2025 Solar Incentives Guide for Chapel Hill, NC - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Chapel Hill.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2024 and beyond)
- Ways to optimize your solar investment
Solar installers are experts in maximizing your solar tax credits and rebates.
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What Solar Tax Credits, Incentives, and Rebates are Available in Chapel Hill?
Duke Energy - NC Solar Rebate Program
Nonresidential: $0.50/W-AC
Nonprofit: $0.75/W-AC
Property Tax Abatement for Solar Electric Systems
All other systems: 80% of the appraised value
Active Solar Heating and Cooling Systems Exemption
EnergyUnited (Electric) Residential Energy Efficiency Program
Heat Pumps (16 SEER): $300/unit
Duke Energy (Electric) - Residential Energy Efficiency Rebate Program
Geothermal Heat Pump: $400 + $50 with added smart thermostat
Heat Pump Water Heater: $350
Attic Insulation or Attic Air Sealing: $250
Duct Sealing: $100
Variable-Speed Pool Pumps: $300
NC GreenPower Production Incentive
PV larger than 5 kW: must enter bid process
Wind up to 10 kW: $0.09/kWh
Wind larger than 10 kW: must enter bid process
Local Option - Financing Program for Renewable Energy and Energy Efficiency
Local Option - Green Building Incentives
Duke Energy Progress - Residential Energy Efficiency Rebate Program
Geothermal Heat Pumps: $400 + 50 with smart thermostat
Heat Pump Water Heater: $350
Attic Insulation & Air Sealing: $250
Duct Sealing: $100
Pool Pump: $300
Piedmont EMC - Residential Solar and Energy Efficiency Loan Program
Federal Residential Renewable Energy Tax Credit
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. This agreement may apply to all or a percentage of the excess electricity that is generated by your solar panels. Your utility company will then deduct this value from your utility bill each month.
Federal Solar Incentives
Federal solar incentives are probably the first thing that comes to mind when thinking about solar incentives. You've likely heard of the Federal Solar Investment Tax Credit, or ITC. This incentive is a tax credit equal to a certain percentage of the money you spend installing solar panels.
The ITC initially applied to 30% of the total cost of installing solar panels, although it has fluctuated slightly over the years 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, accessories and labor. There is no maximum amount you can claim. The ITC applies to solar systems installed after January 1, 2006, on your primary or secondary residence. The residence must be in the United States and owned by you.
Wondering how the ITC applies to your specific situation? Contact your local Chapel Hill solar panel installation expert to get more information.
The Inflation Reduction Act, passed in August 2022, expanded and extended the ITC (as well as retitling it the Clean Energy Credit). The Clean Energy Credit is valid until 2035. Your solar installation project undertaken between 2022 and 2032 may qualify for a 30% tax credit. This amount will be decreased slightly each year until the current program ends. Beginning in 2023, it will also be easier to obtain credits for energy storage systems under the new laws.
Click here to learn more about the new Inflation Reduction Act. Your local Chapel Hill solar panel company is the best resource for answering your questions about the new Clean Energy Credit and how it will apply to you.
State & Local Solar Incentives
Tax credits, rebates and more can be provided at multiple levels. In addition to federal solar incentives, there are often state and local ones, too. Certain incentives are offered for only a limited time, while others are ongoing. Your local incentives may come from the North Carolina government, or from your specific county or municipality.
Next Steps for Installing Solar in Chapel Hill
There are a variety of solar incentives: those offered by the federal government, those given by the North Carolina government and those provided by local utility companies, to name a few. The use of solar energy has grown tremendously in the last 15 years, thanks to these incentives. If you're ready to switch over to solar energy, calling your local Chapel Hill solar panel installation expert is an excellent place to start.
EcoWatch's Chapel Hill, NC Solar Incentives FAQs
How can I find out if I qualify for different solar incentives?
It's a good idea to talk to your local Chapel Hill solar installer to get an understanding of which incentives your project may qualify for. Usually, solar incentives apply to new solar panel systems installed on property you own (in the U.S.) between the dates specified by the incentive. Some incentives, like those given by the state of North Carolina, might have other requirements.
If I already have solar panels, can I still claim incentives?
If your solar system was installed after January 1, 2022, you may qualify for the newly increased 30% tax credit under the Inflation Reduction Act. If your system was installed between 2006 and 2021, you might qualify for a tax credit between 26% and 30%, depending on the exact installation date. Speaking with a representative from the company that installed your system, or any local Chapel Hill solar installer, can help you understand what incentives you qualify for.
What are the top solar panel installation companies near me?
To find the right solar panel installer for you, check out our guide to the best solar companies in Chapel Hill.
If I switch my appliances out for ones that can utilize solar energy, are there any benefits that I can claim?
The new Inflation Reduction Act introduces several incentives meant to reward homeowners who make eco-friendly upgrades. Some incentives include rebates and tax credits for installing new electric appliances. You can find more details about these incentives here.
Can I apply for incentives both towards the up-front cost of solar panels, and later as reimbursement?
The order in which incentives are applied may vary depending on which incentives you are claiming but in most cases yes, you can claim multiple types of incentives for your solar project. Speak to your solar installer or a local tax professional to ensure you are claiming all possible incentives and applying them in the correct order.
Our goal is to reach as many people as we can with sensible solutions like solar energy. Our team of full-time local researchers collects solar price and installation data for every city in America then compiles it to create these digestible city guides. If you want to read our solar expert's opinion on the top solar companies featured here, follow this link.