North Carolina Solar Incentives (Rebates, Tax Credits & More in 2025)

Here are some of the top solar incentives available to North Carolinians:

What Do North Carolinians Need to Know About the Federal Solar Tax Credit?

The federal solar tax credit (ITC) is not a North Carolina incentive, strictly speaking, since you can claim it anywhere in the U.S. However, we mention this benefit here because you can combine it with local incentives.

The average cost of a solar panel system in North Carolina is $33,705 before the federal solar tax credit, and $23,594 after the tax credit is applied. That’s a potential savings of $10,112!

• If you install a solar power system before the end of 2032, you can claim 30% of the total cost of installation as a federal tax credit
• The benefit will remain available in 2033, but it will be reduced to 26%
• The credit will decrease again to 22% in 2034
• The tax credit will be phased out in 2035 unless it is renewed by Congress

How to Claim the Federal ITC in North Carolina

You will claim your Federal ITC credit on your annual federal tax return. If you are filing your taxes yourself, here’s how to do it:

1. Download and fill out IRS Form 5695. You’ll write in the cost of your applicable solar installation on line one and calculate your credit on lines 6a and 6b. If you need help, a CPA or your solar installer should be able to help you.
2. Fill out your Schedule 3 on IRS Form 1040 using the information calculated on line 15 of your 5695 form.

For more detailed information on how to apply for the Federal ITC, visit the IRS.gov website. We highly recommend consulting with a tax expert and your solar panel company when applying for the solar tax credit.

EcoWatch’s Opinion on the Federal ITC in North Carolina 

The Federal ITC is easily the largest solar incentive available to North Carolinians, at 30% of the total cost of your solar system.

However, you will only realize the full benefits of the ITC if you expect to owe several thousand dollars in federal taxes over the next five years. After five years, the tax credit will no longer roll over.

We’ll go into detail why we believe solar batteries are going to be the norm — if not totally necessary — in North Carolina in the future. Luckily, the ITC applies to solar batteries, as well as panels and other equipment. For the typical $10,000 to $20,000 battery installation cost, the ITC could effectively save an additional $3,300 to $6,600 if you install batteries as well.

---

Advertisement

Best Solar Financing

4.5/5

National coverageGreat warranty coverageMost efficient panels on the market

Get Free Quote

---

Property Tax Abatement for Solar Electric Systems in North Carolina 

North Carolina has offered a property tax exemption for solar panels and solar thermal electric systems since 2008. These systems increase the value of your property, like any other home upgrade, but NC does not tax you for that increase.

For example, if solar panels increase the value of a home from $270,000 to $300,000, the owner will still be taxed for a $270,000 home. Given North Carolina’s property tax rate of 0.7% and the average system cost of 33,705, that’s a potential annual savings of $235. Over the 20 years your system is expected to hold value, that’s a total of $4,718. Actual savings will be lower because of system depreciation, but this is still substantial.

This tax incentive is also available for solar power systems owned by commercial, industrial and agricultural energy users. However, in these cases, the property tax exemption applies for 80% of the system’s value, instead of the 100% exemption available for homeowners.

How to Claim Property Tax Abatement for Solar Electric Systems in North Carolina 

Non-business personal properties do not require an application to claim an exemption or exclusion on property taxes in North Carolina. This also applies to government-owned properties and burial properties.¹

If your property does not fall under these categories, you will still need to file for a property tax exemption on your solar panel system in North Carolina. You can do this by filling out and submitting the AV-10 form through the North Carolina Department of Revenue (NCDOR).

EcoWatch’s Opinion on Property Tax Abatement for Solar Electric Systems in NC 

North Carolina’s 100% property tax exemption on residential solar panel systems is great news for homeowners. In states without this perk, the increased property taxes is a downside to going solar and cuts into your savings. This perk helps maximize savings on utility bills in North Carolina and legitimizes going solar even more for homeowners.

However, any solar panel systems connected to a business or used to generate income are only eligible for an 80% property tax exemption.²

---

Advertisement

Best Solar Financing

4.5/5

National coverageGreat warranty coverageMost efficient panels on the market

Get Free Quote

---

Financing Program for Renewable Energy and Energy Efficiency in North Carolina 

In North Carolina, city and county governments are legally authorized to offer low-interest loans for solar PV systems in homes and businesses. The loan program also covers other renewable energy technologies like geothermal heat pumps, wind turbines and biomass power.

The maximum interest rate of these revolving loans is 8%, and the maximum term is 20 years. This gives you the option of installing a solar energy system with loaned capital, then using your electricity savings to pay it back over time. This means your out-of-pocket cost is reduced to zero, and your solar power system can cover its own cost with the savings achieved.⁷

While accessible financing programs are great in any context, we expect them to be even more valuable in the coming years than ever before. As we recently saw in California, net metering credit rates are dropping across the country, and we believe it’s only a matter of time before the perk disappears entirely. When that happens, solar batteries will be the only option for maximizing savings and returns, so they’ll be a necessity.

Batteries add between $10,000 and $20,000 to your system costs, which is up to 33% above and beyond what you’d otherwise pay for solar in North Carolina. The added cost will make cash purchases less viable in general, so loans like this will be some of the only ways customers can afford to convert to clean energy.

How to Take Advantage of North Carolina’s Financing Program for Renewable Energy and Energy Efficiency 

The North Carolina Clean Energy Technology Center advises NC residents to contact their local government to learn about renewable energy and energy efficiency financing in your county or city.⁸

EcoWatch’s Opinion on North Carolina’s Financing Program for Renewable Energy and Energy Efficiency 

Guaranteed lower interest rates on solar loans can financially assist homeowners who cannot afford a solar panel system upfront. This will be even more impactful in the future if and when net metering rates decline and batteries become a requirement for savings.

Unfortunately, the North Carolina law is enacted through local governments, and is not a singular statewide program. Therefore, in order to learn more about your financing options, you may have to jump through some hoops when contacting your local government.
Watch Below: Learn Why North Carolina Is the Perfect State To Go Solar

Net Metering in North Carolina 

North Carolina offers net metering for solar power systems of up to 1,000 kW capacity, which covers all residential systems and many industrial and commercial solar systems. However, leased solar systems have a much lower limit for net metering: 20 kW or 100% of estimated demand, whichever is less.

Surplus electricity from your solar panels is credited on your next electric bill. Systems installed prior to October 1, 2024 receive the full retail value for each exported kWh, while customers who install solar after that will get a less beneficial avoided cost rate. Both are still great and will save you money over time, but the retail rate is far better. In our opinion, this is the beginning of the end for net metering in North Carolina, which means batteries are soon to become more prevalent and necessary to see the average state savings of $24,794 from converting to solar.

Your accumulated balance expires at the start of the summer billing period. Having an optimally sized solar power system is recommended, since an oversized system generates electricity that you can never get credit for on your power bills.

How to Enroll in Net Metering in North Carolina 

Your solar installer can help you fill out paperwork and enroll in North Carolina’s net metering program. You apply for net metering in North Carolina by:

1. Requesting an interconnection service form from your utility company for your renewable energy equipment. This will allow your utility company to see how much renewable energy you are generating and determine your credit each month.
2. Completing the application form and submitting it for your utility company to review and approve.
3. Connecting your system to your utility company’s system. This is the last step of the process after the utility company has approved your application. Your solar installer and the electric company will guide you through next steps.

Learn more about North Carolina’s net metering program at publicstaff.nc.gov.

EcoWatch’s Opinion on Net Metering in North Carolina 

North Carolina has an excellent net metering program that credits the avoided cost value of surplus energy your system generates to your next electric bill (for systems installed after October 1, 2024). Just be aware that any accumulated credits that go unused will expire on June 1 of each year so they won’t be available to address higher energy demand through the summer months.

Overall, North Carolina’s net metering program is generous and easy to apply for as long as your utility company and solar installer are helpful and communicative.

Local Solar Incentives in North Carolina 

We have listed the main solar incentives available in North Carolina, but keep in mind that additional benefits may be available depending on where you live.

For example, the City of Asheville offers building permit rebates for homeowners and businesses who use solar panels and other green energy technologies. This North Carolina solar rebate changes depending on the technology used — in the case of solar panels, there is a $50 rebate on your building permit application.

See also: Calculate the costs and savings you can get from installing solar panels

---

Advertisement

Best Solar Financing

4.5/5

National coverageGreat warranty coverageMost efficient panels on the market

Get Free Quote

---

What Do North Carolina Residents Need to Know About SRECs?

An SREC is a Solar Renewable Energy Certificate. SRECs are an instrument that allows residents in a state to make money off the electricity that their solar panels generate.

Many states (including North Carolina) have renewable portfolio standards (RPS) that require utility companies to generate a certain percentage of their electricity from renewable energy sources.

These utility companies can either meet these goals by generating their own renewable energy (like building their own solar farms), or by purchasing renewable energy credits (SRECs).

As a homeowner with solar, you can sell SRECs to utility companies to help them meet RPS goals. The amount of SRECs you can earn depends on how much energy your solar panels generate each year.

North Carolina’s version of SRECs is called NC-RETS, or The North Carolina Renewable Energy Tracking System. It distributes and keeps track of renewable energy and energy efficiency certificates to comply with NC’s RPS.⁹

Are SRECs Worth it in North Carolina? 

Talk with your solar provider about whether or not SRECs are a good option for you. North Carolina does not have an ambitious renewable portfolio standard, and a large nationwide supply of SRECs may mean that the value of SRECs is low.

North Carolina accepts SREC registrations from any state, meaning that solar panel systems in any state can help fulfill NC’s RPS requirements. This further lowers the value of SRECs in North Carolina.¹⁰

What’s the Near-Term Outlook for More Incentives in North Carolina?

The North Carolina government used to offer a 35% state tax credit on solar panel installations (in addition to the federal solar tax credit). That incentive expired in December 2015, but new legislation in 2022 proposed a renewal.¹¹

A 2016 report from Raleigh-based nonprofit RTI International concluded that $1.64 of revenue was generated for state and local governments for every $1 of the tax credit claimed.¹² This suggests that bringing the NC solar tax credit back could be good for the local economy of North Carolina.

As of November 2022, the NC solar tax credit has not been renewed.

If there are going to be changes in the near future, we’d expect them to be negative ones for net metering. This is a shame, but it seems that many states are following this trend. This will make batteries more valuable, but it will increase installation costs from $33,705 to between $43,000 and $53,000 before incentives.

The cost information presented in this article is derived from a comprehensive analysis, incorporating data from multiple industry sources. The average cost per watt per state was calculated based on figures from Consumer Affairs, Energy Sage, and Berkeley Lab’s Electricity Markets & Policy Department. Additionally, monthly energy consumption and the average monthly cost of electricity were sourced from the U.S. Energy Information Administration, ensuring a well-rounded and accurate representation of the information presented.