Squint hard enough they say, and outline of Ohio looks like a heart, beating right in the middle of America. “The Heart of It All,” all in fact. But no amount of squinting can hide the fact that solar power has quite set pulses racing here in the Buckeye State—yet.
You can thank the state legislature for that.
Renewable energy, like solar PV, have become something of a political football in Columbus. Which is a real shame, because Ohio certainly isn’t lacking in the sunny stuff.
It actually gets as much sun as many parts of Spain. And much more sun than the solar-mad Germans.
In fact, there’s enough sunshine to meet 35% of the state’s electric needs—and to save residents tens of thousands of dollars each—if solar PV panels were on every roof.
And that’s without the big dollops of incentives that other states are using to green their electricity. Not that Ohioans are completely missing out on helping hands. Starting with ours.
“Plenty of sunshine, you say? Exactly how much is ‘plenty’, though?” Here in Ohio plain facts speak louder than green dreaming. So let’s give you some numbers to play with.
How much sunshine does the average Ohioan's roof collect each year?
first off, it seems those old state rivalries carry through from the sports to the solar league. There’s a tussle between our 2 top metro areas.Cincinnati tops out best, at 1,700 kWh per meter square. But Cleveland isn’t too far behind, at 1,600 kWh.
Of course, that sort of sunshine resource isn’t as high as way out West, say in Arizona or California. But it’s as good as the numbers for New Jersey. And that state has somehow managed to pile 15 times more solar panels onto its roofs than we have managed so far in Ohio.
Partly that’s because the NJ state government is full-square behind solar. But it’s also because those Tri-staters are onto something. Something like the big returns on investment that solar PV promises. Time to do some math.
Ohio Solar Power: Check your Savings, Costs, Tax Breaks, Incentives and Rebates
Return on Investment for Residential Solar Power in Ohio
Let’s start with IRR—or “internal rate of return”. It may sound a little scary. But here at Solar Nation it’s the number we like to crunch first.
IRR is what investment analysts use to see where to put their money. And it lets you see how money sunk into solar panels compares to things like stocks.
- how much sunshine you’ll get
- how many panels you can fit on your roof
- how much money you’ll save from slashed bills
Note That every home is unique and has it's own special quirks. to get a more accurate calculation for your home we recommend you visit our solar power calculater page
Let’s start out with 5 kW of PV panels in Cincinnati. Plug in the system, turn on the sunshine, and we reckon your rate of return should be around 5.5% over 25 years. That’s a solid number, one that your financial adviser would no doubt approve of.
But what about those tens of thousands of dollars in utility bill savings? Well, a 5kW solar system, snugly fitted to a Cincinnati (or Cleveland) roof, could easily generate you $20,000 of electricity over 25 years.
With a 5 kW solar system price-tagging for as little as $15,000, you’ll be in the black, even before we dig into the incentives available.
And don’t forget your panels are likely to keep on making you free electricity for 30 years or more.
Buying a 5KW Solar System—an Ohio case study
The great news for those who are out to buy is that a solar PV installation no longer comes with an eye-watering sticker price. Prices have fallen particularly fast over the last 5 years, heading towards $15k for an outright purchase of a 5kW system.
So what will those dollars invested do for you, your family, and your home? Quite a lot, actually.
2. That comes to nearly 6,000 kWh of power harvested from the sun, by your roof, every year.
3. That’s more than half knocked off the average household bill in the Buckeye state,all gone in a puff of sunshine.
That leaves more wiggle room for you and your family’s finances—and more breathing space for the planet.
Hold on, we hear you say. Unless you’re heading down the zero-down route (which is most definitely on the table for those in Ohio), there’s still the little matter of $15,000 to shell out for your brand new system.
1. Start with your $15,000 sticker price, before tax.
2. With Ohio’s 5.75% sale tax, that’s bumped up to $15,860
3. But those legislators have managed to pass asales tax exemption for solar. So you can zero that out.
4. Now here comes the federal Income Tax Credit (ITC), with its whopping 30% credit on your first year’s outlay. Your bill now comes tumbling down to $10,000.
5. And, of course, you’ll be saving on your electricity for that first year from day one. So take another $630 off.
6. So,during your first year your net expense is just $9,370!
But those bill savings don’t stop at year 1. You’ve got decades of savings to look forward to:
1. Over 25 years,those savings would mount up to tidy $15,700. You’re in profit already!
2. But that’s assuming your electricity bill never increases. In reality, the average increase has been 3% or more a year.
3. Higher bills mean higher savings from solar. Your pile of cash now grows to $21,500!
Given your first your first year outlay is less than $10k, that’s pretty impressive.
Ohio Solar Power Incentives, Tax Breaks and Rebates
It saddens us to say, but it doesn’t matter whether you’re a Cincinnati Bengal or Cleveland Brown—in Ohio you won’t be anywhere near the top of the league table, when it comes to help for going solar. But there are still some nuggets of state and utility assistance out there.
So let’s do a dive into what incentives, tax breaks and rebates that are available—starting out with mysterious beast called the “RPS”.
An RPS is basically a target for renewables which the state sets, in the hope of goading the utilities into greening their electricity supply.
Ohio started out with an RPS in 2008, with a the rather moderate target of 12.5% of all electricity to be renewable by 2024.
They even added a solar “carve out,” fora measly 0.5%, for the same year.
That was never likely to cause the state’s utilities to break into a sweat. But even that moderate target was frozen in 2014, for 2 years. Now there are moves to extend the freeze even further, meaning the utility companies would be let off the hook for longer.
RPS’s really matter to those wanting to join the solar dream. The power companies are,naturally enough, less than keen on handing the keys to power generation over to you.
The lack of a strong RPS target translates into less help for you in your efforts to go solar.
What is an RPS really?
You’ll often hear the letters “RPS” thrown about when talking about solar energy. But what exactly is a ‘Renewable Portfolio Standard’?
When a state sets an RPS target, they’re saying that utilities must generate a certain amount of their electricity from renewable sources, by a certain date. If not, they’ll face big fines.
Which is a much-needed stick. After all, power companies need a push.
Most still make money selling us more and more energy. And they’re not best pleased that we’re starting to generate our own power, taking revenue away from them.
The threat of fines makes the utilities much keener to offer their customers incentives, rebates, and grants for their solar systems.
Ohio tax credit
For income-tax payers, tax credits on their spending on solar aren’t just a boost to the economic side of the project. They’re a well-earned reward. After all, going solar means you’re doing your bit for the nation’s energy independence, the environment, and for high-tech jobs.
But instead of a pat on the back, Ohio’s state government gives a shrug of the shoulders to today’s solar heroes. No tax credits for you, from them.
It’s a different story with the federal government. A long-standing income tax credit (ITC) of 30% for spending on solar panels see’s your project costs cut by almost a third. Now that’s the sort of encouragement we like to see, here at Solar Nation.
Are there any Rebates for Solar Power in Ohio?
Once upon a time some, back when the ink on the RPS target was still wet, some of the state’s utilities offered their solar-installing customers big rebates. AEP would actually give you back as much as $12,000 towards the cost of the panels you installed, a huge help.
Sadly, that rebate is no more. And there’s no state-wide scheme of rebates either. Of course, if the RPS was “defrosted” and strengthened, many utilities would jump back into the rebate game. Until then, you’re on your own in the Buckeye State.
Ohio Tax Exemptions
Any good news on tax exemptions? Yes, there’s a solitary beam of sunlight cast by the sales tax exemption. You can knock off the 5.75% sales tax from your bill, which covers both the equipment and installation cost.
There are also chinks of light on property tax exemptions. Why do you need a property tax exemption? Well, when you install solar those solar panels add a huge value to your home.
If you live in Cleveland or Cincinnati, such common sense reigns. There’ll be no property tax for your home’s added solar value. But elsewhere in Ohio don’t expect any tax relief for your good deeds.
Ohio Electricity Rates
Electricity rates make a big difference to the financial benefits of solar power. It’s one of those funny situations where the higher your rates, the better.
That makes the fact that in Ohio you pay exactly the national average for electricity something of a mixed blessing.
In 2015, the Ohio’s average residential rate was 12.7 cents per kWh. And the U.S. national average was also 12.7 c/kWh. It’s a draw.
Those rates haven’t been growing at an average pace, though. Since 2005,Ohio has seen a rise of 50%, while nationally rates have gone up by only(!) 40%.
That makes for a 5% rise per year,something that’s likely to extend far into the future. It really does makes switching to solar soon ever more pressing.
Is there Net Metering in Ohio?
Net Metering is a nice little sweet spot in Ohio’s solar scene, and a welcome one at that. With Net Metering you get to benefit from the fact that your no longer a power consumer with panels on the roof.
Much of the time you’re actually a power generator for the grid.
In Ohio, you’ll get proper credit for all of that sun-powered electricity you sending to your neighbors. You don’t get paid quite as much as you are charged for buying electricity. But it’s close.
That means it can make a lot sense to get as many panels onto your roof as possible, turning your home into a little residential solar power plant (and a real big money spinner for you).
What's net metering anyways?
Net Metering is a vital part of making solar power work for homeowners. It means even when the power you generate doesn’t match the power you use, little is wasted.
That’s important because the electricity your system produces varies as the sun moves round the sky. When the sun is highest in summer you may produce more electricity than you use.
Under Net Metering, that extra power gets sent to the grid. So you actually become the power station for the utility.
Your utility has to pay you for the energy you’re supplying to them under Net Metering. In Ohio this is at the “unbundled” electricity rate, close to the rate you normally pay them, Not bad at all.
Welcome to the wonderful world of energy independence.
Are there 0 down payment financing Options in Ohio?
Yes, the whole range of pay-nothing-now options are available in Ohio—from loans to leases to power purchase agreements (PPAs).
These are increasingly popular, and offer a great way to leverage your solar investment. In many cases you’ll end up with a green-powered home without spending a single cent upfront.
Each option has its advantages and disadvantages, though.
Let’s take a look at which might best suit you:
Solar Lease in Ohio
Leasing works wonders for those who can’t tap the equity in their home for a loan. Or those who can’t access the upfront cash needed for a purchase. A lease lets you put $0 down to get those panels on your roof. Then you watch the savings roll in.
The savings won’t be as impressive as using your own money. But you will be making excellent returns, as you won’t have stumped up any cash yourself.
But it does mean that you’ll want to be sure those panels will be pumping out electricity for their whole lifespan. A performance-guarantee clause on your lease ensures that.
Solar Power Loan?
If you’d prefer to own your solar panels, for only a small (or even no) outlay, then a solar loan makes perfect sense.
This way you’ll get better rates of return, especially if you can tap into the federal tax credits. A home-equity line of credit can make the loan even more affordable—and you won’t have to raid your cash savings.
It’s worth noting that, with a solar loan, any maintenance or cleaning your panels will be your responsibility.
And another thing to watch out for here in Ohio. Electricity rates here are pretty much average, meaning your bill savings will be average too. So your overall profit will be less than buying a system outright, because of your loan’s interest payments.
You will, however, be saving the planet for no out-of-pocket cost. Pretty cool, we think.
PPA Option on Ohio?
This is the other approach for going solar with no (or little) upfront cost. PPAs are similar to leases. But rather than paying a fee to lease the panels from a third-party, you’ll only pay for the power that they produce.
No hassles of ownership. No worries about performance. And no big down-payments.
You’ll find the savings are quite a lot less than with purchases or loans, though. But remember that you’ve put no money down to earn those savings.
What is a PPA?
A Power Purchase Agreement, or PPA, is an agreement between you and your solar panel provider. You provide them with the roof for the panels. They provide you with power at a guaranteed price.
Like a lease, you’ll benefit from solar power without worrying about details like planning, installation, equipment upgrades, maintenance, and cleaning.
Most PPAs also have an option for you to buy the system at the end of the contract, which can add real value to your home.
One thing to check out is the PPA’s escalator rate. This is where the PPA price rises gradually throughout your PPA contract, according to an agreed schedule.
Just make sure your PPA escalator isn’t too steep. It should be much less than expected utility rate rises.
Is there Feed In Tariff in Ohio?
It’s probably no surprise to hear that there’s no state-wide Feed In Tariff in Ohio.
These schemes are one of the most financially attractive incentives for solar power. Only the most forward-looking governments have put them in the books (hello Hawaii and Germany!).
Ohio’s state government has decided (for the moment) not to embrace the solar future quite that firmly. Instead of the guaranteed payments of a Feed In Tariff, it has decided to adopt a market-based performance payment—using Solar Renewable Energy Credits, or SRECs.
Its RPS is weak, and the utilities don’t really need your SRECS. As a result,the market has collapsed, especially since the RPS was frozen. With prices for SRECs slipping below $15 lately, you’ll be lucky to see a hundred-dollar bill from a year’s worth of your solar energy production.
The good news is that the price of SRECs can really only move up from here. If the legislature ever did an about-turn on Ohio’s RPS, their value could soar—and you could see a nice little earner.
Leasing vs Purchasing: What's best for Ohio Homeowners?
As with many things, the choice between leasing and purchasing depends on how you see risk and reward. And on how much skin you want in the solar game.
Leasing works well for the risk adverse. For those who want to help clean our energy, and cut pollution, but without taking on the hassles (and big initial outlay) of purchase.
Purchasing is good for those with the money to invest. For those who want to make the most of the benefits and incentives out there for switching on to the sun.
What is the Solar Panel Installation Process in Ohio?
The solar installation process starts with home visit by an energy assessment team. They’ll talk to you about your bills, how best to site your system, and the financial options available.
Once they’ve got the measure of your place, and have found out exactly what your needs are, they’ll be provide you with a fully detailed PV quote and a short review of the best solar panels in the world.
Once you’ve agreed and signed your agreement, the solar installation team can schedule a date for transforming your house from energy sink into a solar-powered energy producer! The installation process usually only takes three to four days.
1. Fill in our simple solar form 2. Receive quotes from the best local solar suppliers 3. Choose the best money-saving solar option for you 4. Once your system is installed, just sit back, relax—and watch the savings roll in
1. Fill in our simple solar form
2. Receive quotes from the best local solar suppliers
3. Choose the best money-saving solar option for you
4. Once your system is installed, just sit back, relax—and watch the savings roll in
Right now, Ohio is on the look-out for some true solar heroes.
The more people in the state going solar, the more the balance will shift towards building up the state’s solar industry—rather than undermining it.
It’s not as if you need to be that heroic, either. There’s still lots of money to be made from your solar-installing, planet-saving ways.
You don’t even need to put down any cash, with options like loans or PPAs. And the potential in the Buckeye state right now is all on the upside.
So the question is—are you ready to don the S-embossed costume and fly off into your solar-powered future?