Ohio Tax Credits & Grants for Residential Windmills

Ohio is working to modernize its renewable energy profile.

Over the past decade, the state of Ohio has been proactive in encouraging residents and industry to switch to clean energy. By taking advantage of state and federal funding to offer grants and tax incentives to Ohioans, the state has become a leader in the U.S. movement towards renewable energy conversion. Incentives for residents to install windmills -- also known as small wind turbines -- have increased the state's wind power quotient.

Advanced Energy Fund

More than a decade ago, the state of Ohio established its Advanced Energy Fund (AEF), which up until December 2010, funded 620 alternative energy projects across the state, with approximately $50 million in grants. Wind power installations of both commercial and residential origin are eligible for this funding. Customers of Ohio's four publicly-traded utility companies paid to replenish the fund via a required fee on their energy bills. However, utility bill funding for the Advanced Energy Fund expired at the end of 2010. Residential funding through the Advanced Energy Fund will be limited in 2011 and beyond.

Small Wind Turbine Federal Tax Credit

As of October 3, 2008, federal lawmakers approved the Emergency Economic Stabilization Act, H.R. 1424, giving Ohio and other state residents who install small wind turbines to generate energy for domestic use the right to take a federal tax credit. To qualify for the credit, the wind system must be rated to generate 100 kilowatts of electricity or less. The credit is for up to 30 percent of the system cost, including installation, with a cap of $4,000 for systems installed in 2008, and no specific limits for equipment installed thereafter.

Property Tax Abatement

The city of Cincinnati grants homeowners who build or retrofit energy-efficient residences, including those utilizing wind power, a 100 percent tax abatement lasting 10 years for renovated structures and 15 years for new construction. To qualify, the structure must meet LEED -- Leadership in Energy and Environmental Design -- certification standards of energy efficiency, and the maximum property value for tax abatement is $530,450, except for those homes that meet LEED platinum certification standards. These homes with superior energy efficiency are not subject to a value limit. The city of Cleveland offers a similar tax abatement incentive for wind-powered homes.

Interest Credit on Financing Residential Wind Power

As of September 9, 2009, the state of Ohio offers homeowners who seek financing for installing a residential wind power system a 3 percent interest reduction on that loan. To qualify, the applicant must be a state resident and a single-family homeowner who is able to obtain bank financing, and the project must be completed by a licensed contractor. The homeowner must fill out an energy efficiency audit sheet that the bank then submits to the state treasurer for interest reimbursement. This program has supplemented interest on 65 residential loans for a total of 3.2 million as of August 31, 2010.

References

• Bricker: "Ohio's Advanced Energy Fund Poised to Lose Funding"; Christopher Montgomery; August 18, 2010
• Ohio Development: Advanced Energy Funding Grants
• Database for State Incentives for Renewables and Efficiency
• Database for State Incentives for Renewables and Efficiency: Property Tax Incentive Energy Conservation for Ohioans Program
• Database for State Incentives for Renewables and Efficiency: Energy Conservation for Ohioans Program