Hey Jordan! If the upfront costs of transitioning to solar have held you back so far, I‘ve got great news. Between federal tax credits, state incentives, and attractive electricity rates, Ohioans who make the switch stand to pocket some serious savings. Let‘s dive into all the ways you can slash your price tag for going solar.
Solar Keeps Growing More Affordable Across Ohio
First, some good context on where things stand today. Ohio solar has exploded from just 50 megawatts (MW) of capacity in 2016 to over 1 gigawatt (GW) in 2022. That‘s 20X growth in only 6 years! A big driver of things has been legislation supporting renewable incentives and requiring utilities to phase in more clean energy.
Those sorts of policies in turn have sent solar-related jobs soaring by 69% over the past 4 years in Ohio. And as more qualified companies enter the market competing for business, average solar installation prices keep falling across the Buckeye State. I‘ll break down exactly what that means for return on your investment later on.
Federal Solar Tax Credits Cut Costs by Nearly One Third
Okay, let‘s dive into the juicy incentives slashing your upfront solar purchase costs. The big kahuna is the 26% federal Investment Tax Credit (ITC) in 2023, dropping from 30% last year. That essentially means Uncle Sam chips in to cover nearly one third of your total project expenditures on Day 1!
The table below summarizes how the ITC percentages translate to savings for different home solar setups:
| System Size | Gross Price | Federal Tax Credit Savings |
|---|---|---|
| 4 kilowatts | $10,500 | $2,730 |
| 6 kilowatts | $14,300 | $3,718 |
| 8 kilowatts | $18,400 | $4,784 |
*Prices and ITC based on average Ohio costs of $2.63/Watt
The credit applies to all equipment, labor, permits, and design fees for a rooftop array placed into service before the end of 2032. That‘s when phaseouts kick in annually before sunsetting fully in 2035. Act quick to capture the maximum support!
Oh and a solar tax specialist can help advise you on applying the ITC to reclaim thousands back from the IRS. More money in your pocket!
Net Metering: Your Utility Pays You for Extra Power
So your solar panels will likely produce more juice than you actually use each day. Especially during peak output hours in the spring and fall. Net metering ensures you get retail rate bill CREDITS for sending any surplus solar energy back to the grid.
Ohio stands out by requiring nearly all utility providers to offer net metering. Compare that to places like Alabama or Idaho imposing all kinds of restrictions. Your annual net metering payout depends on system size and household consumption, but I‘ve seen $200 to even $800+ checks from the utility here. Sweet bonus income stream on top of the radically lower power bills!
Renewable Energy Credits – Get Paid to Go Green
Ever heard of renewable energy credits (RECs)? Also called solar renewable energy certificates (SRECs) at the state level, they basically act as tracking instruments representing each megawatt-hour of solar power produced. As the system owner, YOU retain rights to those SRECs.
And in Ohio, utilities have mandates requiring them to buy SRECs annually to comply with clean energy standards. Current market prices float around $5 per credit – not a ton but solid gravy. Let‘s say your 6 kW array churns out 50 SRECs per year. At $5 each, that‘s an extra $250 of annual cash flow for doing nothing!
Breaking Down the Payback Math in Ohio
Now for the magic number prospective solar customers want to know – how many years until energy savings and incentives cover your initial investment? The current payback period for solar in Ohio clocks in around 11 years on average. Not blazing fast but not bad considering cheaper Midwestern electricity rates.
To hit that figure, let‘s run through the investment return math on a sample 6kW rooftop installation:
- Upfront System Price: $14,300
- Federal Tax Credit (26%): $3,718
- Projected Lifetime Utility Savings: $23,000+
- 10 Years of SREC Sales: $500
- Total 25 Year Benefit: $27,218
Based on those projections, you‘d effectively "profit" $13,000 over a quarter century from your original $14,300 solar purchase. And recapture the full investment in 11 years counting the incentives.
Not included there are additional rebates some Ohio utilities provide, plus savings from property tax exemptions that cities like Cleveland offer. Oh and I built an easy Solar Calculator you can tweak for your home‘s specifics!
Weighing Whether to Buy vs. Lease Solar Panels
Some Buckeye State residents choose to lease rather than buy their solar array to mitigate upfront expenses. Make no mistake – the upside is higher owning the system when accounting for tax credits, net metering income, SRECs and market electricity cost offsets.
But leasing does provide more flexibility if moving in less than 10 years. See the comparison below to inform your solar decision making:
| Decision Factor | Solar Purchase | Solar Lease |
|---|---|---|
| Upfront Cost | $14,300 | $0 |
| Federal Tax Credit | $3,718 | $0 |
| Year 6 Net Savings | $7,850 | $3,600 |
| Year 10 Net Savings | $12,150 | $7,200 |
| 25 Year Lifetime Value | $27,218 | $15,000 |
Leasing may work better aligning with short-term budgets. But buying maximizes your total solar incentives and utility savings over the long haul.
Either route lightens your environmental impact! I advise modeling out both options fully to see which solar strategy works best for your situation.
Key Takeaways: Ohio Makes Solar a Smart Choice
In closing Jordan, I hope this summary gives you confidence in the stellar payback potential for household solar in our state. Fair electricity rates, strong net metering, and growing financial incentives combine to make going renewable a wise investment. Expect break-even in a decade or less while protecting against utility rate volatility.
And who knows, you might even come out thousands ahead over the 30+ year lifespan of a rooftop system between the ITC, SRECs, and avoided power costs! Do your homework upfront, then go soak up the free sunshine. Wishing you happy savings ahead and brighter days beyond!
