Ohio Historic Tax Credit and Energy Upgrades

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

If you are rehabilitating a certified historic, income-producing building in Ohio, energy upgrades that are part of the rehabilitation (HVAC, electrical, insulation, window repair) can be counted as qualified rehabilitation expenditures under both the Ohio Historic Preservation Tax Credit and the federal 20% historic rehabilitation credit. Ohio's credit is 25% of those costs, or up to 35% in municipalities under 300,000 residents and unincorporated areas, with a $5 million per-project cap and competitive, twice-yearly rounds. The catch is design: every upgrade must meet the Secretary of the Interior's Standards for Rehabilitation, so efficiency measures have to be chosen and detailed with preservation review in mind.

The two credits at a glance

Feature	Ohio Historic Preservation Tax Credit	Federal rehabilitation credit
Credit amount	25% of qualified rehabilitation expenditures; up to 35% in municipalities under 300,000 residents or unincorporated areas	20% of qualified rehabilitation expenditures
Cap	$5 million per project; $75 million a year statewide	No per-project cap
Award process	Competitive: 85-point scoring scale, 43-point minimum; two rounds a year	Not competitive; requires National Park Service certification of the rehabilitation
Eligible buildings	Individually listed on the National Register, contributing to a National Register or certified historic district, or a local landmark designated by a Certified Local Government; single-family and residential condominium uses are not eligible	Certified historic structures that are depreciable (income-producing)
How it is used	Refundable against Ohio taxes (financial institution, insurance premium or individual income tax), subject to statutory limits	Claimed ratably over five years; general business credit carryback and carryforward rules apply
Key tests	Program scoring on regional balance and economic impact	Substantial rehabilitation test: spending over 24 months must exceed the greater of $5,000 or the building's adjusted basis; five-year recapture period

The Ohio program's current timeline: Round 37 (fall 2026) applications were due September 30, 2026, and Round 38 opens in spring 2027 with a similar sequence of a SHPO pre-application meeting, an intent-to-apply deadline and the application itself.

What changed in 2025

Ohio's FY2026–27 budget (HB 96, signed June 30, 2025) raised the program's annual funding to $75 million and allowed projects outside cities of 300,000 or more to request up to 35%. The governor vetoed a proposed sunset of the program after fiscal year 2027. For the rest of what the budget did and did not do for energy efficiency, see what Ohio's 2025 budget means for efficiency incentives.

Two things that used to be stacked with historic credits no longer are:

Utility rebates. None of Ohio's investor-owned utilities offers business efficiency rebates in 2026.
Section 179D. The federal commercial building efficiency deduction ended for construction beginning after June 30, 2026. Projects already under construction before then should confirm eligibility with a tax adviser.

Which energy upgrades can count as rehabilitation costs

Qualified rehabilitation expenditures are costs chargeable to the capital account of the building itself and made as part of the certified rehabilitation. The federal rules exclude acquisition costs, enlargements that add floor area and site work such as parking and landscaping.

Upgrade	Likely treatment	Preservation notes
New HVAC system and ductwork or refrigerant piping	Generally a building cost	Route lines through existing chases; keep rooftop equipment out of view from the street
Electrical service, wiring and lighting	Generally a building cost	Retain or replicate significant historic fixtures
Roof and attic insulation	Generally a building cost	Usually the least visible, most effective envelope measure
Window repair plus interior or exterior storm windows	Generally a building cost	Repair of historic sash is usually preferred over replacement
Wall insulation in masonry buildings	Case by case	Moisture risk in historic masonry; needs careful detailing
Rooftop solar, EV chargers, site lighting	Often not a building cost, or site work	May be treated as equipment or site work; confirm treatment and visibility with SHPO

Treat the table as a starting point. Whether a specific cost qualifies is a tax question, and whether the design is approvable is a preservation question; get both answers before bidding.

Designing upgrades that pass preservation review

The National Park Service publishes guidelines on sustainability for rehabilitating historic buildings that align efficiency work with the Standards. The practical pattern for Ohio's common building types (masonry warehouses, downtown storefronts, mill buildings):

Start with operations and controls. Scheduling, zoning and a modern building automation system cost little in historic fabric.
Air seal before you insulate. Sealing at the roof line, floor penetrations and around windows reduces infiltration without changing appearance.
Insulate the roof and the basement or crawlspace first. These are the largest, least visible surfaces.
Repair windows and add storms. Weatherstripped historic sash with well-fitted storm panels is often approvable where replacement is not.
Choose low-profile HVAC. Systems with small refrigerant lines or compact air handlers limit new chases through significant spaces.
Keep new equipment out of primary views. Setbacks and screening on roofs matter for approval.

Document these decisions in the federal Part 2 application (description of rehabilitation) and the Ohio application at the same time, so the energy design and the preservation design are reviewed together.

Funding the rest of the energy scope

Historic credits cover only qualified costs. For the remainder:

C-PACE through participating energy special improvement districts can finance efficiency work and is repaid through a property-tax assessment.
Ohio Department of Development programs such as the Advanced Energy Fund grants and the Energy Loan Fund require a documented energy reduction of at least 15%; check current rounds.
Tax treatment of non-qualified equipment, including 100% bonus depreciation for property acquired after January 19, 2025, should be reviewed with a tax adviser.

For financing structures in more depth, see maximizing ROI on efficiency without utility rebates; for how efficiency affects appraised value, see energy efficiency and property value; for what incentives exist statewide, see the Ohio small business energy rebates guide.

Timeline for a combined project

12+ months before construction: confirm historic status, commission an energy audit, and meet with the State Historic Preservation Office.
Before the Ohio round deadline: submit the intent to apply and application with the energy scope defined.
Before work starts: secure federal Part 2 approval of the rehabilitation plan.
After completion: request certification of the completed work (federal Part 3) and the Ohio credit certificate.

FAQ

How much is Ohio's historic preservation tax credit in 2026?

Up to 25% of qualified rehabilitation expenditures, or up to 35% for projects in municipalities under 300,000 residents or unincorporated areas, with a $5 million per-project cap and $75 million available statewide each year.

Can energy efficiency work count toward the historic credits?

Yes, when it is part of the certified rehabilitation and charged to the building's capital account, such as HVAC, electrical, insulation and window repair. Enlargements, site work and some equipment are excluded or treated separately.

Can an owner-occupied business building qualify?

The federal credit requires a depreciable, income-producing building, which can include a building used in the owner's trade or business. Ohio's program excludes single-family and residential condominium uses; confirm eligibility with the Department of Development.

Can the historic credits be combined with Section 179D?

Not for new projects. Section 179D ended for construction beginning after June 30, 2026; earlier projects should confirm eligibility with a tax adviser.