Home & Real Estate

A Guide to Ohio Tax Exemptions for Solar Panels

Are you thinking of installing solar panels, but you’re wondering if it’s worth it because of the taxes on your property?

Before moving forward, ensure you are eligible for tax breaks and credits. In other words, you want to find out if investing in solar panels is more cost-effective and better than sticking to your old utility company.

So, if you are in the market for solar panels, keep reading to learn more about Ohio tax exemptions for solar panels and how to get your break.


Sales Tax Exemption

Depending on your location, you may be eligible for exemptions on the purchase of solar panels. To qualify for this exemption, the solar panel must be a “solar energy system,” You must complete the Ohio sales and use tax exemption form.

Once you’ve signed and reviewed the form, you’ll be exempt from paying sales tax on the equipment. This exemption also applies to bundled solar panel/inverter systems.

All necessary mounting materials, wiring, and other components are exempt from sales tax if they buy the solar panels. They must install and use the equipment to generate electric energy to receive the exemption.

All other uses are not eligible for the Ohio sales tax exemption. You may also see here for more information if you are considering installing solar in Ohio.

Property Tax Exemption

People who put solar panels on their homes can get a break from their property taxes. Homeowners can get a break on their property taxes through the energy-efficient home improvement tax credit. This is because the installation’s higher land restoration value is not taxed.

This means homeowners won’t have to pay more in property taxes because installing solar cells has made their homes worth more. Homeowners can take full advantage of this exemption if they contact their county auditor and get a certificate showing the qualification of their building for the exemption.
 To keep the exemption in place, you must update this certification every year or whenever the owner changes.

Net Metering

Net metering is a policy in Ohio law that lets people with solar panels or other green energy systems put the extra energy they make on their utility bill.

Ohio exempts net metering. This means that users who use solar power and other net metered energy sources will get a certain number of credits that they can use to balance out how much electricity they use.

You can save earned points and use them anytime during the year. Customers will pay less for electricity for a year because of this scheme.

Reducing taxes on solar energy systems through “net metering” is essential to the larger effort to get more people to use green energy sources. Opportunities.

Local Tax Credit

Residents of Ohio who put up solar panels can enjoy the local tax credit. With this refund, any system put in place in Ohio gets a provincial tax cut.

In some places, you may also get extra tax credits. Let’s say that a system can also get these other points. In that case, they add the points to the price of the solar panel system when you buy, or you can use them to get a refund. Installing solar panels doesn’t cost sales tax in Ohio, which can save you even more money.

Ohioans who want to go solar should look into their local tax credit options and take advantage of the many available tax breaks.

Federal Tax Credit

The Federal Tax Credit is an excellent reason for people in Ohio to switch to solar energy. Installing solar panels can lower taxpayers’ electric costs and create clean energy at the same time.

Most of the time, the Federal Tax Credit pays for up to 26% of the solar panel installation cost. Also, to the Federal Tax Credit, Ohio residents who buy solar panels can take advantage of a few other tax breaks.

For example, there is no personal income tax on all new solar equipment. This tax break pushes Ohioans to invest in renewable energy and reduce the damage electricity production does to the environment.

Ohioans can move to solar power and save money on their electric bills by taking advantage of all these incentives.

Commercial Activity Tax Exemption

The Ohio Commercial Activity Tax (CAT) Exemption is for businesses that sell solar panels or build solar panel systems for homes or businesses. The exemption covers buying parts, materials, and labor, and they need services to set up and run solar panel systems.

Businesses can get a CAT exemption certificate that must be turned in with their tax return when the buy was made. The exemption applies to the top-level solar installation and any expenses that help keep the system and services running.

This includes batteries, generators, and methods for monitoring things. This is a great way to get businesses to invest in Ohio’s future with clean energy.

Energy Efficiency Loan Program

Ohio’s Energy Efficiency Loan Program (EELP) helps homes pay for energy-efficient improvements like solar photovoltaic panels, solar water-heating systems, geothermal heating and cooling systems, and ground-source heat pumps. The EELP also gives people big breaks on their taxes.

When buying an eligible renewable energy well, the EELP makes dealing with the sales tax easier. Homeowners can get a tax break of up to 50 percent on their state income tax if they buy suitable green energy systems.

Residential Clean Energy Credit

Ohio residents can use clean energy tax credits to lower the cost of purchasing and installing solar panels. The Residential Clean Energy Credit exempts solar panels from sales tax. It may provide a tax credit of up to 25% of the installation cost.

To qualify for the credit, you must buy and install the system from January 2022 to 2032. It must be within state-defined limits, which they adjust based on the year of installation. The residence must be primarily used as an owner-occupied residence.

Taxpayers must apply with the Ohio Department of Taxation to claim the credit. Residents should be aware of the rules required to qualify for the credit to ensure they reap the full benefits of the exemptions.

Take Advantage of These Ohio Tax Exemptions

Take advantage of Ohio tax exemptions for solar panels! Whether you want to save on tax costs or power your home with renewable energy, Ohio’s solar panel exemptions can provide a great way to invest in your future.

Contact your local county auditor today to learn more about Ohio’s solar tax exemptions and how to take advantage of them.

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