Solar Panels in Ohio: Costs and Incentives in 2024
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The typical cost for solar panels in Ohio was $31,944 in the second half of 2023 before incentives, according to data from EnergySage. That's slightly lower than the national average of $34,122. The average system size in Ohio was 11.6kW, the same as the national average.
While Ohio offers some solar incentives, they're relatively modest compared to some states.
Solar costs in Ohio at a glance
Ohio | U.S. | |
|---|---|---|
Typical cost of home solar system before federal solar tax credit | $31,944. | $34,122. |
Typical cost of home solar system after federal solar tax credit | $22,361. | $23,885. |
Median cost per watt | $2.75. | $2.96. |
Average system size | 11.6kWs. | 11.6kWs. |
Source: EnergySage, a solar and home energy product comparison marketplace founded in 2012. Data is from the second half of 2023. | ||
Costs and trends in Ohio
Ohio residential solar customers paid $2.75 per watt for solar panel systems in the second half of 2023, according to EnergySage. This was slightly lower than the national average of $2.96 per watt. Ohio households use 727kWh a month on average, slightly higher than the national average.
In 2023, prices held steady between the first and second half of the year, at $2.75 per watt. But high interest rates have made financing solar panels in Ohio more costly, reducing overall demand.
Solar policy in Ohio
Ohio has enacted various legislative policies that promote adopting renewable energy as part of the overall energy supply.
In 2008, the state enacted legislation including an Alternative Energy Portfolio Standard, AEPS, which requires energy utilities to produce certain percentages of their energy from alternative and renewable sources.
Solar renewable energy certificates (SRECs)
Ohio has offered a solar renewable energy certificate (SREC) market since 2009, where every 1 megawatt-hour of renewable energy generates 1 SREC, a certificate that can be bought or sold. To earn these certificates, you must register with the Public Utilities Commission of Ohio. But because of an oversupply in the market and low prices, this program might not translate into much savings for homeowners as of this writing.
SRECs have traded in Ohio between $3 to $5 in recent years. Even if you earned an SREC every month for a 10kW system, this would yield only about $60 a year.
However, your Ohio solar panel system could be registered to sell SRECs in Pennsylvania, where a single SREC has been selling for around $35.
Net billing
In Ohio, "most investor-owned utilities will have avoided-cost or wholesale-cost net billing," says TJ Lindquist, partner at Vespa Solar, a solar installer in Columbus, Ohio. Net billing is a billing convention that allows you to sell excess solar energy back to your utility at a rate that's lower than the retail cost of energy. The avoided-cost or wholesale-cost rate refers to the reduced dollar amount your utility credits back to you.
Generally, under net billing in Ohio, "30-40% of what they'd charge you is what they'll credit," says Lindquist.
This arrangement translates to fewer long-term electricity savings than one-to-one net metering, a billing convention that credits you for excess solar produced at retail rates.
Solar equipment sales tax exemption
Solar equipment in Ohio is exempt from sales tax, which might save you a few hundred dollars.
Can I get financing for a solar panel system?
In addition to tax incentives and rebates, there are options available. Many solar installers offer financing, but you may also be able to finance your solar investment through a home equity loan or home equity line of credit (HELOC). These options may have lower interest rates than financing with an installer, future opportunities for refinancing and possible tax benefits.
Home equity loans and HELOCs are ways to borrow against the value of your home, converting equity into cash. With a home equity loan, you receive a lump-sum payment and then pay it back at a fixed interest rate over an agreed period of time, typically from five to 30 years. HELOCs are more akin to a credit card, something you use as needed. You’ll usually have 10 years to draw from the line of credit, during which time you only have to pay interest, and after that you pay both the principal and interest. HELOC interest rates typically are variable, meaning your monthly payment could rise or fall over time. And with each of these options, you're using your home as collateral.
 Quicken Loans: NMLS#3030 | ||
|---|---|---|
Max LTV85% | Max LTV90% | Max LTV90% |
Min. Credit Score640 | Min. Credit Score680 | Min. Credit Score680 |
National / regionalNational | National / regionalNational | National / regionalNational |
Another option is a solar loan. Many banks, credit unions and online lenders offer these to fund solar panels and installation, with amounts typically from $1,000 to $100,000, and annual percentage rates ranging from 6% to 36%. They function like a personal loan: you receive a lump sum and repay it in equal monthly installments over a set period, typically two to seven years. And unlike with home equity financing, there is no collateral required for a solar loan. This means your home or solar panels aren’t at risk if you miss payments, but you may have to pay late fees.
So, yes, you likely can get financing. If you go this route, compare interest rates, terms and fees with any financing package that a solar provider may offer you to ensure you get the best deal.
