2024 Solar Incentives Guide for Chapel Hill, NC - Tax Credits & Rebates

What Solar Tax Credits, Incentives, and Rebates are Available in Chapel Hill?

Source: https://www.dsireusa.org/

Solar incentives encourage people to switch to renewable energy by providing incentives meant to lower the financial burden of solar panel installation and use. Incentives could include things like discounts, cash back or credit towards your monthly utility bill. Some incentives are offered federally, while others are offered by the North Carolina government or your specific utility company, county or municipality. Categories of solar incentives include:

• Solar Renewable Energy Certificate (SREC): SRECs can be sold to your utility company (or other buyers) for cash that normally counts as part of your taxable income. In most cases, there is a small threshold of energy production to meet before your solar system is eligible for SRECs or other performance-based incentives. These kinds of incentives are normally handled at the state level.
• Rebates: Some solar companies will help you claim a rebate, or partial refund of your purchase, for your solar system. Counties or states will also sometimes offer limited-time rebates. The value of a rebate will usually come off your total price before tax credits are calculated.
• Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the government. (This is different from a tax deduction.)
• Tax Exemptions: Your solar panels could qualify for both sales tax and property tax exemptions. Sales tax exemptions are effective at the time of purchase. Property tax exemptions allow you to exclude the added value of the solar panels when calculating property taxes on your home.
• Net Metering: You can sign a net metering agreement with your Chapel Hill utility company that will apply to all or a percentage of the excess electricity your solar panels generate. They will then deduct this value from your utility bill each month.

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Federal Solar Incentives

Federal solar incentives are likely to be the first thing that you think of when thinking about solar incentives. The solar incentive that you're most familiar with is probably the Federal Solar Investment Tax Credit (ITC), which provides a credit on your taxes equal to a percentage of the cost of your solar system.

The ITC was originally for 30% of the total cost of installing a solar system, although it has fluctuated slightly over time between 26-30%. The installation date of your solar system will determine what percentage you qualify for. The total installation cost includes the panels themselves as well as the cost of equipment, labor and accessories. There is no maximum amount you can claim. The ITC applies to solar panels installed after January 1, 2006, on your primary or secondary residence. The residence must be in the United States and owned by you.

To find out exactly how much the ITC could save you, talk to your local Chapel Hill solar panel installer.

The ITC was both renewed and expanded by the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. The Clean Energy Credit lasts until 2035. Any solar installation project that is completed between January 1, 2022, and December 31, 2032, may qualify for a 30% tax credit. This amount will decrease slightly each year until the current program ends. The expansion to the program also makes credits for energy storage systems even easier to claim, beginning in 2023.

Click here to learn more about the new Inflation Reduction Act. To understand how the new Clean Energy Credit will apply to you, get in touch with your local Chapel Hill solar installers.

State & Local Solar Incentives

There are more than just federal solar incentives; tax credits, rebates and more may be offered at the state and local level. Certain incentives are ongoing, while others are available for a limited time. Incentives might be given by the North Carolina government, or by your county or municipality.

Next Steps for Installing Solar in Chapel Hill

Solar incentives can come from the federal government, the North Carolina government or your local utility company. The variety of available incentives has contributed to a large increase in solar energy use in the last 15 years. Getting in touch with your local Chapel Hill solar panel installer is a great first step towards getting all the incentives you qualify for when you switch to solar energy.