Residential solar incentives in Ohio

The federal solar investment tax credit (ITC) is the best way to save money when going solar in Ohio. It reduces your federal tax liability by 30% of how much it costs to install solar panels. This is different from a deduction, which lowers your taxable income. ITC is a credit, meaning it directly decreases the amount of taxes you owe.

The ITC drops to 26% in 2033 and 22% in 2034.

For example, if you spend $10,000 installing a solar panel system, the ITC is worth $3,000. If in the year your system becomes operational you owe $15,000 in taxes, the ITC reduces what you owe to $12,000.

Tax credits offset your tax liability, so it’s only useful if you owe federal income taxes in the first place. However, the credit rolls over to the next tax year if you don’t use the full amount. You don’t get these benefits automatically, though. You must claim your solar equipment, labor and permits on your federal taxes for the same year you started using your system on Form 5695.

More residential solar incentives in Ohio

Ohio has relatively few statewide solar incentives. However, local governments can set up special energy improvement districts. Property owners in those areas can get funding to install solar panels or other similar energy systems on their land. The exact terms and details can vary depending on the specific locality.

• Cincinnati property tax abatement: If you've got a home or building in Cincinnati that's built or renovated to meet the LEED energy efficiency standards, you can get a property tax break. For new buildings, you can get a 100% tax abatement for 15 years. For renovations, it's 10 years. The exact amount you save depends on how high your LEED rating is.
• ECO-Link Program: Energy Conservation for Ohioans offers loans to make your home more energy-efficient. The interest rate on these loans is 3% less than usual. You just have to go through one of the participating banks to get the deal.
• Hamilton County Home Improvement Program: If you live in Hamilton County, you can get a loan from certain banks to fix up or upgrade your home or rental property. The interest rate is 3% below normal. The banks involved are Fifth Third Bank, U.S. Bank, KeyBank, North Side Bank and Trust Company and First Safety Bank. These are usually set up like home equity loans, with a second mortgage on your place. For single-family homes and duplexes, the house can't be worth more than $350,000. There's no price limit for multi-family buildings.

Additional solar incentives

Check DSIRE for the most comprehensive source of information about solar incentives and policies.

What to know about net metering in Ohio

Net metering lets homeowners with solar panels sell any excess electricity they generate to their local power grid. In Ohio, you can get in on net metering as long as your setup meets a few requirements.

Your system has to use approved renewable resources like solar, mainly to offset your electricity use. It's got to be on your own property and connected to the power grid. Customers of competitive retail electric providers can sign up for net metering if they've got an interconnection agreement with their utility. Rural co-ops and municipal utilities in Ohio can offer net metering if they want to, but they can do so without having to. Just reach out to your local utility to apply.

Solar renewable energy certificates

Another way to make money off your excess power in Ohio (that’s somewhat like net metering) is to collect solar renewable energy certificates (SRECs). Utility companies have to buy those credits to meet the state's rules on using renewable energy. For every megawatt-hour your system generates, you'll get paid $9.

This program is set to expire on Jan. 1, 2028. You can apply for SRECs on the Ohio Public Utilities Commission website.

» GREENEST STATES: Ohio ranked No. 29  in 2024

How much are solar panels in Ohio?

Before considering the federal solar tax credit, solar panel costs in Ohio typically range from $13,300 to $26,600. Your system size greatly affects how much you pay overall. The typical system size for solar systems in Ohio is 10.95 kW (kilowatts).

How do you know if the average size system is enough for your home or if you need a bigger one? Check the amount of electricity you used last year in kilowatt-hours (kWh). You’ll find this information in your electric account dashboard online. Then, divide your annual kWh by 1,200 to find the system size you need. For example, if your home used 15,000 kWh last year, you would need a 13-kW system.

Average solar cost by system size in Ohio

Find solar companies in Ohio

A good solar company helps you navigate local incentives, permitting and net metering policies. Compare our choices for the Ohio’s top solar companies to learn more.

Bottom line

The ConsumerAffairs Research Team conducted an in-depth analysis to determine the average costs of going solar. Turns out, it’s worth it for many homeowners, particularly in Ohio. In fact, it is one of the best states for going solar.

Solar costs: Ohio vs. nearby states