While upfront solar costs are high, federal and state tax credits, rebates, and other solar programs can significantly reduce costs for homeowners in South Carolina. These incentives can also help you maximize your solar investment or reduce your payback period.
Top solar companies can also help you locate the best incentives for your home and apply them toward your installation. Understanding what incentives you qualify for and how to apply for each will put you ahead in the process.
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What Are the South Carolina Solar Tax Credits and Rebates?
South Carolina incentive programs help alleviate the financial burden of installing solar power. Below are the available solar incentives, credits, and rebates for South Carolina residents.
South Carolina Solar Energy Tax Credit
South Carolina provides a state tax credit to encourage residents to go solar. You can claim 25% of your total solar system cost, or up to $ 3,500 annually for up to 10 years, as a state tax credit to reduce or eliminate your owed amount. The tax credit applies to several types of solar technology, such as solar panels, solar water heaters, and geothermal heat pumps. Any unused credit will roll over to the next tax year for up to 10 years. Residents must apply for the credit before completing their taxes.
More resources: Database of State Incentives for Renewables and Efficiency (DSIRE)
Renewable Energy and Energy Storage Property Tax Exemption
Like other home improvement upgrades, adding a solar system boosts home value. Typically, your property tax increases along with your property value. However, South Carolina offers a 100% property tax exemption for solar, so you won’t incur added taxes for your new system. This exemption includes leased and third-party solar systems. Solar systems must be 20 kW or under to qualify.
More resources: DSIRE
Santee Cooper customers can earn rebates for their solar panel installations. The company provides up to 95 cents per watt for solar systems, with a maximum of $5,700. Qualifying systems must fall between 1 kW and 20 kW. All installations must also be completed by a Santee Cooper Solar Electric (SE) Trade Ally or NABCEP-certified installer. We recommend checking the Trade Ally list to find a qualifying installer.
More resources: Santee Cooper website
State and Local Utility Companies
State and local utility companies offer additional credits and rebates for home energy efficiency upgrades. These upgrades could boost your solar system’s efficiency, improving energy savings. For example, Berkeley Electric Cooperative (BEC) offers several rebates for installing upgrades such as geothermal heat pumps and smart thermostats. We recommend checking the DSIRE website for an up-to-date list of area-wide solar and efficiency incentives.
How Does the Federal Solar Tax Credit Work?
The federal solar tax credit, now known as the residential clean energy credit, offers up to 30% back on your solar installation costs. Homeowners receive a federal tax credit for solar purchases that applies to their owed taxes to reduce or eliminate them. This credit applies to solar panels and stand-alone solar batteries.
To qualify, you must legally own your solar panels; leasing models and power purchase agreements (PPAs) don’t count. While some industry experts predict this will change as more people transition to solar, our advice is to play it safe and buy your system.
Is Net Metering Available in South Carolina?
Net metering programs offer additional energy savings for solar customers. Under these programs, homeowners send excess energy generated by their systems to the power grid. Utility companies provide credits on your electricity bills in exchange.
South Carolina’s net-metering policy applies to all statewide electricity companies except electric cooperatives. Payout rates vary between utility companies, so we recommend checking with your utility company for full program details.
How Much Do Solar Panels Cost in South Carolina?
The average 5-kilowatt South Carolina solar energy system costs $12,928, according to EnergySage. These prices are before applying any incentives. Total costs will depend on several factors, such as your energy needs, system size, and the solar company’s pricing. We recommend requesting and comparing quotes from at least three solar companies to find the best deal.
Before purchasing, consider your solar financing options. Here are some typical ways to pay for solar panels:
- Cash purchase: Buy your system outright.
- Solar loan: Finance the purchase and pay in installments over time.
- Solar lease: Pay a fixed monthly amount to rent the system.
- Power purchase agreement (PPA): Pay for the energy your system generates.
If you’re not paying with cash, speak to your solar company about their financing options. We recommend requesting and comparing quotes from at least three solar companies to find the best deal.
Is Going Solar in South Carolina Worth It?
Yes, solar in South Carolina is worth the investment. The state of South Carolina offers several generous incentives to help lower costs, making it more affordable to convert to clean energy. South Carolina has 216 sunny days annually, exceeding the national average of 205. Since solar panels work best in sunny environments, residential customers can maximize their energy cost savings by going solar. Adding high-quality solar batteries will offer backup power during outages caused by inclement weather.
Going Solar in South Carolina
Switching to solar power in South Carolina is a smart move, but it requires careful planning. Here’s a breakdown of the process to help you navigate each step:
- Initial consultation: Start by getting in touch with a few trusted solar companies. They’ll analyze your home’s sunlight exposure and energy needs to recommend how many solar panels you need. This involves both online tools and an expert visiting your property, usually over a few days.
- Custom design: With the site survey complete, your installer will design a custom system tailored to your roof, energy usage, and budget. Expect to review a range of design options that blend cost with performance, including recommendations for solar inverters—devices that convert energy from the sun into usable electricity—and batteries to store extra energy. This design phase can take about one to two weeks of back-and-forth communication.
- Permitting and approvals: After you approve the design, the installer will handle the necessary permits and paperwork. This stage takes one to two months, depending on local zoning regulations, HOA guidelines, and utility policies.
- Solar panel installation: With permits approved, the actual installation usually happens in a day. Expect this within one to three months of your initial consultation.
- Final inspection and activation: Your system undergoes a last inspection to ensure everything’s working smoothly. Your installer will walk you through system operations, including how to monitor performance, often via a mobile app. If you have solar batteries, they’ll explain how your system switches to stored energy during a power outage.
Understanding each step ensures you’re prepared for the transition, including how net metering will affect your energy bills. Drafted by local utility companies, net-metering policies allow your home to send unused energy back to the grid, which can help reduce your energy bills. The whole process may seem lengthy, but careful attention to detail ensures you’ll reap the long-term benefits of solar power.
Our Conclusion
South Carolina residents have several opportunities to save money on solar. Pairing state and federal tax credits will significantly reduce your initial investment, and net metering and utility company programs provide additional savings.
Request quotes from multiple providers and compare their pricing, product selection, and warranty coverage before hiring a top-rated South Carolina solar installer.
FAQs About Solar Tax Incentives in South Carolina
Can you get solar panels for free in South Carolina?
No, you can’t get free solar panels in South Carolina. However, you can use federal and state solar incentives to help reduce your solar installation costs. Programs such as the state’s net metering program offer long-term solar energy savings. Although not all system costs are eliminated, these programs make going solar more affordable.
What is the SC state solar tax credit for 2024?
The South Carolina state solar tax credit allows homeowners to claim 25% of solar installation costs, or up to $3,500, as an annual tax credit for up to 10 years. This credit helps reduce your state tax liability during tax time. Any unused credit rolls over for up to 10 years.
Can an HOA ban solar panels in SC?
No, homeowners associations (HOAs) can’t ban solar panels in South Carolina. However, they can restrict their placement on your home. Check with your HOA for any guidelines on solar installations in your community.
Does South Carolina offer a sales tax exemption for solar systems?
No, South Carolina does not offer a sales tax exemption for solar systems. You will incur the state’s 6% sales tax rate on your solar panel purchase.
Our Rating Methodology
We are committed to providing comprehensive and unbiased reviews to our readers. After over a thousand hours of research on solar companies, interviews with experts, and common customer needs, we’ve created a detailed rating system for solar providers based on six factors:
- Solar equipment, installation, and services (25%)
- Warranty and performance guarantees (25%)
- Brand reputation and certifications (15%)
- Financing options (15%)
- Experience (10%)
- Availability (10%)
Total scores are divided by 20 for a final 5-point rating scale.
