How Exactly Does Solar Work with My Utility?

How Does Solar Work with My Utility?

One of the common misconceptions we hear is that there isn’t enough sunlight in Ohio to make solar worth the investment. We get that logic: our state gets way less sunlight per year than many geographic areas in the United States. And, in the winter, the days are indeed much shorter.

But consider the summer and fall. There are long hours of sunlight during these months. We find that most days of the year are long and sunny enough to provide more than a household’s daily energy needs.

If only there were a way to capture that extra sunlight from the summer for use in the winter… Guess what? There is!

Your utility company is required to compensate you for the extra energy you produce in Ohio. This system is called Net-Metering, and it’s what makes solar economical for homeowners in Ohio.

Understanding how my solar system works with my utility

Imagine it’s the sunniest of summer days. Your solar system is producing way more than your home is using that day. This energy doesn’t go to waste. It goes right to your neighbor’s homes to power their electricity use. And, the utility company is required to credit you for that energy that you put into the utility grid.

When you get your utility bill, you’ll see how much solar energy you consumed that month and how much solar energy you sent back into the utility grid. It will also show how many credits you have received for that energy you sent back.

After a long sunny summer, you will have banked up TONS of credits from those days where your solar system produced more energy than you consumed.

Come to the wintertime, and you will begin to use more energy than your solar system can produce. So, you’ll be using power from your utility company instead of your solar system. But you have those credits saved from the summertime. When it’s billing time, your utility will start subtracting those credits before charging you for the utility power you consume.

If designed with a 100% energy offset, your solar system will produce enough credits during the summertime to completely offset the energy you use during the wintertime. So, your bill with the utility at $0.00 throughout the entire year.

What you’ll learn when you sign up for a free solar evaluation

  • Which clean energy technologies will best meet your energy goals
  • What size solar array will fit on your available space and expected output for that system
  • Ways to finance solar and other improvements – such as our zero money down loan or upfront purchase option
  • How solar will improve the value of your home

It’s our job to do complicated math. We do it every day, and our Solar Consultants are pros. They’re open and transparent about their calculations, so if you’re curious, they’ll explain the math to you until you understand yourself! That’s all part of our consultative process.

When we draw up a solar evaluation for your home, we consider your annual energy production, the tilt and orientation of your roof, and so on. These factors add up to your solar sweet spot – where your system will produce just enough excess energy during the summer to pay for your energy needs during the winter.

Want to get the most savings from your solar investment?

Sign up soon to take advantage of the full solar tax credit. Sign up today to see how Third Sun Solar can help you lock in your utility rate for the next 30 years!

How Exactly Does Solar Work with My Utility?

How Does Solar Work with My Utility?

One of the common misconceptions we hear is that there isn’t enough sunlight in Ohio to make solar worth the investment. We get that logic: our state gets way less sunlight per year than many geographic areas in the United States. And, in the winter, the days are indeed much shorter.

But consider the summer and fall. There are long hours of sunlight during these months. We find that most days of the year are long and sunny enough to provide more than a household’s daily energy needs.

If only there were a way to capture that extra sunlight from the summer for use in the winter… Guess what? There is!

Your utility company is required to compensate you for the extra energy you produce in Ohio. This system is called Net-Metering, and it’s what makes solar economical for homeowners in Ohio.

Understanding how my solar system works with my utility

Imagine it’s the sunniest of summer days. Your solar system is producing way more than your home is using that day. This energy doesn’t go to waste. It goes right to your neighbor’s homes to power their electricity use. And, the utility company is required to credit you for that energy that you put into the utility grid.

When you get your utility bill, you’ll see how much solar energy you consumed that month and how much solar energy you sent back into the utility grid. It will also show how many credits you have received for that energy you sent back.

After a long sunny summer, you will have banked up TONS of credits from those days where your solar system produced more energy than you consumed.

Come to the wintertime, and you will begin to use more energy than your solar system can produce. So, you’ll be using power from your utility company instead of your solar system. But you have those credits saved from the summertime. When it’s billing time, your utility will start subtracting those credits before charging you for the utility power you consume.

If designed with a 100% energy offset, your solar system will produce enough credits during the summertime to completely offset the energy you use during the wintertime. So, your bill with the utility at $0.00 throughout the entire year.

What you’ll learn when you sign up for a free solar evaluation

  • Which clean energy technologies will best meet your energy goals
  • What size solar array will fit on your available space and expected output for that system
  • Ways to finance solar and other improvements – such as our zero money down loan or upfront purchase option
  • How solar will improve the value of your home

It’s our job to do complicated math. We do it every day, and our Solar Consultants are pros. They’re open and transparent about their calculations, so if you’re curious, they’ll explain the math to you until you understand yourself! That’s all part of our consultative process.

When we draw up a solar evaluation for your home, we consider your annual energy production, the tilt and orientation of your roof, and so on. These factors add up to your solar sweet spot – where your system will produce just enough excess energy during the summer to pay for your energy needs during the winter.

 

Want to get the most savings from your solar investment?

Sign up soon to take advantage of the full solar tax credit. Sign up today to see how Third Sun Solar can help you lock in your utility rate for the next 30 years!

2023: An Up to Date Guide to The Solar Investment Tax Credit

Updated: April 1, 2023 

One of the greatest benefits of a solar energy investment is the tax benefits.

Homeowners who go solar not only eliminate their electric bill, but they also can get 30% of the system cost back through the Solar Investment Tax Credit. 

This is bright news for homeowners who have experienced escalating energy costs. 

We’ve compiled an up-to-date guide detailing the tax credit: how it works when it will expire and who qualifies.

What Is the Solar Tax Credit?

Otherwise known as the solar investment tax credit, federal investment tax credit, or ITC for short, this tax credit gives a solar system owner the ability to deduct 30% of the system cost from taxes owed. Solar Energy Storage counts towards the tax credit too. 

For a long time, the tax credit allowed you to recoup 30% of solar system costs.

A step-down schedule began in 2020 when the tax credit dropped from 30% to 26%. The stepdown was put on pause for two years when the federal government signed the 2020 Covid relief bill. 

In August of 2022 through the Inflation Reduction Act, the Solar Investment Tax Credit was increased back to the original 30% and extended for a decade. A new stepdown schedule will begin in 2032. 

What does the Solar Tax Credit Look Like? 

If you get a solar system installed in 2023 for $25,000, you will recoup $7,500 through the solar tax credit. 

Do I Qualify for the Solar Tax Credit?

What are the requirements to take the solar tax credit?

Only one!  You must have a tax liability. In other words, you must owe taxes to take advantage of this tax credit.

One of the biggest misconceptions about the solar tax credit is that you get money back when you go solar. The federal government does not give money out in the form of grants or direct payments. The federal solar tax credit offsets taxes that you owe.

Solar Tax Credit FAQ’s

Can I carry it forward?

The law requires the credit to be used in full the year your system is installed if you have enough tax liability.

If you do not have enough tax liability, you can carry the tax credit forward into the following years. The rules start to change here for commercial and residential entities.

Commercial entities can carry forward the tax credit for up to 20 years to recoup taxes.

For residential solar system owners, the tax liability can be carried forward for up to five years, until the full amount is used up.

Is there a cap?

No, there is no limit or cap on the solar tax credit. No matter how much you spend on your solar installation you’ll be able to claim the tax credit in full for the year the system was installed.

What expenses can I claim with this tax credit?

  • The full turnkey solar installation can be claimed on the solar tax credit.
  • As long as they’re powered by solar, solar batteries can be claimed.
  • Batteries retrofits are also eligible if installed within one year of the solar installation.  
  • Roof repair and replacement are not covered by the solar tax credit.

Solar Power and Rural Electric Co-Ops in Ohio

Solar Power and Rural Electric Co-Ops

Rural electric co-ops and solar power have a long history here in Ohio. In the 1930s, Ohio established rural electric cooperatives. At the time, investor-owned utilities refused to service rural areas because it did not make economic sense. The structure of rural electric cooperatives provided a means to get electricity to rural America.

These cooperatives still stand today and are member-owned, like the title “cooperative” would suggest. You get one vote towards the board of directors if you’re a participant in the cooperative. Rural electric cooperatives are nonprofit entities, unlike more prominent investor-owned utilities.

Because these locally owned, nonprofit entities are much smaller than national energy companies – you might think it would be easier to go solar when plugged into one. But there are a few nuances to be aware of when choosing to go solar if your electric provider is a rural co-op.

Rural Ohio Net Metering Differences

Rural electric co-ops in Ohio are not required to offer net metering like investor-owned utility companies are. Most of them do, however, not all.

Additionally, because rural co-ops are member-owned and not required to follow regulations set out by the Public Utilities Commission of Ohio (PUCO), they can set their own net metering rules. For example, when you produce more energy than you consume, you send that excess back to the grid. The rate you’re paid for that energy production varies from rural co-op to co-op.

Rules and regulations around fixed-rate amounts on your monthly bills vary. And the amount of electricity that you can send back to the grid annually also varies.

Because there isn’t one standard for the 24 rural electric co-ops, solar installers need to be familiar with the local rules, rates, and regulations.

Why Solar Power and Rural Electric Co-Ops Matters

Why is all of this important to know? If a rural electric co-op services your home and you’re thinking about going solar, you should be paying attention.

Your solar installer must understand your cooperative’s rules and rates to provide an accurate economic analysis of your solar installation project (that goes for investor-owned utilities, too!) We encourage you to ask them:

  • When I send electricity back to the grid – what rate will I get for that production?
  • Will there be fixed charges on my monthly electric bill that can’t be paid with my excess generation?

Kokosing Solar works very closely with the Distributed Generation Coordinators employed by each utility, including rural co-ops. We do this because it’s part of our job as a full turnkey solar installation partner. We know our customers trust us to stay up to date on the net-metering rules and fixed-rate fee structure.

*Keep in mind – there is certain information rural electric cooperatives will only give to their customers and not us! When this happens, we will ask you to communicate directly with your provider to retrieve this information.

Lastly, if your utility has policies that disincentivize solar production – become an advocate! If you’re part of a co-op- use your vote, attend public meetings and make your voice heard! Here is just one example of one of our customers who could go solar after advocating at the local level.

If you have any questions about going solar – reach out! We would love to help answer your questions.

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