What Ohio's 2025 Budget Means for Efficiency Incentives

Ohio market insight · Efficiency & incentives

Updated September 27, 2026Ohio Commercial Energy editorial teamHow we review content Book a free 15-min bill review

The short answer

Ohio's FY2026–27 operating budget, House Bill 96, signed June 30, 2025, did not create or restore any business energy efficiency rebate program, and none of Ohio's investor-owned utilities runs one today. The budget's main building-related change was an expanded historic preservation tax credit. Businesses funding efficiency work in 2026 rely instead on state-administered rounds such as the Department of Development's Advanced Energy Fund grants and Energy Loan Fund, Ohio Air Quality Development Authority financing, C-PACE, USDA REAP loans and federal depreciation rules, and several of these open and close on fixed schedules.

What HB 96 did and did not do

Governor DeWine signed HB 96 on June 30, 2025, with 67 line-item vetoes, the most of his tenure. Summaries of the enacted bill focus on income and property tax changes, school funding and economic development credits. For building owners and energy users, the relevant results were:

No efficiency rebates or utility program mandates. The budget did not create a business efficiency rebate or restore utility efficiency programs, and published summaries of the enacted bill identify no changes to solar or PACE rules.
Historic preservation credit expanded. The Ohio Historic Preservation Tax Credit program was funded at $75 million a year, and projects in municipalities under 300,000 residents or in unincorporated areas may now request up to 35% of qualified rehabilitation expenditures instead of 25%. The governor vetoed a proposed sunset after fiscal year 2027. See the historic credit and energy upgrades.
Other credits. The Opportunity Zone credit rose to $50 million a year, and InvestOhio was set to wind down.

The bigger policy change for energy users that year came from a different bill: HB 15 (effective August 14, 2025) restructured default service, ended the OVEC legacy-generation rider and expanded behind-the-meter generation rights for mercantile customers. See the HB 15 business guide.

Why utility rebates are not coming back through the budget

Utility efficiency rebates in Ohio were created and ended through utility law and PUCO orders, not state appropriations, so a budget bill was never the lever.

Utility	Business rebate status
AEP Ohio	Business programs withdrawn April 3, 2024
FirstEnergy (Ohio Edison, CEI, Toledo Edison)	PUCO rejected new programs May 15, 2024
Duke Energy Ohio	Only low-income programs kept (May 14, 2025)
AES Ohio	Programs ended under HB 6 (December 31, 2020)

Any offer that promises a utility business rebate in Ohio in 2026 should be checked carefully.

What actually exists for businesses in 2026

Program	What it offers	Status and timing
Advanced Energy Fund grants (Ohio Department of Development)	$250,000 to $1 million per project for businesses, nonprofits, municipalities and schools; projects must cut utility energy use at least 15% (insulation, LED, controls, HVAC, windows and doors, CHP)	A $7.5 million round opened July 1, 2026, and closed August 31; the January 2026 round awarded $8.3 million to 10 organizations, three of them private companies
Energy Loan Fund (Ohio Department of Development)	Loans of $250,000 to $1 million, up to 15 years, zero interest for six months after closing; at least 15% energy reduction	First-come, first-served; the program page references FY2025 guidelines, so confirm funding before applying
Ohio Air Quality Development Authority	Financing for small-business projects (HVAC, LED, insulation, renewable generation) and revenue bonds for larger projects	Active; approved small-business financing in April 2026
C-PACE	Long-term financing repaid through a property-tax special assessment	Through participating energy special improvement districts
USDA REAP	Grants and guaranteed loans for rural small businesses and agricultural producers	Grant applications paused since April 1, 2026, pending new rules; guaranteed loans accepted year-round
Federal tax rules	100% bonus depreciation restored for property acquired after January 19, 2025	Section 179D deduction ended for construction beginning after June 30, 2026

Confirm any tax treatment with a tax adviser. For the full list of incentives that exist and those that ended, see the Ohio small business energy rebates guide; for financing structures and tax treatment in more depth, see maximizing ROI on efficiency without utility rebates.

How to line up a project with funding rounds

Get a baseline and an audit. State grants and loans require a documented reduction of at least 15% from existing conditions. Twelve months of bills and interval data, plus an ASHRAE-level audit, give you that baseline. See commercial energy audits in Ohio.
Bundle measures to clear the threshold. Lighting alone may not reach 15% of whole-facility use; combining lighting, controls and HVAC work often does. Rank measures on both kWh and demand (kW) savings.
Watch the calendar. The Advanced Energy Fund has run discrete rounds with short windows. Have drawings, quotes and a savings estimate ready before the next round is announced rather than starting when it opens.
Sequence financing. Use grant money for the measures with the longest paybacks, and loans, C-PACE or OAQDA financing for the rest.
Fix the supply side at the same time. Efficiency cuts kWh; your supply contract sets what each remaining kWh costs. Re-price supply after the project so the contract reflects your new load profile. The ROI calculator guide shows how to value savings at your actual rate.

What to watch in the next budget cycle

The next operating budget covers fiscal years 2028–29 and will be debated in the first half of 2027. Watch for Advanced Energy Fund and Energy Loan Fund funding levels, any changes to the historic credit's $75 million annual allocation, and whether OAQDA's small-business financing continues. Separately, USDA's rewrite of REAP rules will decide whether federal grants for rural businesses reopen.

FAQ

Did Ohio's 2025 budget create any energy efficiency rebates for businesses?

No. HB 96 did not create a business efficiency rebate or restore utility efficiency programs, and none of Ohio's four investor-owned utilities offers business rebates in 2026.

What state programs fund business efficiency projects in Ohio now?

The Department of Development's Advanced Energy Fund grants and Energy Loan Fund, both requiring at least a 15% energy reduction, plus Ohio Air Quality Development Authority financing and C-PACE through participating districts.

Is the Section 179D deduction still available?

Only for projects whose construction began on or before June 30, 2026. Confirm eligibility and timing with a tax adviser.

Can rural Ohio businesses still get USDA REAP money?

REAP guaranteed loans are still accepted year-round, but USDA stopped accepting REAP grant applications on April 1, 2026, while it rewrites program rules.