Ohio Solar Incentives for Homeowners 2024 is one of the hottest topics we cover with new clients. Ohio is an excellent residential state for anyone interested in investing in solar energy. Not only are there various incentives available to Ohioans, but the economics of solar vs. utility energy in Ohio almost always has solar in the lead. In this blog post, we’ll take a look at the different incentives Ohio has to offer to those who are interested in investing in solar energy.

Take Advantage of Solar Net Metering in Ohio

Ohio has a net metering program available to residential solar energy customers.

Think of it this way: through net metering, you treat the grid like a BIG battery. You store energy in the grid when you produce more than you need, and take energy from the grid when you aren’t producing solar.

Net-metering allows you to stockpile the energy you make in the electric grid in the form of credits.

When you “stockpile” energy like this, your excess solar powers your neighbors’ homes, helping them reap some of the benefits of onsite, direct solar energy. Per The State of Ohio’s Public Utilities Commission, the utility must credit you for the energy you produced and send along. These credits appear on your monthly electric bill and roll over month to month.

If you’ve lived in Ohio for a while, I’m sure you can imagine which seasons have better solar returns. This is when net-metering really comes into play. Your solar system generates most of the energy you’ll need for the year during the sunny months. An experienced solar installer will design your system big enough that you bank up a bunch of credits to use during the cloudier winter months, when your solar system isn’t producing as much.

One drawback of net-metering? You can only produce up to 120% of what you consume annually, and if you produce more than that, it jeopardizes your agreement with your utility for net metering. So, working with an experienced installer who understands how to maximize the benefits available through net metering is essential.

In summary, net metering allows customers to receive credit for any excess energy their solar system produces and sends back to the grid. This credit can then be applied to future energy bills, reducing costs for the customer.

Are you eligible for the solar investment tax credit?

If you pay federal taxes, you’re eligible for the solar investment tax credit (ITC). This tax credit is a solar incentive available through the federal government that allows you to take 30% of what you paid for solar from the federal taxes you owe.

This incentive is available to residential solar energy customers in Ohio and can help reduce the cost of purchasing and installing a solar energy system.

Paying for the solar system – understanding loan options

For some people having a low energy payment is the priority. For others, they want the best deal on the lump sum they pay for their solar system. In both cases, loan options are available to help you meet your goals.

Solar loans have become mainstream in the past five years, making solar accessible to even more homeowners across Ohio. Solar loan programs are designed to help those interested in purchasing a solar energy system to finance the purchase.

Selling Your Home With Solar

Solar increases home value!

According to a 2020 report by Zillow, homes with solar sell for 4% more. This increase in value is due to the potential cost savings of electricity that solar panels can provide.

Solar panels are becoming increasingly popular, making them an attractive feature to potential buyers. Ultimately, the amount of value a solar installation adds to your home will depend on the size and quality of the system and the local market.

When a new homeowner moves into one of our installations, we often work with the new homeowners. They’re often excited by the new technology and eager to reap the benefits of a free utility!

Ohio Solar Incentives for Homeowners in 2024

Overall, Ohio is a great state for those interested in investing in solar energy.

As much as we wish the advertisements online were true, there are no Ohio incentives for free solar. If there were, we would lead with that.

Be wary of any solar company who leads with “No Cost” or “Free Solar” in their advertising. In our experience, we know these installers don’t have your best interests in mind. And we’ve seen their deceptive advertising tactics have a negative effect on our communities and occasionally take the installer down themselves.

Ohio Solar Incentives for Homeowners

We hope this blog post has provided some helpful information about the different solar incentives available in Ohio.

We would love to help you understand your energy goals better.

Our Solar Consultants have a consultative style and are always here to work with you to evaluate if solar is a good option for you (or not!). When you’re ready to learn more from one of our experienced team, reach out!

KOKOSING SOLAR DONATES SOLAR ARRAY TO ENVIRONMENTAL NONPROFIT

The upgrade installed at the Grand River Conservation Campus will reduce the facility’s carbon footprint and support public dialogue about renewable energy.

LOCATION –Morgan Swamp Preserve, Grand River Conservation Campus, Rock Creek Ohio

Within The Nature Conservancy’s Morgan Swamp Preserve, the Grand River Conservation Campus is a place where people can enjoy nature through numerous recreation opportunities, including hiking, paddling, fishing, nature observation and more. A new solar panel installation at the Grand River Conservation Campus will help the facility save money, reduce their carbon footprint, and expand public dialogue about renewable energy.

The donation was made after conversations between The Nature Conservancy (TNC) and Kokosing Solar began in 2021. Kokosing Solar was invested in assisting The Nature Conservancy to advance their mission to conserve the lands and waters on which all life depends. In Ohio, this includes supporting their work to advance renewable energy buildout in ways that are good for people and nature.

“Kokosing Solar is grateful for The Nature Conservancy’s work as they help the people of Ohio understand how the transition to clean, renewable energy is about job creation, diversification of our economy along with clean air and a healthy climate. Our donated project has dual benefits for the nonprofit: the solar system will offset some of the nonprofit’s utility expenses while also bringing the topic of solar energy into the environmental education that is offered at the Dr. James K. Bissell Nature Center at the Grand River Conservation Campus.” — Geoff Greenfield, Director of Solar Strategy at Kokosing Solar.

The addition of 20 rooftop solar panels will allow The Nature Conservancy to reduce their contribution to greenhouse gas emissions over time. The 7.4 kilowatt solar array will help supply energy for the picnic pavilion, nature center and electric car charging stations, offsetting an annual equivalent of 111 tons of CO2. In greenhouse gas emissions, this is equivalent to driving a car 498,433 miles, or planting 240 acres of forest.

“The Nature Conservancy is working to address climate change and is a strong supporter of safely expanding the use of renewable energy sources, including solar, as part of the solution. We are grateful for Kokosing Solar’s gift of solar panels at the Grand River Conservation Campus. Not only will they help us reduce our reliance on fossil fuels at the preserve, but they will also provide visitors a chance to see and learn about the benefits of renewable energy on site.” – Marcel Weigand, northeast Ohio conservation coordinator for The Nature Conservancy.

About Kokosing Solar

Kokosing Solar has been designing, building, and financing clean energy solutions for commercial clients across the Midwest since 2000. We bring more than 22 years of solar installation experience as Ohio’s longest-standing full-service solar installer. In 2022 we became Kokosing and are strengthened by the 72 years of experience of Kokosing, Inc., one of the largest family-owned construction companies in the Midwest and Mid-Atlantic. We serve residential and commercial clients in Cleveland, Cincinnati, Columbus and beyond. We are a fully insured and licensed Electrical Contractor with highly –trained, NABCEP –certified installers committed to delivering safe high-performance systems with top-notch customer service.

About The Nature Conservancy

The Nature Conservancy (TNC) is the world’s largest conservation organization working globally to conserve the lands and waters on which all life depends. Since 1951, TNC has protected more than 120 million acres of land and thousands of miles of rivers and works in all 50 states and more than 76 countries and territories. This foundation of success was built on the same principles that drive our vision today: utilizing the best available science and driving collaboration and innovation with strong partners by our side. We’re deploying innovative solutions that maximize nature’s ability to fight climate change while bolstering resilience for our most precious ecosystems and vulnerable communities.

Do you plan to budget for commercial solar in 2023? Solar energy has become one of the most affordable types of energy for businesses in 2023.

Kokosing Solar offers customized commercial solar solutions for businesses, municipalities, schools, project developers, non-profits, and more.

As we reflect on our operating budgets over the past year and look to make improvements, we urge business owners, building operators, operations directors, and facility managers to consider solar energy as a strategy in the new year. Hosting an onsite solar energy system can help your company lower operating costs, reach corporate sustainability goals, recruit mission-driven team members and maximize your energy economics.

In this blog, we’ll cover the benefits available to commercial entities when they build solar into their new year budget.

Incentives available to help commercial entities budget for solar include:

• Solar Federal Investment Tax Credit (ITC)
• Net metering
• Federal bonus depreciation
• REAP Grants (for rural business and agriculture)

Federal tax credits for solar

In 2022 the federal government extended the federal solar investment tax credit (ITC) for ten years. The ITC gives businesses a dollar-for-dollar reduction on corporate taxes for the amount they paid for their solar P.V. installation.

Historically, the ITC could offset up to 30% of the cost of the system. The ruling in 2022 that extended the tax credit also made way for additional deductions and benefits available to businesses and now non-profits and government entities.

These additional deducts can be added, for example, if the installer uses domestic content or if your business is located in a designated “low-income community” or “energy community”. If you’re interested in learning more for yourself, check out this blog post or sign up to receive a recorded webinar we did explaining all of the new tax benefits of the ITC for projects under 1 M.W. and projects above 1 M.W.

Don’t feel like you have to understand all of this information yourself. You’re an expert in your industry, and we’re an expert in ours.

We have been successfully helping commercial entities understand rules like these for the past 20-plus years. Our expert commercial solar consultants can help you understand these rules, what you’re eligible for and how to take advantage of the incentives available to you.

Net Metering Maximizes your Solar Benefits

Get more out of your solar system through net metering. Net metering is a policy that allows solar energy produced by your system to flow through to the grid when you make more energy than you consume.

Energy sent back into the grid will flow immediately to power the loads of nearby buildings and facilities. The State of Ohio requires the utility company to credit you for the energy your system has sent along to the grid. These credits appear on your monthly electric bill.

We design all our systems to maximize net metering rules. During sunny summer months, your system will produce more energy than you consume, allowing you to bank up credits. During the winter months, your facility will use more energy than it makes, and you will use up the credits you’ve earned.

With solar, you get charged for the energy you use from the traditional electric grid when your solar panels aren’t producing. And, when you have a solar system, you pay for that energy using the credits you built up during times your solar system is producing more energy than you are using.

Know that net-metering rules change from state to state and even vary by utility company and energy supplier. This description of net metering applies to the net-metering rules in the State of Ohio. Some states may be similar, but we always recommend finding local information because solar rules and regulations vary widely. Also, working with an installer familiar with your utility’s rules and regulations will ensure you get the most accurate economic modeling during the solar design phase.

Decrease Your Taxes further with Federal Bonus Depreciation

Most businesses include depreciation in their tax filings. Depreciation is considered an expense to the company, and it lowers the profits and reportable taxed income.

Businesses can depreciate the entire cost of the solar system in year one instead of spreading that depreciation over many years. This upfront benefit significantly impacts the return on the solar investment.

You May Be Eligible for a REAP Grant

The USDA REAP Grant is one extra incentive available to agricultural producers and rural businesses. The grant can cover up to 25% of the total cost of your solar installation.

The USDA REAP Grant provides funding to rural small businesses and agricultural producers. You can use the money to implement renewable energy systems or improve energy efficiency if you qualify. The USDA instituted the program to increase energy independence in the U.S. and decrease the energy needs for rural agricultural producers and businesses, all while generating more onsite, clean energy.

Like the investment tax credit, there are quite a few rules to pay attention to when evaluating a REAP grant for your onsite solar P.V. system at your farm or business. We have lots of experience and know quite a few grant writers who specialize in this program.

When you start evaluating solar for your onsite energy needs, we will work with you to determine eligibility, timeline, and next steps for submitting the grant for your solar energy project.

Budgeting for Solar

Evaluate how you structure your solar purchase. There are a few different ways to pay for your solar energy system for commercial entities. Two of the most common methods are direct purchase and a power purchase agreement (PPA).

A PPA is an excellent option if a capital investment like solar doesn’t fit into your annual budget. In the case of a solar PPA, a solar developer pays for the system upfront in exchange for an agreement from your organization that you will purchase the power from the system for a defined amount of time. Usually, after a certain amount of time, the agreement is structured so that you may extend it, remove the system or purchase the solar installation. Usually, the rate you pay is less than the rate you are currently paying for electricity, and/or the rate is fixed, allowing you to calculate fixed energy costs for the next 20-25 years.

If you choose to purchase the solar energy system outright through a direct purchase, you are the sole owner of the system. One of the main benefits of buying the system outright is that you can take advantage of all the incentives outlined above.

Evaluate your circumstances to choose the route that makes the most sense for you. As you may have guessed, through a PPA, the company hosting the solar energy system cannot take advantage of the tax benefits of the system. In fact, the third-party developer makes use of those benefits. However, if you go solar through a PPA, you may see savings on day one if you pay less per kWh than your current electricity supplier. This route can help companies keep cash on hand and lower operating expenses from the outset.

Rising Electricity Costs and Margins

2022 saw electricity costs spike across the U.S., and locally, we felt it. Beyond sustainability, solar offers market stability during a time of increasing inflation. Fixing operating costs is an actionable step you can take to lock in your energy rates for years to come.

Find out how today’s solar economics impact your bottom line. We look forward to discussing solar with you and how it might fit your situation.

We’ve been thinking a lot about Inflation, Economic Uncertainty, and Solar.

It’s been a challenging year. There is a war in Ukraine, inflation in the headlines, and “economic uncertainty.” As we wait for the analysts to officially call it a recession or not, we discuss the price of eggs, gas, and milk and we worry about the future. If you remember your lessons from science class, we are wired with instincts to “fight, flight or freeze,” and that’s what many of us are doing, especially regarding investments and spending. While that ‘freeze” instinct may be helpful when considering if the time is right for a big vacation or replacing a “good enough” vehicle with a shiny new one, it works against us in this inflationary period.

We install a lot of solar for a wide variety of clients, and over the last 23 years, we have always asked our solar clients “why” they are going solar. This year we are seeing an interesting trend. While many of the answers still include “the environment,” there is a significant uptick in clients treating solar “as an investment.” Digging deeper, these homeowners are looking at inflation and know that keeping money in the bank means watching it lose value over time. They also are anxious about stock market volatility after a year like 2022, when the S+P lost almost 20% of its value. Their solution? Investing in their home with solar as a hedge against inflation.

Learning From The Past

Imagine if you could go back in time and buy 30 years worth of gasoline for $1.11 per gallon in 1993.

While that would be a lot of barrels stacked up in the backyard, going solar is a much simpler way to “pre-purchase” a decade’s worth of electricity.

Our customers that own their solar power plants own their future – no matter how fast or how high electricity rates increase.

If they have or eventually buy an EV, they will also be insulated from ever-rising gasoline costs. These customers did the research, called Kokosing Solar, and made the jump from “freeze” to “fight”, taking action against inflation and market uncertainty by investing in their homes. On top of all this, the “return” from a solar investment is TAX FREE because it saves money that would have been spent rather than earning taxable interest.

Many of our customers are not sure how long they will be in their homes… more space is needed for growing families, empty nesters downsize… people move. Will they see the same return? These are important considerations, and while each situation is different, our customers that go solar are often considering the impact of a zero or very low electric bill on their home selling process. According to a nationwide Zillow survey of homes that went solar, going solar adds 4.1% to your home value. It only makes sense that home buyers recognize that electric utility bills are important considerations when choosing a home, and a home that includes a high-quality solar installation can demand a premium price.

Taking Action This Year

While the future is uncertain, one thing that is certain is the sun will always rise.

We all have a lot going on right now and it is understandable to hit the “pause” button on major decisions.

In these conditions our “fight-flight-freeze” instincts are activated and amplified. While many are stuck in a “freeze” mode, letting their savings be eroded by inflation, others decide to “fight”, taking action where they can. For some, going solar is a great way to continue investing for the future, and lock in savings now. Give us a call and let our 20+ years of experience show you how we can help you invest in and save for the future. We will provide a detailed report, answer all your questions and do all we can to help you take control of your energy and own your future.

Third Sun Kokosing Solar Adopts New Name: Kokosing Solar

Kokosing Solar’s New Name, Logo, and Brand Reflect Solar Industry Growth

___________

In April 2022, Kokosing Industrial, Inc. purchased the assets of solar installer Third Sun Solar. During the past year, the company operated as “Third Sun Kokosing Solar”; moving forward, the company will do business under the brand name “Kokosing Solar”.

Kokosing Solar’s Director of Solar Operations Brady Phillips noted that as the Solar and Battery Energy Storage System (BESS) industry is poised for tremendous growth in the coming decade, and the company’s scope will grow to include utility-scale in addition to the residential and commercial/industrial projects historically built by the company. “The brand transition aligns us clearly with the larger Kokosing group of companies, whose reputation for self-performing quality projects is well established across the Midwest and Mid-Atlantic,” Phillips said. “Kokosing Solar is an extension of the Kokosing Industrial business and will provide renewable energy projects with the same commitment to safety, quality, and customer focus that is a staple of Kokosing’s other work.”

“Our new name and logo reflect the great work our team has achieved over the past year as we have integrated our historic solar expertise with the proven processes and resources of the Kokosing family of companies,” said Geoff Greenfield, co-founder of Third Sun Solar. “As we focus on our updated mission to “Put People to Work to Build the Clean Energy Future,” it only makes sense to lead with the strong, well-known brand “Kokosing”.

Kokosing President and co-CEO Brett Burgett said that entering this growing sector is an exciting new chapter for his family’s 72-year-old construction company: “Kokosing has a long history of diversification, and after watching solar move from the early adopters to the mainstream, we have added it to the services our company offers. We have a proven track record of building conventional energy generation projects, and building clean energy projects is a natural progression for us.”

Kokosing Solar specializes in the following:

• Evaluation of siting and suitability of solar and BESS opportunities
• Cost and energy modeling, economic analysis

• Project development and finance
• NABCEP-accredited engineering and design services
• Equipment selection and procurement, access to the pooled purchasing power of the AMICUS Solar Cooperative
• Project management, comprehensive regulatory compliance and industry leading safety programs
• Self-performing installation work with highly trained and skilled workforce

• Comprehensive Service, Operations & Maintenance offerings, membership in the AMICUS O+M Cooperative

ABOUT KOKOSING

Headquartered in Westerville, Ohio, Kokosing is one of the largest family-owned construction companies in the Midwest and Mid-Atlantic. Kokosing’s primary business lines include solar, industrial manufacturing, transportation, pipelines, water/wastewater, and marine work. Additionally, Kokosing owns construction material supply companies. Known for unwavering integrity and exceptional safety and quality, Kokosing’s companies provide extensive resources for its customers.

ABOUT KOKOSING SOLAR

Our team has been designing, building, and financing solar energy projects since 2000. Over the past two decades, we have worked with hundreds of clients to achieve their economic and sustainability goals. Kokosing Solar is a self-performing EPC that offers our customers the accessibility and competitiveness of a local firm with the stability, reputation, and resources of one of the largest construction companies in the eastern US.

Solar Energy and Levelized Costs. You’re Overpaying for Electricity if you aren’t using Solar Power.

Here’s a cost breakdown from one of our recent customers…

• Utility Power Over 30 Years: $38,500
• Solar Power over 30 Years: $16,240

What if you could purchase your energy in bulk for the next 30 years… at the low rate of 5-7 cents per kilowatt hour… would you do it? Your neighbors are…

The Argument for Solar

Every day you use energy. Depending on the mix of your local electric supplier, as a homeowner in Ohio, most of your utility energy supply comes from legacy energy like natural gas and coal. While natural gas was branded as cheap energy in recent years, that cost is ticking upward.

The Cost of Utility Power varies and can range from about $0.13 – $0.18 per kilowatt-hour. That cost has risen annually by 3 – 6%, and due to global conditions, we know the escalation will only continue to increase. Solar power comes in at roughly $0.05 – $0.07 per kWh over the lifetime of the system. As you can see, you could be getting your energy at a lower rate when you switch to solar power.

Financing has made solar accessible to even more homeowners in recent years, and we proudly offer $0 Down Financing.

Solar is an investment unlike any other because it has a guaranteed return. First, you’re guaranteed to pay monthly for electricity. Second, the systems are warrantied for 25 years, often lasting well beyond that. On average, our homeowners see a 10% annual return. While this number is close to stock market returns over the past ten years, it’s a guaranteed return and levelized risk factor in your investment. Solar is certain, whereas pandemics, geopolitical instability, inflation, and so on can increase market volatility and make the market even less reliable.

Gain more control over future expenses by fixing your rate, all while you increase the value of your home. Purchasing brown energy from your utility is a 100% guarantee of no return on investment. When you go solar, you increase your home value by 4%.

When we look into the future, we know that legacy brown electricity will only become more costly to consumers due to supply shortages, grid upgrades, and natural disasters. Going solar today is the best way to hedge against the rising cost of electricity.

Why do homeowners go solar?

Usually, our customers go solar for one (and sometimes two) of two reasons: to go green and to save money.

One of the first questions we hear from folks just starting their solar journey is: “Will solar really save me money?”

While the answer is yes, understanding how is essential.

This article will help you understand the financial calculations better to determine if solar makes sense for your home and family.

Solar Panel Cost – Is It Worth It?

Solar is unlike any other investment in your home. The home improvements you make – adding a deck, installing a hot tub, getting new gutters. They don’t have a guaranteed return on investment. But solar does.

Below are the key considerations you’ll want to start with when evaluating if solar is a good investment opportunity for you.

Key considerations:

1. The cost of a solar energy system
2. The amount you would otherwise pay for electricity over 30 years
3. The amount that energy costs will escalate over 30 years
4. How long will the system take to pay for itself

After figuring out these values, you’ll have a better idea of the investment, the return on investment (ROI), and the number of years it will take to see your ROI.

Zero Down Solar Loans

Solar companies in Ohio increasingly provide Zero Down Solar Loans. Just about any solar installer in Ohio who you talk to will have a financing option.

In recent years, zero-down loans have opened doors for homeowners who have wanted to go solar but haven’t had the upfront capital to make the investment.

All installers offer different loans, and it’s important to think critically about the loan you’re being offered.

Often people are interested in getting a loan for a solar system where the monthly loan payment is less than what they’re currently paying for electricity. In Ohio, solar is a long-term investment. It’s not a quick payback or for someone looking to save money on their monthly utility bills.

Also, a low monthly payment doesn’t automatically mean a better deal if you’re paying more for your solar system in the long run. For low-interest loans, sometimes the installer will pay a finance company for better loan rates but bake the finance fees into the cost of your solar system, inflating the price of the solar system itself.

Tax Credits

The main incentive for solar energy installation is the Solar Investment Tax Credit. If you owe federal taxes, this is a great incentive that allows you to take 30% of the cost of the system (including batteries!) against the federal taxes you owe.

If you don’t pay that much in taxes, you can take the tax credit over multiple years.

Factor the solar investment tax credit into your equation if you qualify to take it.

Read more about the Solar Investment Tax Credit here.

Home Value

According to a recent Zillow study, you increase your home’s value by 4% when you go solar.

For a median-value home in the US, this is a value of approximately $9,000, according to Zillow.

Why do homes with solar sell for more? Homes that come with a solar energy system can provide sizeable future energy cost savings for homebuyers. As energy prices go up and energy consumption increases in a home (say, with a growing family), buyers understand the value.

Additionally, homebuyers are increasingly energy conscious – for environmental and financial reasons alike.

How Much Will You Save?

This is a tricky calculation as it takes into account everything we’ve considered above and more…

The rate you’re paying for electricity now is different from the rate you’ll be paying for electricity 20 years down the line. In Ohio, we’ve historically seen an increase in electricity rates of 3% per year, but some years are different. In 2022 Ohio saw an increase of nearly 8%. Year over year, these increases add up, so energy rate escalation is important to consider when evaluating solar for your home.

Doing The Math

All homeowners who go solar will eventually see a benefit from their solar installation. What surprises some people is the amount of time it can take to get there. In Ohio, solar is a long-term investment. It’s not a good fit for someone looking to save money immediately on their monthly utility bills.

If you can wait to see your system pay back, your rewards will be reaped in owning your own power generator at your home and making your own power as the homes around you continue to rent their power from the utility company.

You can either do the math for yourself or work with our solar professionals to better understand the numbers.

Our Solar Consultants have been working for years to help homeowners make sense of these equations.

Unlike some other companies out there in the marketplace, we take a consultative approach. We work with you to understand your goals and your budget and determine the best solar solution to fit your needs. Sometimes installing solar makes sense for homeowners, and sometimes, it does not. We will take the time to tell you if solar doesn’t make sense for you.

Visit our FAQ page for answers to more common questions about solar installation.

If you’re interested in getting a free consultation, fill out the form below to get started down the road toward a long-term investment in your home.

How has the solar industry grown since the Solar Investment Tax Credit (ITC) was first instated?

Dating back to 2006, the ITC or Federal Investment Tax Credit (Section 48 of the tax code) is a tax credit that can be claimed on federal taxes owed for up to 30% of the cost of a solar system.

The ITC was designed for -and delivered – to drive down costs and increase adoption.

• Since the ITC was enacted in 2006, the U.S. solar industry has grown by more than 200 times
• The cost to install solar has dropped by more than 60% over the last decade
• Average annual growth of over 50% over the last decade alone

Until the Inflation Reduction Act (IRA) was signed in August 2022, the existing ITC had the following structure and stepdown:

• 30% for projects started or completed EOY 2021
• 26% through EOY 2022
• 22% through EOY 2023
• Sunset at 10% for 2024 and beyond for commercial only

Since its creation, Congress has provided numerous extensions, though only for short 5-year periods. The problem with these short-term extensions? They do not provide the long-term view and stability that organizations need to plan. The IRA addresses this.

Most of our electric generation is from fossil fuels, and that price fluctuates based on global markets. Fuel from solar energy is free once the system is installed, providing long-term stability and lowering electric prices.

Implementing onsite solar can help you take control of your energy costs by fixing a certain percentage of your electric rate for the long haul.

Big Picture Benefits for Solar in the Inflation Reduction Act

Interconnection added to Base

Historically developers incurred many costs on the front end when developing a solar project. The ITC takes care of this by allowing these expenses to be included.

Immediate impact

Projects built in 2022 are eligible for the 30%. This includes projects closed or constructed in 2022, increasing from previous 26%.

Long Term Planning

30% for 2023 through 2033. This allows for long-term planning and certainty. Keep in mind that there are planning requirements that can take a significant amount of time to complete. We encourage you to begin planning now.

Projects Under 1 Megawatt (MW)

Some new additions…

• 10% Bonus for Domestic Content
• 10% Bonus for Siting in Energy Community

Adders for Projects Under 1MW AC*

• 10% for low-income communities
• 20% for low-income residential housing

*(competitively allocated and have caps)

If your project was eligible for the 30% ITC, you’re now looking at 40% or 50% tax credits with these additions.

Projects Above 1 Megawatt (MW)

• 6% Base ITC
• 2% Bonus for Domestic Content
• 2% for Siting in Energy Community
• * 10% for low-income communities (Projects under 5MW AC)
• * 20% for low-income residential housing (Projects under 5MW AC)

*(competitively allocated and have caps.)

Adders

Where the rubber meets the road…

+ 24% Base ITC for projects that meet labor requirements (prevailing wage rates, apprenticeship program)

The bill was intended to make sure that there are good-paying green jobs, and these adders intend to incentivize this. While providing good paying jobs to our communities is central to our mission, Kokosing (link to Kokosing energy site) is the right partner as, right out of the gate, we have the eligibility to meet these requirements.

+ 10% Bonus for Domestic Content

Guidance is still forthcoming in this department.

What we are hearing so far is that to qualify for this adder, all steel must be 100% US Steel (usually part of the solar racking), and 40% of all the additional equipment (like modules, inverters…) must include content from US sources.

Solar manufacturing is a complex process. From the solar silicone that gets refined into wafers to the assembly of the solar modules using aluminum and glass. These materials are typically supplied from all over the world. There are a few select module manufacturers who assemble solar panels in the United States. We are still waiting to hear if they will qualify to meet the rules set forth in this adder.

We expect that our equipment suppliers don’t currently meet the requirements for this adder. However, we know that our partners are setting in place a roadmap to begin to meet these goals. Getting our customers to that extra 10% is important to us and to them.

+ 10% Bonus for Siting in Energy Community

To qualify for this adder…

• The project could be located on a certified Brownfield (former remediated industrial site, capped landfill…).
• Census tracts, plus their adjacent census tracts, where a coal mine closed after 1999 or a coal-fired power plant was retired after 2009.
• As determined by the Secretary, (1) a metropolitan or non-metropolitan statistical area with unemployment rates, from the previous year, at or above the national average and (2) at least 0.17% of employment or 25% of local tax revenues are related to the extraction, processing, transport, or storage of coal, oil, or natural gas at any time beginning in 2010.

+ 10%, 20% (or 30%) Low Income Community Adder

• Competitive – Apply to Treasury. We are not yet sure if this is a merit based application or a first come first served application and are still waiting on guidance.
• 1.8 GW allocated per year.
• 5 MW AC cap per project.
• + 10% Adder if located in a low-income Community or on Native American Indian Land (specific definitions are available).
• + 20% Adder if the project is part of a qualified low-income residential building project or a qualified low-income economic benefit project (specific definitions are available).

We will be happy to work with you to understand what percentage tax credit you would qualify for.

Direct Pay Provision

Historically, the only entities that could benefit from these tax benefits were entities with a tax appetite: for profit institutions and businesses. Non-profits, state and local municipalities, rural electric co-ops, and Indian Tribal governments could not take advantage of the benefits.

The IRA takes care of that. These entities, who don’t traditionally pay taxes, could get this tax credit paid to them directly. Likely the payment would be after the project is built.

Like all other organizations, a non-tax-paying organization is only eligible for the percentage back in the categories where you meet the requirements listed. Additionally, we have seen guidance that tax-exempt bond financing could see a reduction in the percentage available.

Stay Tuned

More details will be available in the months ahead as rules and guidance become available. Check out our FAQ page for additional coverage of the solar tax benefits included in the IRA.

We plan to keep our audience up to date with the latest information as it becomes available.

The best way to stay in touch? Start by signing up for a free solar evaluation. Fill out the form below to get started developing your project today.

Consider greening your home before you go solar for maximum savings! The average American spends $2,000 annually on energy expenses. Some of that expense goes to waste because of leaky faucets, air drafts, and outdated heating and cooling appliances. You can reduce these losses through energy efficiency upgrades.

If you plan to go solar eventually, there is an added benefit in completing energy efficiency upgrades before going solar.

When you reduce your electric consumption in your home, you reduce the amount of electricity your solar panels must generate to match your household usage.

Remember – every home is different. The suggestions, cost estimates, and impact estimates provided in this post are general. But they should get you started thinking about energy efficiency upgrades to make before you go solar.

In this greening your home before you go solar guide, you will find information about:

1. Hot Water Heater Blankets
2. Hot Water Temperature Cards
3. LED Lightbulbs
4. SMART Thermostats
5. Attic Insulation
6. Attic Staircase Covers
7. Energy Efficient Power Strips
8. Low Flow Faucet Aerators

Hot Water Temperature Card

• Cost: $5 – $10
• Impact: Lowering a hot water heater 10 degrees saves 3-5% in energy costs annually

A Hot Water Temperature Card is an educational device designed to inform you if your water tank’s temperature is set higher than necessary.

If your water heater’s temperature is set higher than is appropriate, the opportunity exists to reduce energy costs by lowering the temperature. If the temperature is higher than 120°F, the water heater is set too high.

A bonus of a hot water temperature card? Keeping your hot water in a lower range can prevent tap water scalding.

LED Lightbulbs

• Cost: ~ $20
• Impact: Changing out 5 of your most frequently used bulbs for LEDs could save you up to $75 annually

You’ve probably heard from your utility company that you need to make the switch to LED lightbulbs. They’ve been a hot topic for several years, with good reason.

Get this: LED bulbs use about 75%–80% less energy than traditional bulbs.

Additionally, LED bulbs have a longer life expectancy than most other lighting, saving you energy and lasting longer.

SMART Thermostat

• Cost: $50 – $200
• Impact: You can save as much as 10% a year on heating and cooling by simply turning your thermostat back 7°-10°F for 8 hours a day from its typical setting

SMART Thermostats take the work out of the equation for you – ensuring that the thermostat gets changed. Like clockwork, a SMART thermostat turns the heat or AC down when you leave — depending on the season.

Although you can adjust thermostats manually, SMART thermostats will avoid any discomfort by returning temperatures to normal before you wake or return home.

The lower the interior temperature, the slower the heat loss. So, the longer your house remains at the lower temperature, the more energy you save because your home has lost less energy than it would have at the higher temperature.

The same concept applies to raising your thermostat setting in the summer — a higher interior temperature will slow the flow of heat into your house, saving energy on air conditioning.

Attic Insulation

• Cost: $1 – $1.50 per square foot, $1,000 – $1,500 total for an average home
• Impact: The “EPA estimates that homeowners can save an average of 15% on heating and cooling costs (or an average of 11% on total energy costs) by air sealing their homes and adding insulation in attics, floors over crawl spaces, and accessible basement rim joists.” According to Energy Star

Resources:

• Methodology for Estimated Energy Savings from Cost-Effective Air Sealing and Insulating
• How Much Does Blown-in Insulation Cost?
• Read This Before You Insulate Your Attic
• Where to Insulate in a Home
• Green Living: Spray foam insulation keeps homes warmer, but beware of these common problems

Attic staircase cover

• Cost: $100 – $150
• In many homes, leaky attic access stairs provide an opportunity to improve comfort and save energy and money.

You can seal and insulate the attic stairs opening by building your insulated cover box or purchasing a kit or pre-built package.

Approach the attic stairs access as you would an opening to the outdoors. Regardless of the type of insulation you use for your attic access, it is important to thoroughly air seal the gap.

Energy Efficient Power Strips

• Cost: $20 – $50 per unit
• Impact: up to $200 for an average home

The purpose of energy-efficient power strips is to reduce phantom loads.

Phantom loads continue to consume energy even when your devices are not in use.

For instance, your TV, computer, and cable box all use energy even when they’re turned off.

Smart power strips actually cut the power off and save energy since they can detect when a device is in off mode.

Low Flow Faucet Aerators & Shower Heads

• Cost: $5 – $40
• Impact: A 1.0-gallon per minute aerator can save more than 50 percent of the water you use. You can save anywhere from 2 to 16 gallons of water per day based on your average daily water use and the aerator you choose to install

The easiest way to begin saving water is to change the faucet aerator on your kitchen and bathroom faucets and showerheads to a water-saving low-flow faucet aerator.

A water aerator is a disc-shaped screen placed at the end of the faucet that is removable by turning on or off the threaded end of the spout. It’s designed to break up the water flowing through the faucet into several small streams while introducing air into the water flow.

This process saves water with no noticeable reduction in water pressure. Saving water saves money, especially on the energy you use to heat it.

Greening Your Home Before You Go Solar…

These steps can get you on the right path to reducing your annual electricity consumption. And, when it’s time for you to go solar, you’ll be even more self-sufficient.

We know that investments in energy efficiency will pay off in the long run.

Reach out when you’re ready to learn more about installing a solar energy system at your home.

References

• DIY Energy Saving Projects
• Lighting Choices to Save You Money
• Replacing Lightbulbs
• Thermostats, energy saver
• Savings Project Attic Stair Cover Box
• Your Household Smart Power Strip
• Reduce Hot Water Use Energy Savings