South Carolina Solar Tax Credits, Incentives and Rebates (2024) - MarketWatch

South Carolina Solar Tax Credits, Incentives and Rebates (2024)

Federal Solar Tax Credit

The federal solar Investment Tax Credit(ITC) is the most beneficial solar incentive available to U.S. residents. Homeowners who install a solar power system can save up to 30% of the total project cost by claiming the ITC. The federal tax credit covers all aspects of a solar panel system, including solar panels, solar batteries and other components — plus labor and sales tax.

You can apply your tax credit to your federal income tax burden for the year you install a solar panel system. The tax credit was set to expire in 2023 but was recently renewed through 2035 thanks to the Inflation Reduction Act. The tax credit has the following timelines:

- You can claim a 30% credit through 2032
- You can claim a 26% credit through 2033
- You can claim a 22% credit through 2034
- The credit will phase out in 2035 unless extended or renewed

The average cost of going solar in South Carolina is $15,960 or $2.66 per watt. By claiming the 30% federal tax credit, you can save $4,788, bringing your net cost to $11,172.

To claim the ITC, you must complete and attach IRS Form 5695 to your federal tax return (Form 1040 or Form 1040NR). We suggest consulting a tax professional for assistance or questions.

State Solar Incentives

South Carolina does not offer many state solar incentives. But the available incentive programs can help homeowners save money on the upfront cost of going solar.

Solar Energy, Small Hydropower and Geothermal Tax Credit (Personal)

Incentive value: Up to $3,500

Frequency: One-time

In addition to the federal tax credit, South Carolina offers a state solar tax credit worth 25% of your solar system value. The maximum credit available is $3,500 or 50% of your tax liability for that year, whichever is less. Residents can roll over any unused credits to the next year for up to 10 years.

To claim the credit, you must submit the SCH.TC-38 form and attach any necessary documents related to your solar project (invoices, designs, etc.).

Renewable Energy Property Tax Exemption

Incentive value: Savings vary

Frequency: Ongoing

South Carolina recently amended a bill that provides a property tax exemption to homeowners who install a renewable energy system. So if you install a system using solar power or other renewable energy sources and your property value increases, the local municipality won’t tack on extra property taxes.

For more details about South Carolina’s incentive program, visit solar.sc.gov.

Local Solar Incentives

South Carolina’s local incentives can also help make going solar easier, including access to community solar. Below is an overview of the available local incentives:
Local South Carolina Solar Incentive Eligible Location Estimated Savings Description Frequency

Berkeley Electric Cooperative Home Advantage Loan Program

Utility companies and local governments in South Carolina may offer other solar incentives based on your location. Talk to your electric company, local municipality or solar installer to learn more about available incentive programs.

How To Claim Local Incentives

Santee Cooper customers who enroll in the Solar Share program must fill out an online application form.

Those interested in Berkeley Electric Coop’s loan program can apply online or download an application, which you can submit by email or in person. You have to be enrolled with the utility company for at least 12 months to be eligible for the loan program.

South Carolina Net Metering Explained

Net metering is a billing mechanism that allows you to send the excess energy your solar panels generate to the grid in exchange for power bill credits. A net-metered solar array is interconnected with the local grid and uses a bidirectional meter to measure incoming and outgoing power. The utility company then bills the customer only for the net energy used.

South Carolina’s net metering policy allows residential solar panels of up to 20 kW to connect to the grid. Utility companies measure the production and consumption of such systems monthly. Your utility will credit you for excess energy at the end of the month at a utility-specific rate, which is typically not the full retail rate of electricity in South Carolina.

Current energy credit rates for 2023 are as follows:

- Duke Energy Carolinas: $0.0270 per kilowatt-hour (kWh)
- Duke Energy Progress: $0.0230 per kWh
- Dominion Energy South Carolina: $0.03363 per kWh

How To Enroll in Net Metering

Residents of the Palmetto State don’t need to do anything to participate in a net metering program. Your solar installer will apply for interconnection during the permitting process. Your utility company will inspect the installed photovoltaic (PV) system to ensure compliance with safety guidelines. The electric company also provides the net meter.

Estimated Solar Savings in South Carolina

Claiming the federal and state tax credits in South Carolina can significantly impact the net pricing of a solar power system. The federal tax incentive allows you to claim 30% of your total system cost, while state credit savings accounts for another 25%. Given South Carolina’s average solar installation cost of $15,960, taxpayers can save around $8,000 by claiming both tax credits.

Plus, high-quality solar panels save you substantial money on electric bills over their 25- to 30-year lifespan. Considering South Carolina’s relatively short payback period of 6.7 years, solar panel owners can benefit from virtually free energy for nearly two decades after paying off their panels.

As of 2021, the average monthly energy bill in South Carolina costs $138. Based on that figure, if your home generated all its energy from solar power, you could save well over $25,000 during the lifetime of a solar panel system.

Are Solar Panels Worth It in South Carolina?

Going solar can be worth it for South Carolinians looking to lower electricity bills. The state sees decent levels of sunlight, with over 200 annual days of sunshine in most areas. It also has a lower average price for installing solar, which when combined with federal and state solar tax credits, allows homeowners to slash upfront purchase costs significantly.

All the above reasons make solar panels an attractive financial investment in South Carolina. Solar power has several other benefits, including reducing your home’s carbon footprint. It can also boost the value of your home and if you invest in battery storage, offer protection against power outages.

Check out our picks for the best solar companies to get a quote for going solar in the state of South Carolina.

Frequently Asked Questions About South Carolina Solar Incentives

Solar panels are complicated electronic devices that require complex manufacturing techniques and a combination of materials. If a company is advertising “free” solar panels, it may be a scam.

However, some companies offer solar leases with no upfront purchase cost, similar to a car lease. Instead, homeowners pay a monthly fee to use the energy the panels generate. Because no down payment is required, some companies label leasing services as “free solar panels.” We recommend that homeowners carefully consider the pros and cons of solar leasing before deciding on this financing method.

Based on our research, the typical home needs around 15 to 20 solar panels to generate enough energy to cover average consumption. However, your specific energy needs, roof layout and consumption patterns will determine what system size you need. You can work with your installer to determine the right number of panels for your solar energy system.

While many U.S. states have laws preventing HOAs from restricting rooftop solar panel installations, South Carolina doesn’t have such a law. This means HOAs in South Carolina can limit if and how many solar panels you can install on your property. We recommend checking with your HOA about such laws before signing a purchase agreement with a solar company.

The South Carolina Solar Habitat Act was created with support from the South Carolina Natural Resources Department (SCNRD). The act allows the SCDNR to establish a voluntary solar habitat certification program. It also guides solar developers in establishing solar sites as pollinator-friendly habitats.

No. South Carolina’s solar energy tax credit is a tax deduction, it is not refundable. Homeowners can only claim 25% of renewable energy system costs if they owe a similar or greater state tax burden. You cannot take the entire tax credit if you owe a lesser amount of state income taxes. However, you can roll any remaining credits over to the following year for up to 10 years.

Methodology: Our System for Ranking the Best Solar Companies

We closely evaluate solar installation companies with a focus on the factors most important to homeowners like you. We based our solar company methodology on input from multiple homeowner surveys, discussions with industry experts and research into the renewable energy market. Our review process involves assessing each company on the following criteria, which we then use to calculate a rating out of 5 stars.

- Cost and payment options (20 points): Cost is one of the most important factors when installing a solar energy system. Solar providers that offer cash purchases and in-house loan financing earn full points in this category. Companies also receive bonus points for offering solar panel leasing or power purchase agreements (PPAs).
- Services (20 points): In addition to solar installations, companies offering backup battery and electric vehicle charger installations, energy efficiency audits and system monitoring earn the most points in this category. Companies can also receive points for completing installations in-house, as opposed to using third-party contractors.
- Reputation (20 points): To assess the reputation of each company, we consider Google star ratings, Better Business Bureau (BBB) scores and reviews, and NABCEP certification status. We also look at customer complaint rates on sites like the BBB and weigh how the company responds.
- Warranty (15 points): We verify that each company offers workmanship, product and performance warranties on all of its solar installs. A provider earns more points for extending warranties that meet or exceed industry standards, including 10 years for system workmanship and products and 25 years for panel performance.
- Customer Support (10 points): Solar companies that offer virtual consultations, a mobile app, 24/7 customer support and high customer satisfaction with backend support earn the most points in this category.
- Industry Experience (10 points): Providers with 10 or more years of experience in the solar installation industry earn a perfect score in this category.
- Sustainability (5 points):To measure sustainability, we assess each company based on whether it shares a detailed sustainability statement or ESG disclosures on its website. We also conduct research to see if companies offer end-of-life panel disposal programs or have eco-friendly community partnerships.

Aniket Bhor is a solar engineer who has spent nearly a decade studying and working in the solar power sector in the European, Asian and North American markets. He is a climate enthusiast and avid cyclist, and he also loves to lose himself in books and cooking.

Tori Addison is an editor with over five years of experience in the digital marketing industry. Her includes communications and marketing work in the nonprofit, governmental and academic sectors. A journalist by trade, she started her career covering politics and news in New York’s Hudson Valley. Her work included coverage of local and state budgets, federal financial regulations and health care legislation.

If you have questions about this page, please reach out to our editors at editors@marketwatchguides.com.