Solar Panels in Ohio: Homeowner’s Guide to Going Solar

All across Ohio, people are reaping the benefits of solar. The Buckeye State installed the 6th most solar of any state in 2023 and now has enough to power more than 400,000 homes.

When solar panels go on homes, they can help homeowners avoid buying utility power and reduce their bills. In states like Ohio that have some form of net metering, even the electricity that they send back to the grid goes to reducing home electricity bills.

Solar panels may not make sense for every person or every home, but Ohio has many of the factors that can make solar a winning proposition.

Does Solar Make Sense in Ohio?

Given just how much solar has already been installed in Ohio, the short answer is yes. But whether or not it makes sense for you depends on the specifics of your own situation. Statewide factors can help you understand how solar might work for you, but you can get a clear idea by getting a quote from a solar installer.

Price of electricity

Ohio’s statewide average rate for residential electricity was 15.38 cents per kilowatt-hour in 2023, according to the US Energy Information Administration, close to the national average at that time of 16 cents/kWh.

Ohio’s deregulated energy market means that you may have chosen an electricity supplier separate from your utility. That means you may have been able to find a cheaper supplier, but it also means the statewide average may be less representative of your specific situation.

In general, the more you pay for electricity, the more you stand to save by switching to solar.

Price of solar

Solar only makes sense if it’s available at an accessible price that doesn’t negate the value of any savings it provides. Solar pricing can vary from project to project for a variety of reasons, but one thing is certain: Solar prices are trending down. In the last decade, prices have fallen by 30% according to some estimates and, after a brief supply-chain and inflation related bump, are falling farther.
The national average price for residential solar is $3.24 per watt of installed capacity, according to the Solar Energy Industries Association. (For a five kilowatt system, that’s a total cost of $16,200 before incentives.)

Credit: Solar Energy Industries Association

The actual cost of solar at your home will depend on a variety of factors like the size of the installation (larger systems typically cost more overall, but are cheaper per watt), the complexity of your roof, the local cost of labor and permitting, and what equipment actually makes up your system.

Available sunlight

Ohio gets an average of a little more than four peak sun hours per day, according to the National Renewable Energy Laboratory. That’s less than sunshine powerhouses in the south of the state, like Arizona or Texas, but more than other states with more solar installed.

More important than the statewide average peak sun hours is the sunlight that reaches your roof. While solar panels have gotten better over the years at dealing with shading and soiling, if your house is heavily shaded by trees or buildings, solar may not be a good fit for you.

Outages

There were close to seven hours of power outages for every utility customer in Ohio last year, according to the US Energy Information Administration. (Some customers may have experienced more, others none at all.)

As power outages from extreme weather increase across the country, electricity reliability will likely become more important to some. Solar paired with a battery can keep your home’s essential devices powered up in an outage, whether for convenience or safety.

Solar Incentives in Ohio

Solar incentives have been hugely important during residential solar’s rise in popularity. They represent a key way to lower cost and boost savings.

Federal tax credit

The federal solar tax credit is set in place for nearly a decade, thanks to the Inflation Reduction Act of 2022. Properly known as the Residential Clean Energy Credit, it allows the owners of residential solar systems to reduce the amount of taxes they owe by 30% of the system’s cost. For example, a homeowner who installs solar at their primary residence or a cost of $23,000, should be able to claim a tax credit worth $6,900. There’s no dollar limit to the credit.

The credit is broadly available, but there are some restrictions. You must own the panels (leasing doesn’t qualify) and they must be on a house you live in and don’t rent. (You may be able to claim the credit for solar panels on a second house, if you don’t rent it.)

You also need to have a tax liability to take advantage of the credit. If your credit is larger than the taxes you owe, you can roll it over to future years, but you have to apply it to your taxes.

Be sure to consult your own tax advisor about the specifics of your situation.

Net metering

Net metering has become a blanket term for the ways utilities compensate you for the electricity your solar panels generate, but you don’t use. Unless you have a battery to store the excess, your solar panels are likely to send electricity back to the grid. Under true 1-to-1 net metering, every kilowatt-hour you sent to the grid would cover one that you consumed. You would carry any excess credits over to future months.

Ohio’s flavor of net metering, called monthly net metering, is like 1-to-1 net metering except credits carry forward to future months at a lower rate (the utility’s standard service offer, also known as the price to compare). Ohio’s investor owned utilities follow this scheme, while municipal and cooperative utilities can set different rules.

If you get your electricity from a supplier other than your utility and your utility is one that offers net metering, you may want to switch back when going solar, since competitive suppliers aren’t required to offer net metering credits. By sticking with your utility, you can take full advantage of the net metering benefits available to you.

Solar Renewable Energy Certificates

Each time a solar installation generates one megawatt-hour of electricity, it can also generate a solar renewable energy certificate, or SREC. SRECs, and non-solar-specific RECs, represent the benefits of solar energy or renewable energy, and utilities and other entities can buy them to meet renewable energy goals.

SRECs and RECs are sold on marketplaces, and prices can vary. Ohio’s market is oversupplied, but Ohioans can sell their SRECs as RECs in Pennsylvania (Tier 1 RECs, to be specific), typically through a trading platform.

Solar Payback Period in Ohio

A solar payback period is the time it takes for the savings from going solar to match the costs of going solar. Like the cost of solar, payback periods vary from state to state and project to project. Estimates vary, but generally cluster around 10 years. Your actual payback period will depend on the specifics of your project, your energy consumption, the local cost of electricity, and how that changes over time. Here’s how to calculate a payback period.

Take your total cost and subtract any incentives that lower it. Divide your answer by your annual savings to get your payback period in years.

(Total cost - Incentives) / Annual savings = Payback period

Let’s say you purchase a five kilowatt solar panel system for $16,200 ($3.24 per watt x 5,000 watts). You can claim the federal tax credit and reduce your overall cost by $4,860. Your solar system delivers $100 in savings each month, or $1,200 each year. Your solar payback period would be 9.45 years.

($16,200 - $4,860) / $12,000 per year = 9.45 years

Payback period calculations are really just estimates and could change for a number of reasons. Your savings might fluctuate year-to-year with non-typical weather, for example. It’s likely that the price of electricity will increase, too. While 2023’s average residential retail rate for electricity in Ohio was 15.38 cents per kilowatt-hour, 10 years before in 2013 it was 12.01 cents per kWh, an increase of 28%. As electricity gets more expensive, solar stands to save you more.

Credit: US EIA

Ohio Utilities and Rooftop Solar Panels

When you go solar, your utility plays a part. Besides having a role in setting the rate you pay for electricity, your utility might have other policies for their customers who go solar. Your utility is involved in the installation process, giving your solar panels their final permission to operate, or PTO.

Price to compare shows the price current on October 25,2024. Average electricity rate taken from US EIA data.

The above information might not be an exact match to your experience and a utility’s offering may have changed since it was last updated. While a company’s average electric rate might be one thing, if you’re on a time-of-use plan, you might pay more than average during parts of the day and less than average during others.
If you use natural gas at home, maybe from Columbia Gas of Ohio, Duke Energy Gas Ohio, or Enbridge Gas Ohio, you’re likely the customer of two utilities. Home electrification can whittle that down to one. By swapping out your gas appliances for electric ones, you can run your home on cleaner energy, and remove potentially harmful gases from your home.

Leasing Solar Panels in Ohio

Purchasing solar with cash or a loan isn’t the only way to go solar. Third party ownership, in which you don’t own the panels on your roof, but lease them or buy the power from them, is an increasingly popular option. Under the most familiar of these options, a solar lease, you pay a set monthly fee for the solar system (kind of like leasing a car). Power purchase agreements (PPAs) are similar, but instead of paying for the equipment, you pay for the power it generates.

With third party ownership, since you don’t own the panels, it’s the leasing company that typically handles maintenance and repair. At the end of a lease or PPA, the company that owns the panels should come and remove them. Some agreements will give you the opportunity to buy them at the fair market price at the end of or even throughout your lease (like you can with Palmetto’s third party ownership option, LightReach).

Since third party ownership does away with the upfront cost of purchasing solar panels, you might be able to save money more quickly. You save with a lease (or PPA) when your utility bills are reduced by more than your ongoing lease payments. Both agreements typically include an escalator, which increases your payments yearly. If electricity rates increase faster than your lease payments, you could save more money as time goes on.

While purchasing solar costs more upfront, you can often save more money over the lifetime of the system. Once you reach your solar payback period, a purchased system delivers more savings than the ongoing payments of a lease. Whether leasing, buying, or skipping solar panels is the best move for you depends on your circumstances. Consider each option carefully before you move forward.

Solar Panel Maintenance in Ohio

Once solar panels are on your roof, they’re typically low maintenance, though issues from faulty to dirty equipment do pop up. Like with some other solar companies, you can protect your solar investment with Palmetto via Palmetto Protect. Different levels of Palmetto Protect offer proactive monitoring and service alerts, insight into your electricity production, and even a production guarantee.

Snow

Parts of Ohio aren’t strangers to snow. The good news is that snow on solar panels typically melts faster than the snow on surrounding areas. That means minimal interruptions to your electricity generation from light snow.

For heavier snowfall (from Lake Erie’s lake effect, for example), you might want to gently clear the snow from your panels. You should always make sure you’re personally safe and never use a tool that could scratch your panels.

Finding the Best Solar Company in Ohio

Finding a reputable company that has your interest in mind is probably your most important job when going solar. But finding the right company can feel easier said than done. Here’s how you can approach it.

• Read positive and negative reviews of the company, keeping in mind that your experience probably won’t exactly match the reviewers
• Educate yourself on incentives and local policies, like net metering, so you can spot unlikely promises in a sales pitch
• Talk to your friends and neighbors their experience going solar
• Find a company who will answer your questions and give you time to make decisions on your terms

Palmetto Reviews

“This was a good choice for us. Everything was explained in advance. Installation happened on time. Palmetto responds quickly when we have questions. We are enjoying the savings every month.” Linda P. 10/9/2024 Google Review

“Excellent work and the best thing, apart from the generation of electricity, is the generation of savings that Palmeto gives us.” Nelson D. 10/5/2024 Google Review

“I chose Palmetto because it is a well established company, with years of service.

I would recommend this company to anyone interested in solar panels.” Sherry S. 10/7/2024 Google Review

Frequently Asked Questions

Are solar panels worth it in Ohio?

Solar panels can certainly be worth it in Ohio. Much of the state has favorable net billing policies in place that earn you bill credits for the energy you send back to the grid. Paired with an SREC market where solar panel owners can earn a bit more money from the electricity their panels generate, solar panels make financial sense for many Ohioans. Reach out for an estimate to see if you’re one of them.

Does solar increase your home value in Ohio?

Adding solar panels typically increases a house’s property value.

How much does it cost to go solar in Ohio?

According to one national estimate, the cost of going solar is about $3.25 per watt. That price will vary by state and by project. The local cost of labor and permitting, the size of the system, whether or not there’s a battery attached, and the complexity of a roof can all push the cost higher or lower.

Does Ohio have net metering?

Ohio’s biggest utilities offer what’s called monthly net metering. When you have solar, you still avoid buying electricity at the retail rate and credits applied to your bill in the month they’re generated are worth the retail rate, but any credits you roll over to future months are valued at your bill at your utility’s price to compare.

Disclaimer: This content is for educational purposes only. Palmetto does not provide tax, legal, or accounting advice. Please consult your own tax, legal, and accounting advisors.

Sobre el AutorAndrew BlokWriter and Editor

Andrew has worked as a journalist and writer for four years, over half of those dedicated to covering solar. He currently lives in Tucson, AZ, where you might run into him walking his dog and birding while dodging the heat. He has degrees in English education and journalism.