Here’s a step-by-step guide to help you get started:
- Consultation: Start by consulting multiple Ohio-based solar companies. They’ll evaluate your home’s sunlight exposure, roof condition, and energy needs. Expect online assessments and in-person consultations to determine your property’s solar fit and how many solar panels you need. This stage usually takes a few days.
- Design: Your chosen installer will design a customized solar system tailored to your roof and energy consumption. You’ll receive options balancing cost and performance, including solar inverters and solar battery choices, if applicable. This stage typically takes one to two weeks.
- Permitting and approvals: Your installer will handle local zoning laws, homeowners association (HOA) guidelines, and utility company requirements. Ohio’s permitting process can take from a few weeks to a couple of months, depending on your location and utility provider.
- Installation: Once you have all the necessary permits and your solar panels have arrived, installation is next. This usually takes up to one day, depending on the complexity of your system. It typically happens within one to three months of your initial consultation.
- Final inspection: Your installer will conduct a final inspection to ensure everything is working correctly. They’ll walk you through monitoring your solar production and understanding your energy bills. You’ll also learn how net metering can help lower your energy costs and any required ongoing maintenance.
Our Conclusion
Ohio is a great state for going solar. It offers many solar rebates and incentives to make going solar more affordable. Our guide covers the most significant incentive programs, but smaller city- or municipality-specific incentives may be worth exploring. We recommend checking the Database of State Incentives for Renewables and Efficiency (DSIRE) for more information.
Use our tool below to connect with top solar installation companies. You should also read our guide on the best solar companies in Ohio to find a local installer that matches your needs and can help you obtain the incentives listed here.
FAQs About Solar Tax Incentives in Ohio
How can I get free solar panels in Ohio?
No program in the state of Ohio offers free solar panels. This selling point is a red flag if you encounter someone offering you “free” solar panels.
Can you sell electricity back to the grid in Ohio?
Yes, you can sell electricity back to the grid in Ohio through a net-metering program. Ohio’s net-metering policy allows homeowners with solar panels to sell the excess electricity they generate back to the grid.
Do you need a permit to install solar panels in Ohio?
A building and electrical permit is required to install solar panels in Ohio. The fee attached to these permits will vary according to your ZIP code. Call your local zoning department to inquire if a zoning permit is required and learn more about the required permits.
