Solar Incentives in Ohio – What Every Homeowner Needs to Know


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There’s never been a better time to go green and install solar panels at your home. Nationwide, the cost of solar panels has been decreasing dramatically over the last decade, and night might be your last chance to get some really good tax breaks on your new solar system.

Even in the Midwest, investing in solar power makes sense for many homeowners. You don’t need to be in the desert with daily sunshine to reap the rewards.

Ohio solar incentives make it very attractive to those in the Buckeye State. It might even have the best solar program across the Midwest.

So what are the Ohio solar power incentives that will have you pulling out your wallet today? Keep reading below to find out now.

Solar Incentives in Ohio - What Every Homeowner Needs to Know

Surprisingly, Ohio Is a Great State for Solar

First off, you might be wondering if Ohio even gets enough sunlight to make the investment worthwhile. No Midwestern state has ample amounts of sunshine. It certainly can’t compare to California or the Southwest.

But certain parts of Ohio get a fair amount of sunshine which makes solar worth it, especially as electricity costs rise over time.

When it comes to the sunniest cities in the US, Dayton is ranked 139, Toledo is 143, Columbus is 149, and Cleveland is 154. There are certainly cloudier places around the country.

Granted, these cities are much sunnier than the rest of the state. If you live far away from any of these areas, you’ll still benefit from solar panels. But with lower efficiency, it will just take a little longer for your savings to pay back your initial investment.

Ohio also has some stellar solar installers in the state. Blue Raven Solar is one of the top installers in the country, and conveniently has an office located in Cincinnati. Take any price quotes you’ve already received and compare with Blue Raven to see if you can snag yourself a deal today.

Federal Investment Tax Credit

So what about the official incentives that make Ohio such a sweet spot for solar installation?

Their biggest and best benefit of installing solar panels is the Federal Investment Tax Credit (FITC). This is not exclusive to Ohio. It’s available nationwide, as it’s a federal program.
But it’s the biggest incentive. In 2022, the FITC is providing a 26% tax credit on complete solar installations. That includes the price of material and installation.

If the average price in your area to install solar is $15,000, then you’d save $3,900. And yes, it’s a tax credit, which is a dollar-for-dollar credit on your next tax return. That means money directly into your pocket.

If you want until 2023 to install your solar panels, however, the credit drops to 22%. At the moment, the credit is set to phase out by 2024. However, the credit has been extended numerous times in the past.

There’s a chance it can be extended again in the future, but there are no guarantees. If you want to save the most amount money, get your solar panels before 2023 comes to a close. Or ideally, before 2022 comes to a close.

Net Metering in Ohio

Another big benefit of going solar is the process of net metering. This is an alternative to installing a solar battery.

Solar batteries are expensive and aren’t as efficient as you might think they are, so most homeowners skip the batter and use net metering.

When solar panels convert sunlight into electricity, the power needs to be consumed right away. Without a battery in place, you can’t store the electricity for later.

At times when your panels are generating more power than can be used at that particular moment, you can send that electricity back to your local utility provider. When you do, they pay for your power in credits. You are essentially selling excess electricity to the power company.

Then, during periods when your panels aren’t producing enough power, such as a cloudy day, or zero power, such as nighttime, your home will draw power from your utility provider, just like you used to do.

But instead of racking up an electricity bill, you use up any credits you’ve accumulated. It’s a seamless transaction that essentially allows you to generate excess power when the suns out, but use that power later on.

If you have any credit left over at the end of the year, the power company will send you a check and call it even. Who says solar panels are just for saving money?

Solar Renewable Energy Certificates (SRECs)

Solar Renewable Energy Certificates (SRECs) are another program unique to Ohio. They are certificates that are produced every time a solar power generation system generates a megawatt-hour (MWh).

These certificates are sold to companies or the government that need to invest in renewable energy.

Across the US, states are looking to reduce their overall carbon footprint by limiting emissions of greenhouse gases, particularly from coal-fired power plants.

Ohio’s goal is to reduce overall emissions by 36% by 2030. Part of this plan is to ensure a percentage of the state’s electricity is generated by solar panels.

The state government holds utility providers accountable. These utility providers will purchase the SRECs from Ohio residents who are generating electricity. This proves that a certain amount of solar power is generated in the state.

As a solar-powered homeowner, you get to sell your certificates for cash. The certificates themselves only sell for about $10. A standard solar panel system in Ohio might generate about 10 of these per month, netting you around $80 per year.

It’s not much. What’s more fulfilling is that you and your home are part of the climate solution, rather than the problem. You are helping the great state of Ohio to meet its needs and to be a national leader in solar production.

State-Sponsored Interest Rate Reductions

Most homeowners finance their solar panels. Even though they are more affordable than ever before, they will still have an out-of-pocket cost of over $10K.

So you’ll need to take out a loan, either from a local bank or from the solar installer.

The ECO-Link program in Ohio has set out to make renewable energy more accessible to homeowners. It does this by helping you get a discount on your interest, up to 3%, over the course of seven years.

This can save hundreds of dollars, if not more, over the life of your loan. And the loan isn’t limited to solar power, either. It’s all about energy efficiency.

So you can take out a loan for more than your solar panels are worth. You can use the excess funds to make other energy-efficient upgrades to your homes, such as new appliances, new windows and doors, better insulation, a new HVAC system, and other home upgrades.

As long as at least 50% of the loan is going energy-efficient upgrades, you can qualify for the interest rate deduction.

You’ll need to be an Ohio resident and naturally qualify for a loan through a standard lender. You’ll need to fill out an ECO-Link application and work with them over the course of your home improvements.

Tax Exemptions

In the state of Ohio, as well as many other states, your solar panel purchase and installation won’t be subject to the standard sales tax. That can save you a few hundred dollars as well since the current sales tax rate is 5.75%.

On the average $15K solar installation cost, sales tax would otherwise cost another $860.

Along with the sales tax exemption, your solar system won’t increase your property taxes. Normally, home upgrades that increase the value of your home result in paying higher property taxes. But the state government wants solar energy to be affordable both upfront and on an ongoing basis.

So if your property value increases, you won’t pay additional property taxes.

Is Solar Right for Your Ohio Home?

Even with all of the solar incentives listed above, it’s still a notable investment. But it’s one that will pay itself back eventually. Some experts estimate that an Ohio home will take about nine years to make back the initial investment.

After that, it’s free electricity and serious savings. If you’re in your forever home, then going solar is one of the best things you can do. With an unstable economy, giving your home the gift of independence can go a long way.

Plus, you’ll always have power, as long as the sun continues to rise. In the event of a storm, your neighborhood might experience a power outage. But since you generate your own power, you can keep going about your day like normal.

Your neighbors may figure this out though and will come over trying to use your appliances to cook. All of a sudden, your solar panels don’t only benefit you.

Take Advantage of These Ohio Solar Incentives

Solar panels are amazing inventions. And we’ll start to see positive environmental impacts once the majority of homes and businesses in America are using these panels.

With these Ohio solar incentives, you can start reaping these rewards today. You can be a leader in your neighborhood and invest in solar energy today.

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