New Year’s Resolutions

As you start taking down the Christmas ornaments and start thinking about New Year’s resolutions, you may consider some of the following resolutions:

• I will eat healthier this year
• I will take time and live life slowly
• I will start saving money and paying off debt

If you identify with the third New Year’s resolution, you’re not alone. According to the Motley Fool, a financial and investing company, 66% of Americans are making a New Year’s resolution related to their finances. These resolutions involve saving for big purchases or paying off debt. With nasty weather behind us and rising energy costs still ahead, you might consider installing solar panels on your home; after all, you’ve read that installing solar panels can help save you money and increase your home value. However, you may be concerned about the cost of solar panels and how you’ll pay for them. In this article, we’ll talk about the federal solar tax credit, Ohio tax exemptions, and how net metering can literally put money in your pocket.

2023 Federal Solar Tax Credit

Surprisingly, the federal government has had the solar tax credit on the books since 2006. Just last year, Congress passed an extension for the solar tax credit; between 2022-2032, when you install solar panels on your home, you qualify for a 30% tax credit on your federal income tax. For example, suppose it costs $13,000 to install your solar panels (including labor costs, batteries, and other equipment). In that case, you qualify for a $3,900 tax credit toward your income tax. The only caveat is if you do not owe anything, you do not get the tax credit. However, if you owe less than what the tax credit covers (for example, you only owe $1,000), the remaining credit will roll over to the following year. While Ohio does not have a state tax credit, state and local benefits can help save you money when investing in solar panels.

Although Ohio does not have a state tax credit for installing solar panels, the state does offer some incentives. The most prominent benefit offered in Ohio for solar panels is the sales tax exemption on solar equipment. To take advantage of this exemption, all you have to do is order your solar panels! Luckily, solar panels are not the only item exempt from sales tax. In addition to being exempt from sales tax on your panels, you are also exempt from paying sales tax on:

• inverters
• solar batteries
• electric vehicle chargers

For a system between $10,000 and $15,000, you could save between $575 and $863 on sales taxes. In addition to these savings, you could qualify for additional tax exemptions depending on where you live in Ohio.

Since adding solar panels to your home increases your home value, it also increases your property taxes. However, if you live in Cincinnati and Cleveland, you qualify for a property tax exemption. This tax exemption means that the city will exclude the added value the solar panels have added to your home for tax reasons. You save money by paying less for your utility bill and not paying more in property tax!

Ohio Net Metering

One of the best benefits of investing in solar panels is the opportunity to have the utility company pay you! After your solar panels have been generating power for your home for a few months, you’ll notice that your power bill has started going down. Ohio utility companies participate in what is called net metering. With this program, the utility company will begin applying credits toward your power bill for the electricity you put back into the grid. If you allow your home to generate power long enough, your power bill from the utility company could be zero. If you provide a surplus of energy by the end of the year, you can request the utility company to send you a check for your credits!

Free Solar Panel Home Analysis

If you’re considering solar and aren’t sure if your home will be a good fit, take advantage of our free, no-obligation solar analysis. Using advanced 3D imaging software, we design a rendering of your home to scale, replicating surrounding shade, roof pitch, and exact electricity usage. All we need is a copy of your most recent power bill. After you request a free analysis from our team, we can have your design ready in less than 24 hours.