Ohio’s Key Solar Incentives: A Breakdown

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As the demand for clean and renewable energy continues to surge, Ohio stands at the forefront with an array of solar incentives designed to promote sustainable development. For residents and businesses looking to harness the power of the sun, understanding these incentives is crucial to making informed decisions and maximizing the benefits of solar energy.

Residential Clean Energy Credit

The Residential Clean Energy Credit, formerly known as the federal investment tax credit (ITC), offers a 30% reduction in the cost of your solar panel system. This incentive covers the entire system, including equipment, labor, permitting, and sales tax. To claim this credit on your federal income taxes, you must purchase the system with cash or a solar loan—leasing the system makes you ineligible for the ITC.

Additionally, you must have a sufficiently high tax liability, though any unused credit can be carried over from year to year until the ITC expires at the end of 2034. The only exception is for tax-exempt entities, such as nonprofit organizations, which may be eligible for a direct payment instead of a tax credit.

Ohio Property-Assessed Clean Energy (PACE) Financing

The Ohio PACE program coordinates with local governments and connects property owners with private PCAE-approved capital providers and contractors. The program offers fixed-rate PACE loans with net terms of 15 to 25 years. Through this program, commercial and residential property owners can receive 100% of the cost of an energy program upfront.

City of Cleveland’s Residential Tax Abatement

The City of Cleveland provides a tax abatement program for projects adhering to the city’s green building criteria, whether they involve improvements to existing structures or new constructions. Under this initiative, property taxes on the value of enhancements to an existing property or the construction of a new property are waived for a period of 15 years.

By participating in this program, homeowners installing solar panels can avoid additional property taxes attributable to the value of their solar panels for 15 years. This applies to both new constructions and renovations of single- or two-family homes.

Cincinnati Property Tax Exemption

Cincinnati homeowners have the opportunity to apply for a tax abatement program via the city’s website, which safeguards against property tax hikes following home improvement projects. Through this initiative, the installation of solar panels can enhance your home’s value without triggering an increase in property taxes for a duration of up to 15 years. To be eligible, homes must meet LEED certification standards.

Net Metering 

Net Energy Metering (NEM) is a billing practice that credits owners of solar PV systems for the excess electricity their systems generate and feed back into the grid.

When solar panels produce more energy than a home consumes, the surplus energy is returned to the public grid, contributing to the supply of clean energy for others. System owners earn credits for this extra power, which can be used to offset future electricity bills if sufficient credits are accumulated.

Solar Renewable Energy Credits (SRECs)

SRECs (Solar Renewable Energy Credits) provide additional income from solar electricity generation. Homeowners earn one SREC for every megawatt-hour (MWh, or 1,000 kWh) of electricity their solar panel system produces. These credits can be sold for cash in the SREC market.

Qualified Energy Project Tax Exemption

Solar energy projects meeting specific criteria can benefit from a Solar Sales Tax Exemption in Ohio, where the average sales tax is 5.7%. This exemption applies to tangible personal property associated with certified “qualified energy projects” utilizing solar panels to generate electricity.

To qualify, projects must adhere to various conditions, such as timely application submissions, construction timelines, and obtaining necessary approvals. Once certified, the tangible personal and commercial property of these projects is exempt from taxation for specified tax years.

Solar for All

• The Community Power Coalition (CPC)’s SFA program, “Powering America Together,” will collaborate with and enhance the impact of the US Department of Energy’s National Community Solar Partnership and Community Power Accelerator program. Led by Inclusive Prosperity Capital, Inc., CPC comprises seasoned community solar experts who have contributed to the Community Power Accelerator as developers, lenders, trainers, and technical assistance providers. The program aims to support the development of low-income community solar projects, reduce carbon emissions, lower energy costs, and promote quality jobs, community wealth-building, energy resilience, and equitable workforce development. 
• The Ohio Solar for All (SFA) Program will strategically deploy solar-related upgrades using a variety of funding models administered by the Ohio Air Quality Development Authority and the Ohio Environmental Protection Agency. This initiative aims to provide opportunities for Ohio’s residential customers in low- to moderate-income households and disadvantaged communities, resulting in significant energy savings, alleviation of high energy burdens, and improvements in air quality and economic prosperity in historically underserved areas of Ohio. The program’s financial models will offer flexibility for Ohio families to access solar, regardless of whether they own or rent their homes, and can be utilized to attract private capital as part of its sustainable design and implementation. The state’s objectives include maximizing the reach of clean energy generation to underserved households, achieving maximum cost savings, and ensuring the longevity and sustainability of the SFA program for years to come.
• Based in Ohio, the Industrial Heartland Solar Coalition brings together 31 communities across eight states, spanning from the Midwest to the rustbelt. Led by Growth Opportunity Partners (Growth Opps), the coalition is committed to propelling a just and clean energy transition in America’s industrial heartland communities. Its Solar for All (SFA) program, centrally managed by Growth Opps, is locally guided and implemented by 18 coalition members. Through our SFA initiative, the coalition aims to deliver energy savings to households, reduce greenhouse gas emissions, and provide training through solar workforce development programs. By leveraging tax credits and SFA grant funds, our coalition seeks to reach low- and moderate-income households, installing residential rooftop solar and more.
• Teaming up with lead applicant GRID Alternatives, a coalition of ten mission-driven nonprofit solar and affordable housing providers and allies has collaborated to develop the Solar Access for Nationwide Affordable Housing Program (SANAH). SANAH is meticulously crafted to maximize benefits for households and communities while advancing equity, reducing harmful pollution, and combating climate change. The program offers a multitude of advantages, including expanded access to solar and storage for income-qualified households, significant energy savings and relief from burdensome costs, as well as additional benefits like efficiency improvements and electrification. 

Energy Conservation for Ohioans (ECO-Link) Program

The Energy Conservation for Ohioans (ECO-Link) Program offers reduced-interest loans for homeowners to make energy efficiency improvements. Administered by the Ohio Treasurer’s office, the program provides interest rate reductions on bank loans for eligible energy-efficient upgrades such as insulation, windows, HVAC systems, and solar panels. The goal is to promote energy conservation and reduce utility costs for Ohio residents. 

Hamilton County – Home Improvement Program

The Hamilton County Home Improvement Program offers low-interest loans to homeowners for home repairs and improvements, including energy efficiency upgrades. This program is designed to help residents maintain and enhance their properties, ensuring safe and comfortable living conditions. Loans can cover a wide range of projects, such as roof repairs, HVAC system upgrades, and insulation improvements. 

Ohio’s comprehensive suite of solar incentives makes it an attractive state for adopting solar energy. By taking advantage of these incentives, residents and businesses can not only contribute to a more sustainable future but also enjoy substantial economic benefits. As the landscape of renewable energy continues to evolve, staying informed about available incentives is key to maximizing the potential of solar power in the Buckeye State.

Disclaimer

The information provided herein is for informational purposes only and is accurate as of the time of publication. Please be aware that the solar energy landscape, including technology, regulations, incentives, and market conditions, changes frequently. Therefore, it is essential to consult with qualified experts and professionals before making any decisions regarding solar energy installations or investments. This will ensure that you receive the most current and applicable advice tailored to your specific circumstances.