The complete list of North Carolina solar incentives and tax credits for 2023, plus how to take advantage.
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North Carolina is a bit of a mixed bag when it comes to incentivizing home solar. The state still mandates full retail rate net metering, but credits expire annually, and the programs are soon set to change. Similarly, the state used to enable low-cost solar loans for homeowners, but the program expired in 2020. Solar rebates also used to be available for customers going solar in North Carolina, but the last of the big rebates expired in 2022.
So, are there any incentives for residential solar in North Carolina? Yes! Net metering is still in force, for now, and you can claim a property tax exemption for 80% of any value added by solar. There are also other low-cost solar loan options, and at least one building permit rebate program.
North Carolina State Solar Incentives
|Solar rebates in North Carolina||The main utility solar rebate program in North Carolina closed July 2022. The City of Asheville offers a building permit rebate, however.|
|Solar loans in North Carolina||North Carolinians can take advantage of low-cost solar loans from electric co-ops and utilities|
|State property tax exemption||Homeowners in North Carolina can claim an 80% property tax exemption for value added by a solar energy system|
|Net metering in North Carolina||Net metering is mandated by law in North Carolina at full retail rate, although credits expire annually with no payout and changes are coming soon to the state’s net metering programs|
Solar rebates in North Carolina
Duke Energy Carolinas and Duke Energy Progress provided rebates for residential and commercial solar energy systems from 2018 to early 2022. However, the rebate programs are now fully subscribed for 2022 and are not taking new applications (non-profits can still apply). Given the number of applications in the rebate system, it’s unlikely the program will be opened up again.
The city of Asheville offers a rebate on building permits for homes and commercial entities that install solar. The program is administered through the Department of Development Services.
Solar loans in North Carolina
Piedmont Electric Membership Corporation’s (PEMC) offers an Energy Efficiency and Renewable Energy Loan Program to members. This fund can help finance solar water heaters and solar panel through 5% interest loans of up to $10,000 for seven years.
Homeowners looking to install solar can access a low-cost energy-efficient loan from the Electel Cooperative Federal Credit Union. Loan amounts range from $5,000-$35,000 with repayment up to 10 years at low interest rates.
The state also used to enable solar loans through PACE programs, but the legislation allowing these types of loans expired in 2020.
State property tax exemptions in North Carolina
In North Carolina, homeowners can claim a property tax exemption for residential solar. However, the law only exempts 80% of the appraised value of a “solar energy electric system” from property tax, not the full added value of the installed system.
Still, this is great news for anyone looking to install residential solar in North Carolina who is worried about their property taxes skyrocketing as a result.
Net metering in North Carolina
North Carolina investor-owned utilities are required by law to offer retail rate net metering to customers. While credits carry over month to month, they expire at the beginning of the summer each year (June 1st). This means it’s best to size your home solar array to closely match your needs in North Carolina.
The reason North Carolina’s Public Utility Commission (PUC) established these net metering rules is that it costs utilities more money to generate power in the summer months.
There’s a strong chance net metering rules may soon change in North Carolina, however. House Bill 589, passed in 2017, calls for revision of net metering tariffs, including the end of retail rate net metering at the end of 2026. There are currently no publicly available plans from utilities, however, leaving solar customers in the dark about the future of net metering in North Carolina.
As it stands, homeowners interested in going solar in North Carolina may do well to install their systems and sign up for net metering under the current rules. This should, all being well, at least lock in retail rate net metering for a few years even if the utilities transition to a less generous compensation scheme after 2026.
The state has also brought in new rules and processes in 2020 to make it easier for utility customers to add solar battery storage to their existing systems without having to wait in line for interconnection again.
Final thoughts on state solar incentives in North Carolina
North Carolina gets above average sun and ranks 4th in the U.S. for installed solar capacity. The state currently has enough solar installed to power nearly one million homes, according to the Solar Energy Industries Association (SEIA).
Times are changing for solar in North Carolina, though. Early progress looks set to slow as some incentives decline and disappear altogether. SEIA predicts the state will rank 18th in five years, slipping some 14 places as other states build solar capacity faster.
For homeowners in North Carolina, there’s no time like the present to install solar. That way, you can sign up under existing net metering rules, claim the newly increased and extended federal solar investment tax credit, make use of that property tax exemption, and maybe even snag a building permit rebate, depending on where you live in North Carolina.