2024 Ohio Solar Incentives, Tax Credits, Rebates, & Exemptions

Last updated: December2024

Ohio solar incentives can save homeowners $5,400 on average when they install solar panels in the Buckeye State. 

These incentive savings don’t include the monthly solar savings you can get on your electricity bills through Ohio’s net metering policy. We break down everything you need to know about how to save when you switch to solar power in Ohio.

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Overview of Ohio solar incentives and rebates

Incentive	Estimated average annual savings	Eligibility	About
Federal solar tax credit	$5,400	All tax-paying U.S. citizens	Tax credit equal to 30% of installation costs, applied to federal income taxes
Ohio sales tax exemption	$1,035, varies with value of system	Ohio residents	Ohio residents are 100% exempt from paying sales tax on solar purchases
Ohio property tax exemption	$108 - $234, varies with location, value of system and property	Residents of Cincinnati and Cleveland	Residents of Cincinnati or Cleveland are 100% exempt from raised property taxes from home improvement upgrades for 15 years.
Ohio Solar Renewable Energy Credits (SRECs)	$27, varies based on energy production	Ohio residents	Ohio’s SREC market allows homeowners to sell an SREC for every 1,000 kWh of solar generated

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Calculate how much you can save with Ohio incentives

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Federal solar tax credit

Ohioans who invest in solar energy for their homes can be eligible for the federal solar tax credit worth 30% of the total cost of their solar installation. 

The average solar system in Ohio will receive a tax credit worth $5,400. Remember that the investment tax credit (ITC) is not an upfront payment. The federal tax credit reduces your income tax liability, and you won’t see the benefits of the tax credit until you file your taxes for the year.

If your liability is less than the value of the federal solar investment tax credit, it will be reduced to $0, and the remaining credit value will be applied to next year’s taxes. The credit can roll over for five years without an income limit. 

Ohio sales tax exemption

Ohio is one of the many states where homeowners are exempt from paying sales tax when they purchase a solar panel system. The sales tax in Ohio is currently 5.75%.

If the average solar system in Ohio costs $18,000, the tax would tack on an extra $1,035! Thankfully, Ohio homeowners don’t have to worry about this additional cost.

Cleveland and Cincinnati property tax exemption

The cities of Cincinnati and Cleveland both offer a residential tax abatement program to residents to encourage property owners to invest more in upgrading their buildings. Although this is not a solar-specific program, it applies to home improvement projects that raise property value, including solar panel installations.

The property tax abatement only requires owners to pay taxes on the pre-improvement value of their property for 15 years. A study conducted by the experts at SolarReviews found that solar can raise property value by 6.8% on average. 

Based on both cities' median home and property tax values, the solar property tax exemption can save between $100 and $240 on property taxes.

Ohio Solar Renewable Energy Credits (SRECs)

The state of Ohio is one of the few that included a Solar Renewable Energy Credit (SREC) market in its renewable portfolio standard (RPS). One SREC is generated for every megawatt-hour (MWh) or 1,000 kilowatt-hours (kWh) of solar power that a solar energy system generates. 

Once an SREC is generated, customers partner with aggregators, who purchase and sell them to utilities. Think of SRECs like stock—they’re tradable, and their value fluctuates according to the supply and demand of the state’s market. In Ohio’s case, SRECs are currently valued at $3 on average. This means an average solar panel system in Ohio can earn $27 through SRECs annually, based on the current SREC value.

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Ohio net metering and solar buyback plans

Ohio offers a net metering program that credits customers for excess energy sent back to the grid—however, utilities credit customers at rates lower than the full retail rate. 

Electric providers in Ohio credit customers at the per-kWh generation charge rate. This is lower than the full retail electricity rate, meaning Ohio utilities will charge you about $0.17 per kWh you use from the grid but only credit you $0.11 for solar energy you send the the grid. 

Technically, this reduces your solar electricity bill savings, but you can still save quite a bit when you go solar, especially if you install the right number of solar panels for your energy needs. 

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Ohio installation costs 

The average 7 kW solar system in Ohio will cost about $18,000 upfront, or about $2.50 per watt. The installation cost is pretty cheap compared to the national average of $3.00! 

Although Ohio doesn’t offer any solar rebates, applying the solar investment tax credit will bring the total cost to around $12,600 – not including the savings customers see on their monthly energy bills.

Federal tax credit: $18,000 x 30% = $5,400

Total savings: $5,400

Effective system cost: $18,000 - $5,400 = $12,600

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Do incentives and rebates make solar panels worth it in Ohio?

While we would love to see Ohio offer some solar rebates to lower the upfront cost of solar energy, the combination of Ohio’s low installation costs and the federal tax credit makes solar worthwhile. Through bill savings, the averagepayback period for solarenergy in Ohio is about 11 years, which is great and provides 14 or more years of free electricity. 

Every home and financial situation is unique. The best way to determine if solar is right for you is to talk to local solar companies. We recommend getting at least three quotes from reputable solar installers to maximize your savings and get the best deal. 

SolarReviews can connect you with pre-vetted solar installers in Ohio, or you can research our expansive directory of solar companies in Ohioto find who you like best.

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Calculate how much you can save with Ohio incentives

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Ohio solar incentives: FAQs