Solar Incentives in Ohio
Ohio homeowners who installed solar or plan to do so in 2026 have access to several active state-level incentives. A statewide property-tax exemption removes qualifying solar fixtures from real property taxation entirely — at 100% — for energy facilities with a nameplate capacity of 250 kilowatts or less, covering virtually all residential rooftop systems completed on or after January 1, 2010; county auditors administer this under state statute. Ohio also requires electric distribution utilities to offer net metering to customer-generators sized to offset their own usage, with monthly billing credits applied at a one-to-one rate within the billing period; monthly net excess generation is credited at the generation or energy-only component of the applicable utility rate, which varies by utility. Property owners may also access PACE financing through special energy improvement districts, repaying project costs via voluntary special assessments on their property tax bills, with terms that vary by district. A separate sales and property-tax exemption exists for qualifying energy conversion facilities, though it is primarily aimed at commercial and industrial sites.
The federal picture changed significantly for 2026. The residential Clean Energy Credit under Internal Revenue Code §25D — commonly known as the 30% federal solar tax credit — expired for systems placed in service after December 31, 2025, following enactment of the One Big Beautiful Budget Act (Pub. L. 119-21). Homeowners installing new residential systems in 2026 do not qualify for that credit, which materially lengthens payback timelines compared to recent years.
Ohio's residential electricity rate averaged approximately 18.78 cents per kilowatt-hour as of March 2026, up roughly 2.68 cents year-over-year. That rate level affects how quickly solar savings accumulate, and prospective buyers should model payback using current utility-specific net metering export rates rather than any statewide flat figure.
Figures here are verified as of June 2026 against official sources; programs change every legislative session and rate case, and the Ohio Department of Taxation, the Public Utilities Commission of Ohio, and the Ohio Department of Development are the authoritative sources for current program rules.
Federal credit update. The federal residential Clean Energy Credit (the 30% “solar tax credit” under §25D) expired for systems placed in service after December 31, 2025. New 2026 residential installs do not qualify; a 2025 install can still be claimed on a 2025 return (IRS Form 5695). What this means for 2026 →
Current solar incentives in Ohio
Property Tax Exemption for Energy Facilities 250 kW or Less
Ohio exempts from real property taxation any fixture or other real property that is part of an energy facility with an aggregate nameplate capacity of 250 kilowatts or less, as long as construction or installation was completed on or after January 1, 2010. This covers essentially all residential and small commercial rooftop solar systems, so installing solar does not increase the property tax bill.
| Amount | 100% exemption from real property taxation for qualifying fixtures of energy facilities with nameplate capacity of 250 kW or less. |
|---|---|
| Who qualifies | Energy facilities (including solar) with aggregate nameplate capacity of 250 kW or less, constructed or installed on or after January 1, 2010. |
| Administered by | County auditors / Ohio Department of Taxation (statewide statute) |
Source: ORC 5709.53(B) (S.B. 232, 2010; amended H.B. 197, 2020) Official source →
Qualified Energy Project Tax Exemption (Payment in Lieu of Taxes)
Larger renewable energy projects certified as Qualified Energy Projects by the Ohio Director of Development are exempt from public utility tangible personal property tax and real property tax. In exchange, the owner makes annual service payments in lieu of taxes to the county; for solar projects the payment is $7,000 per megawatt of nameplate capacity, and county commissioners may require an additional payment up to a combined total of $9,000 per MW. Projects of 20 MW or more also require county commissioner approval, and projects must meet Ohio-employee and other conditions.
| Amount | Full exemption of real and tangible personal property tax; PILOT of $7,000/MW/year for solar (county may increase total to up to $9,000/MW/year). |
|---|---|
| Who qualifies | Utility-scale renewable energy projects certified by the Director of Development; conditions include application deadlines, construction timelines, Ohio-domiciled workforce ratios, and county approval for projects of 20 MW or more. Not a homeowner program. |
| Administered by | Ohio Department of Development; county commissioners |
Source: ORC 5727.75 Official source →
Net Metering
Ohio electric distribution utilities must offer a net metering contract or tariff to customer-generators whose generation (such as rooftop solar) is sized to offset part or all of their own usage. The tariff must be identical in rate structure and monthly charges to the customer's standard rate. Monthly net excess generation is converted to a monetary credit valued at the energy (generation) component of the rate and applied to future bills. Metering uses a single bi-directional meter; a customer whose meter cannot measure two-way flow pays for the upgrade.
| Amount | 1:1 offset of usage within the billing period; monthly excess credited at the generation/energy-only component of the utility's rate (no credit for delivery components). Varies by utility tariff; see PUCO rule. |
|---|---|
| Who qualifies | Customer-generators of Ohio electric utilities using solar, wind, biomass, landfill gas, hydro, microturbine, or fuel cell generation intended primarily to offset the customer's own electricity requirements. |
| Administered by | Public Utilities Commission of Ohio / electric distribution utilities |
Source: ORC 4928.67; OAC 4901:1-10-28 Official source →
Exempt Facility Certificate: Energy Conversion and Thermal Efficiency Facilities (Sales and Property Tax Exemption)
Ohio businesses that install qualifying energy conversion facilities (equipment at an industrial or commercial site that converts fuel or power use from natural gas or fuel oil to an alternate source, which can include on-site renewables) or thermal efficiency improvement facilities can apply to the Ohio Tax Commissioner for an exempt facility certificate. While the certificate is in force, materials incorporated into the facility are not treated as taxable sales or uses (sales/use tax exemption) and the facility is not treated as a real property improvement or taxable personal property (property tax exemption).
| Amount | Sales/use tax exemption on tangible personal property incorporated into the certified facility; property tax exemption on the certified facility while the certificate is in force. |
|---|---|
| Who qualifies | Industrial or commercial plants or sites in Ohio with qualifying energy conversion, thermal efficiency improvement, or solid waste energy conversion facilities; requires application to and certification by the Ohio Tax Commissioner. Not available for residential installations. |
| Administered by | Ohio Department of Taxation (Tax Commissioner) |
Source: ORC 5709.20-5709.25 Official source →
Special Energy Improvement Districts (PACE Financing)
Ohio law allows property owners to form special improvement districts (SIDs) to develop and finance special energy improvement projects, including solar, on their property. Participating owners repay project costs through special assessments on their property tax bill, and the petition to create or join an energy SID must be signed by 100% of the owners of the property to be assessed, so participation is voluntary. SIDs may also aggregate and sell renewable energy credits generated by member projects with the owners' consent.
| Amount | Financing terms vary by district and project; repayment is via voluntary special assessments on the property. |
|---|---|
| Who qualifies | Owners of real property within a municipality or township that has created (or joins) a special improvement district for special energy improvement projects; used primarily for commercial property. |
| Administered by | Local special improvement districts / participating political subdivisions |
Source: ORC Chapter 1710 (1710.06) Official source →
Verification note. Some official source pages for this state block automated access from our servers, so one or more figures here rest on the underlying statute or an official search result pending a final browser check. The cited official source is authoritative — confirm current terms there before you rely on a figure.
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Programs verified as of June 2026 against official state and federal sources (each cited above); refreshed quarterly as legislatures and utility rate cases change the rules. How we verify this data. This page is informational only — not tax or legal advice.