Ohio continues community solar ban in energy policy overhaul

Ohio Gov. Mike DeWine signed off on HB 15, a law that overhauls the state’s energy policies after it unanimously passed the Senate. The legislation’s sweeping changes to the state’s energy laws are a mixed bag for solar.

Repeals solar energy credit program

The enacted legislation repeals Ohio’s solar energy credit program, which allowed for certain solar energy resources to apply to the Ohio Air Quality Development Authority for payments from the Solar Generation Fund for credits received for generating electricity via solar energy. The repealed provisions also allow for an electric distribution utility to collect a monthly charge from each retail customer in Ohio to produce a revenue requirement of $20 million annually for disbursement through the credit program.

It also prohibits electric distribution utilities from collecting any charge authorized for the solar energy credit provisions the bill repeals and the remittance of any of the funds collected to any owner or operator of a qualifying solar resource. Further, the new law prohibits the state treasurer from remitting any money from the Solar Generation Fund to owners or operators of qualifying solar resources. However, the legislation directs the Ohio Air Quality Development Authority to do the following within 45 days of the bill’s effective date:

Forecast the future payments expected to be made to the owners or operators of qualifying solar resources that received one or more solar energy credits in 2024.
Direct the State Treasurer to calculate and remit the net present value of those payments upfront to the owners or operators of the qualifying solar resources.

After doing so, the state treasurer must transfer the cash balance of amounts remaining in the Solar Generation Fund to the School Energy Performance Contracting Loan Fund.

Senate guts community energy program from the final bill

The bill’s House version created a community energy pilot program, but the Ohio Senate removed the program.

“Ohio still lacks a community solar program. We still ban most people from pooling their resources to go solar,” said Rep. Tristan Rader (R) in a statement. “HB 15 is a foundation. Now we need to build the future—one that’s democratic, renewable, and owned by the people, not monopolies.”

The pilot program would have required the Public Utilities Commission of Ohio (PUCO) to create a pilot program of community energy facilities that total 1.5 GW throughout Ohio. The program would also have required PUCO to certify 500 MW of community energy facilities to be reserved for being constructed exclusively on distressed sites, or one or more commercial or public-sector rooftops.

The bill defined “community energy facility” as “a single facility that generates electricity by means of a solar photovoltaic device or uses as its fuel either solar, wind, biomass, landfill gas, or hydroelectric power, or uses a microturbine, natural gas-fired generator, energy storage system, or a fuel cell and meets certain requirements.” The program would have included consumer protections for community energy subscribers.

Ohio previously tried to pass a community pilot in 2023, but it never made it out of the house. The bill would have carved out a 1.75 GW community solar program for the state. Ohio University conducted an economic analysis on the program, finding that it would generate an estimated $5.6 billion in gross output and $409.5 million in local tax revenues.

Establishes solar loan program for schools

Despite the failed attempt to bring community solar to Ohio, the legislation has its silver lining for solar. The bill creates a new solar energy loan fund for public schools, enabling districts to install solar panels and reduce energy costs for the long term.

The bill enables schools to apply for low-interest loans at a 2% interest rate to finance solar and energy efficiency upgrades.

Incentivizes energy development on brownfields

The bill also makes former coal mines and brownfields eligible as a priority investment areas, within which property tax and siting incentives are provided for certain gas and electric utility projects.

Promotes behind-the-meter generation

The bill promotes “behind the meter” generation where industries generate their own power and reduce stress on the electric grid.

Among other things, the bill also

Lowers tangible personal property taxes for new electric generational facilities;
adds a linear generator and methane gas emitted from an active coal mine as renewable energy resources;
Bans utilities from owning or operating power plants;
Requires transparent grid capacity maps to improve local solar development;
Prohibits an electric distribution utility from using any electric energy storage system to participate in the wholesale market if the electric distribution utility purchased or acquired that system for distribution service; and
Repeals the prohibition against an electric distribution utility selling or transferring any generating asset without PUCO’s approval.

The legislation also repeals the last of the bailout law that required ratepayers to spend hundreds of millions per year to subsidize two Ohio Valley Electric Coalition coal plants, one of which was out of state. According to Rep. Rader, Ohioans are expected to save over $1 billion by eliminating utility surcharges for legacy coal generation and ending ratepayer-funded corporate handouts.

“We’re turning the page on corruption and turning up the power on clean energy,” said Rep. Rader. “HB 15 is a big win—but it’s only the beginning.”

The law will go into effect Aug. 14, 2025.

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