The complete list of South Carolina solar incentives and tax credits for 2023
Table of Contents
South Carolina is currently 14th in the U.S. for overall installed solar capacity, according to the Solar Energy Industry Association (SEIA). The state has fairly average electricity costs but above average sunshine, making this a good place to go solar.
What makes South Carolina a great place to go solar, is the state’s 25% tax credit!
South Carolinians can also access low-cost solar loans and generous utility rebates, plus net metering. Put these all together with the 30% federal solar tax credit and your rooftop solar array could pay for itself in no time.
South Carolina Solar Incentives
|State solar tax credit in South Carolina||Residents who install solar at home can claim a 25% tax credit for up to 10 years.|
|Solar loans in South Carolina||Low-cost solar loans of up to $40,000 are available to eligible South Carolinians, in exchange for their SRECs|
|Utility solar rebates in South Carolina||Residential customers could claim utility incentives up to $5,700|
|State sales tax exemption||South Carolina doesn’t currently offer a solar sales tax exemption but is considering one|
|State property tax exemption||Solar energy equipment gets a pass for added property taxes in South Carolina|
|Net metering||Utilities have to offer net metering but don’t pay retail rate for exported energy and may charge solar customers additional fees|
State solar tax credit in South Carolina
South Carolina offers a state tax credit (Solar Energy System credit) for solar installations. Residents can claim 25% of solar installation costs as a tax credit, with any unused value carried forward for up to 10 years.
The maximum tax credit is $3,500 per year for up to 10 years or 50% of tax liability for that year, whichever is less. As an example, let’s say you install a solar energy system costing $20,000. You could claim a tax credit of $5,000 for the year of installation, assuming your total tax liability is at least $10,000 that year. If you only have a tax liability of $5,000 that year, however, you can claim a tax credit of $2,500 and then carry forward the remaining $2,500 to apply against tax at some point in the next nine years.
To see how this works, here’s the form you’ll need to fill out to claim the credit at tax time.
Find a Solar Energy partner near you.
Santee Cooper offers low-cost (currently 2% interest) loans with on-bill financing for qualifying residential customers through the Smart Energy Loan Program for Renewable Energy. Loans are available for up to $40,000. In exchange for the low-cost loan, customers agree to transfer all SRECs to the utility for a period determined by the contract.
Utility solar rebates
Although there’s no state solar rebate in South Carolina, customers of Santee Cooper can access a solar rebate incentive. This is for residential customers who install rooftop solar. The incentive is $0.95/W, up to a maximum of $5,700.
A South Carolinian who installs a 6 kW solar array on their roof would max out the $5,700 rebate.
State sales tax exemption
South Carolina does not have a sales tax exemption for solar energy systems… yet. A bill is making its way through the state legislature that may exempt solar installations sometime in the future. The chances of this happening by the end of 2022 look slim, but if the bill is signed into law, it could save homeowners in South Carolina a cool 6% on their rooftop solar array.
State property tax exemption
South Carolina provides an exemption for taxes associated with value added by installing solar at home. The Renewable Energy and Energy Storage Property Tax Exemption covers all renewable energy equipment, including inverters and solar storage.
The only caveat is that the solar energy system must be under 20 kW to qualify. This shouldn’t be a problem for most homeowners, with the average system in South Carolina clocking in at around 11 kW.
Net metering in South Carolina
South Carolina’s net energy metering regulations require investor-owned utilities to credit homeowners for excess power produced by their solar electric systems. Utilities don’t have to pay full retail rate for exported energy, however, and some utilities charge additional fees to net metering customers.
Duke Energy, for instance, offers net metering but charges customers various fees for the program. Dominion Energy also offers net metering (with similar charges to Duke Energy) and issues a payment to customers for any unused credits at avoided cost rate at the end of the billing cycle.
The new rules for net metering in South Carolina began January 1, 2022, thanks to the South Carolina Energy Freedom Act. Now, residential customers are billed under the Solar Choice Metering Permanent Tariffs. Some customers who signed up prior to 2022 can receive full retail rate compensation for a set period of time (until 2029 at the latest).
Find a Solar Energy partner near you.
Final thoughts on state solar incentives in South Carolina
South Carolina might not rank too high for installed solar in the U.S., but it’s a fantastic place to go solar at home. Residents here can enjoy more than average sunshine, a generous state tax credit for installing solar, the federal tax credit, utility rebates up to $5,700, a property tax exemption, and net metering. Whew!
There’s even talk of a state solar sales tax exemption, though the bill is currently stuck in committee in the state legislature. Write your representative!