Financial Incentives for Solar Energy Adoption by Ohio Businesses
For businesses and homeowners in Ohio looking to adopt renewable energy systems, there are several incentives and opportunities available. This article will explore the Solar Renewable Energy Credits (SRECs) in Ohio, federal tax credits, and the City of Cincinnati's commercial property tax abatement program.
Eligibility Requirements for Solar Renewable Energy Credits (SRECs) in Ohio
To be eligible for SRECs in Ohio, homeowners or businesses must own their solar panel systems and have them installed and operational. The system should generate electricity, with any excess being sold back to the grid.
Benefits of SRECs in Ohio
Solar systems in Ohio that generate electricity can earn SRECs, which have a monetary value. As of 2024, each MWh of electricity produced generates one SREC, with the market value generally between $3 and $5. However, they are valued at $9 by code[1].
By generating SRECs, businesses and residents contribute to Ohio's goal of having 8.5% of its electricity come from renewable sources by 2026[1]. Additionally, solar systems also qualify for other benefits like the federal Residential Clean Energy Credit, which offers a tax credit of 30% of the system's cost for residential installations[5].
Additional Incentives in Ohio
Beyond SRECs, Ohio offers several other incentives for businesses and homeowners considering solar energy.
Federal Tax Credits
Both businesses and residents can benefit from federal tax credits like the Investment Tax Credit (ITC) for solar installations. However, third-party leasing models may not qualify for certain credits[3].
Accelerated Depreciation
Businesses can also benefit from accelerated depreciation under the Modified Accelerated Cost Recovery System (MACRS) schedule, which can help offset the cost of solar systems[4].
The City of Cincinnati's Commercial Property Tax Abatement program
The City of Cincinnati's Commercial Property Tax Abatement program offers significant benefits to property owners considering a commercial solar system. This program can potentially reduce costs and stabilize property values.
When combining the City of Cincinnati's Commercial Property Tax Abatement with interest rate reduction programs and warranties on solar panels, property owners can significantly improve their financial position before, during, and after the installation process.
Guidance for Your Solar Journey
8MSolar, a solar expert dedicated to helping Ohio businesses achieve their energy goals, provides a solar calculator that allows businesses to estimate potential savings from solar energy installations. They guide businesses through every step of their solar journey.
With the USDA REAP grant offering loan financing and grant funding for agricultural producers and small, rural businesses in Ohio to adopt renewable energy systems, now is an opportune time for residents to explore the commercial property tax abatement opportunities provided by the City of Cincinnati.
[1] Ohio Clean Energy Fund: https://ohiocef.org/ [2] Ohio Solar Rights: https://ohiosolarrights.org/ [3] Database of State Incentives for Renewables & Efficiency (DSIRE): https://www.dsireusa.org/ [4] Modified Accelerated Cost Recovery System (MACRS): https://www.irs.gov/businesses/corporations/article/0,,id=208069,00.html [5] Residential Clean Energy Credit: https://www.energy.gov/eere/residential/energy-efficient-home-upgrades-tax-credits
- To get SRECs in Ohio, one must own and operate solar panel systems that generate electricity, with excess power sold back to the grid.
- Each MWh of electricity generated by a solar system in Ohio creates one SREC, with a market value ranging from $3 to $5 in 2024, but valued at $9 according to code.
- By producing SRECs, businesses and residents contribute to Ohio's goal of having 8.5% of electricity from renewable sources by 2026.
- In addition to SRECs, solar systems in Ohio qualify for the federal Residential Clean Energy Credit, offering a 30% tax credit on system costs for residential installations.
- Ohio offers federal tax credits like the Investment Tax Credit (ITC) for solar installations, but third-party leasing models may not qualify for certain credits.
- Businesses can benefit from accelerated depreciation under the Modified Accelerated Cost Recovery System (MACRS) schedule, helping offset the cost of solar systems.
- The City of Cincinnati's Commercial Property Tax Abatement program offers benefits to property owners considering a commercial solar system, potentially reducing costs and stabilizing property values.
- Property owners can combine the City of Cincinnati's Commercial Property Tax Abatement with interest rate reduction programs and warranties on solar panels to improve their financial position before, during, and after installation.
- 8MSolar, a solar expert, offers a solar calculator for businesses to estimate potential savings from solar energy installations, guiding them through every step of their solar journey.
- With the USDA REAP grant offering loan financing and grant funding for renewable energy adoptions, now is an opportune time for residents to explore commercial property tax abatement opportunities provided by the City of Cincinnati.
