2023 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 are designed to make renewable energy usage more affordable through financial incentives for individuals who install solar panels on their homes. The incentives could include cash back, upfront discounts or credit towards your monthly utility bill. Some incentives are given by the federal government, some by the state of North Carolina and some by your specific utility company, county or municipality. Some broad categories of solar incentives include:

• Rebates: Solar rebates may be offered by your state or county, or by your local utility company. These rebates are essentially cash back that is applied after you purchase a solar system and before tax credits are calculated.
• Net Metering: Net metering is an incentive you can get after your solar system is up and running. If you have a net metering agreement with your Chapel Hill utility company, it will subtract the value of the excess energy produced by your solar system from your utility bill each month. In some areas, this is a dollar-for-dollar credit, while in others you might get refunded a percentage of the value.
• Solar Renewable Energy Certificate (SREC): SRECs and similar performance-based incentives may be available to you if you have a solar system that produces more than a specified (generally small) amount of electricity. These types of incentives are generally handled by the state government. You can sell SRECs to your utility company or other buyers, and the money you make is normally considered part of your taxable income.
• Tax Exemptions: These may come in the form of property tax exemptions, which would allow you to ignore the value of your solar system when paying taxes on your home. You may also qualify for an exemption on sales tax at the time of purchase.
• Tax Credits: Tax credits are dollar-for-dollar reductions (not deductions) in how much income tax you owe the government.

Federal Solar Incentives

When people think of solar incentives, federal incentives are likely the first thing that comes to mind. A federal incentive many people are likely familiar with is the Federal Solar Investment Tax Credit (ITC). This incentive is a tax credit for a specific percentage of the cost of your solar system.

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

Wondering how the ITC applies to your specific situation? Reach out to your local Chapel Hill solar panel installation expert to get more information.

In August 2022, the ITC (now referred to as the Clean Energy Credit) was expanded and extended by the passing of the Inflation Reduction Act. The Clean Energy Credit bolsters the current credit, increasing it up to 30% for solar installation projects started after January 1, 2022 and completed by the end of 2032. At this point, the percentage will be reduced slightly each year until the end of the program in 2035. The expansion also makes claiming credit for energy storage systems easier than ever before, beginning in 2023.

More information about the new Inflation Reduction Act can be found here. To better understand how the new Clean Energy Credit might apply to you, get in touch with your local Chapel Hill solar installers.

State & Local Solar Incentives

Tax credits, rebates and more might be provided at multiple levels. On top of federal solar incentives, there are often state and local ones as well. Incentives might be handled by the state of North Carolina, or by your county or municipality. Certain incentives are available for only a limited time, while others are ongoing.

Next Steps for Installing Solar in Chapel Hill

You can apply for solar incentives from the federal government and the North Carolina government, as well as from your local utility company. The increased availability of solar initiatives over the last 15 years has helped greatly increase nationwide adoption of solar energy. We suggest talking to your local Chapel Hill solar installer to learn more about these incentives and to make sure that you're getting the most money possible for your solar system.