Ohio solar incentives, tax credits and rebates

Financial resources for Ohioans in 2024

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big house with solar panels on roof

There’s no way around it: Installing solar panels is expensive. On the bright side, Ohio residents can take advantage of federal tax breaks, loan programs and renewable energy credits. Here’s everything you need to know about how state and federal solar incentives can make installing panels more affordable.

Key insights

In Ohio, a typical residential solar panel system costs $9,461 to $27,031, depending on the size of your system and what financial incentives you qualify for.

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The 30% federal solar investment tax credit (ITC) is the most significant solar incentive for most homeowners in Ohio.

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Leasing or entering a power purchase agreement (PPA) is often cheaper upfront, but you won’t be eligible for the federal solar tax credit and other financial incentives.

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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 $13,515 to $27,031. 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.

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Can I get solar panels for free in Ohio?

There are no programs for free solar panels in Ohio. You can lease solar equipment or enter a power purchase agreement (PPA) with little to no upfront costs. Neither is free, however. Solar leases generally require a flat monthly fee; PPAs make you pay per unit of electricity.

» FREE SOLAR PANELS: Are they really free?

Is my HOA allowed to restrict solar panels?

Homeowners associations may restrict solar panels to an extent. According to Senate Bill 61, which went into effect in 2022, HOAs “may establish reasonable restrictions concerning the size, place and manner of placement of solar energy collection devices.”

How can I pay for solar panels?

You can pay cash, but most people finance solar panels with a solar loan. It works a lot like any other type of loan — there’s an application and approval process, and you pay it back over time (with interest). You also have the option of getting a lease or power purchase agreement.

» SOLAR PANELS: Lease vs. buy

How much can I save with solar panels in Ohio?

On average, Ohio homeowners with solar panels avoid $52,568 in utility costs over 25 years. Your current electric bill is the starting point for assessing the financial benefits of transitioning to solar energy. Knowing your average energy consumption helps determine the size and capacity of the solar system you need. Once you know this, you can figure out potential savings and how long it should take for your solar installation to pay for itself.

How do I know if my house is a good candidate for solar?

It’s best to have plenty of unshaded roof space that faces south or west for optimal sun exposure. It’s also smart to upgrade any old, inefficient appliances first. Reducing your electrical loads now means you can get a smaller system, which will be cheaper.

The condition of your roof matters too — if it needs replacement soon, do that before installing solar panels. Installing solar panels on an old roof might mean you have to remove the panels, replace your roof and then reinstall the panels. This will cost around $5,000 for a 19-panel setup.

Solar photovoltaic (PV) technologies, more commonly known as solar panels, absorb sunlight and convert it into usable electricity. If you have a lot of shading around your house, they might not get enough sun to power your home.

What has Ohio’s investment in solar been so far?

Total solar investments in the state amount to $3.1 billion, according to the Solar Energy Industries Association.

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

*For 100% usage offset; **Over 25 years

Article sources

ConsumerAffairs writers primarily rely on government data, industry experts and original research from other reputable publications to inform their work. Specific sources for this article include:

  1. DSIRE, “Ohio Programs.” Accessed March 29, 2024.
  2. EnergySage, “The cost of solar panels in Ohio.” Accessed March 29, 2024.
  3. Solar Energy Industries Association, “Ohio Solar.” Accessed March 29, 2024.
  4. SolarReviews, “How much do solar panels cost in Ohio?” Accessed March 29, 2024.
  5. CincinnatiCityWide.com, “Community Reinvestment Area (CRA): Residential Tax Abatement (RTA).” Accessed March 29, 2024.
  6. DSIRE, “Net Metering in Ohio.” Accessed March 29, 2024.
  7. The Ohio Legislature, “Senate Bill 61.” Accessed March 29, 2024.
  8. Environmental Protection Agency, “Summary of Inflation Reduction Act provisions related to renewable energy.” Accessed March 29, 2024.
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