2022 South Carolina Solar Incentives, Tax Credits, Rebates (And More)
Here’s a quick look at the solar incentives in South Carolina:
- State Solar Tax Credit
- Property Tax Exemption
- Federal Solar Tax Credit
- Net Metering
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South Carolina is quickly rising the ranks when it comes to solar energy, recently jumping to rank 14th nationally (up from 21st in early 2021).1 The fact that more South Carolinians are choosing solar as an energy source is likely because the state offers a ton of great tax incentives, like the state solar tax credit and property tax exemption.
In this article, we’ll discuss all of the solar incentives available to South Carolinians who install a home solar panel system.
Disclaimer: This article is for informational purposes only. It should not be relied on for and is not intended to provide accounting, legal or tax advice.
Current Solar Rebates, Tax Credits, and Incentive Programs in South Carolina
|South Carolina Solar Incentive||Description|
|South Carolina Solar Energy Tax Credit||South Carolina’s state tax credit for solar energy allows residents to claim 25% of their solar installation costs as a tax credit.2|
|Net Metering||Net metering allows South Carolinians to receive credits from their utility company for any excess power their panels produce.|
|Renewable Energy and Energy Storage Property Tax Exemption||South Carolina provides a property tax exemption for renewable energy systems under 20 kilowatts.3|
|Federal Solar Tax Credit||The solar investment tax credit, or ITC, allows homeowners to claim a tax credit worth 30% of their installed system costs on their next federal filing. In South Carolina, that’s an average of $8,976.|
South Carolina Solar Energy Tax Credit
Good news for South Carolinians going solar: You’re eligible for one of the best solar state tax credits in the country. Residents of the Palmetto State can cut the cost of their solar energy system by a quarter through the Solar Energy Tax Credit.4
The credit allows solar users to claim 25% of their total system cost as a tax credit, capped at $3,500. If you don’t pay enough in taxes to reap the full value of the credit in a single year, don’t sweat it. The tax credit carries over for up to 10 years.
The South Carolina Solar Energy Tax Credit isn’t just for solar photovoltaic (PV) systems — it also applies to solar water heaters, solar space heaters, geothermal heat pumps and small hydroelectric systems.
Combine this state tax credit with the 30% federal solar tax credit, and South Carolina residents can offset a huge chunk of a solar installation — assuming they have the tax liability to do so.
Other South Carolina Solar Incentives
It’s hard to beat South Carolina’s incredible solar tax credit, but residents of the Palmetto State are also eligible for other incentives, like property tax exemptions and net metering. Plus, depending on where you live, you may be entitled to rebates for energy efficiency.
South Carolina Solar Property Tax Exemption
South Carolina offers the Renewable Energy and Energy Storage Property Tax Exemption.5 Under the policy, the cost of all renewable energy equipment and its components (such as inverters for solar batteries) are exempt from property tax increases. So, even though installing solar panels will increase your property value, you won’t have to pay the difference in your property taxes.
At the moment, there is no sales tax exemption on solar equipment in South Carolina, but there is a bill currently making its way through committee that could come to fruition in 2022.6
Net Metering in South Carolina
Net metering policies are an important factor to consider when switching to solar energy. These policies allow homeowners to earn credits for the extra energy their solar power system produces. Then, when they use more energy than their solar energy system generates, they can use their credits to accommodate the difference. It’s a great way to minimize electricity bills, even when you use more electricity than your solar energy system produces.
In South Carolina, residents benefit from generous net metering policies, although lawmakers
enacted a cap on net metering effective June 2021, so customers who have gone solar since may not see as many savings as customers who went solar prior.7
Several utilities offer net metering programs in South Carolina, which gives residents the freedom to choose the option that works best for them. All utilities with over 100,000 customers must offer net metering in South Carolina, excluding cooperatives.8 In late April 2021, the South Carolina Public Service Commission approved a bid to keep net metering in place while gradually transitioning to Dominion Energy’s existing time-of-use (TOU) rate schedule.9
Local Incentives and Rebates
Here are a few additional rebates offered by South Carolina utility companies:
|Utility Company||Solar Program / Rebate Offer|
|Duke Energy||Rebates ranging from $100 to $450 on select energy-efficient upgrades via Progress Energy Carolinas. Doesn’t include solar panels but does include water heaters, lighting, heat pumps, HVAC and more.10|
|Palmetto Electric||Rebates up to $1,000 per household on ground-source heat pumps via the Buried Treasure Rebate Program.11|
|Santee Cooper||If you’re lucky enough to be a Santee Cooper customer, you’re eligible for a rebate of $1.05 per watt of solar energy you install on your roof, up to $6,300.12|
Federal Solar Tax Credit
Regardless of which state you live in, all homeowners in the U.S. are eligible for the federal solar investment tax credit, or ITC, for installing solar panels as well as solar batteries and other energy storage systems. You can claim the ITC on your federal tax returns, and it deducts 30% of the total cost of the system from the taxes you owe.
With the average cost of a solar system in South Carolina at about 29,920, the federal tax credit can lead to a savings of about $8,976.
The ITC was first developed through the Energy Policy Act of 2005, under the Bush administration. Initially, it was set to last for just two years, but due to its success has continually been extended for solar panel installations.
It was set to phase out by the end of 2023, but the Biden administration renewed the ITC in 2022 by passing the Inflation Reduction Act. That bumped the ITC back up to 30% credit for solar equipment installed through 2032. It is set to reduce to 26% for systems installed in 2033 and 22% in 2034 before expiring completely in 2035, unless it’s renewed by Congress again.
To be eligible for the solar tax credit, homeowners must meet the following criteria:
- You have installed a residential solar energy system before 2035.
- You have placed the solar energy system in a residential location. It does not have to be your primary residence.
- You own the solar energy system, either having paid for it in cash or by taking out a solar loan. Homeowners who lease solar panels are not eligible to claim the ITC.
Read More About Going Solar
FAQ: South Carolina Solar Incentives
Here at EcoWatch, we field many questions from South Carolina homeowners who are interested in going solar. Here are some of the more common queries we see. If you have specific questions that aren’t answered here, reach out to our team of solar experts at email@example.com.
Yes, the solar incentives outlined in this article will remain in effect throughout 2022. These include a 25% state tax credit, property tax exemption, mandatory net metering programs and local rebates.
South Carolina does not have a statewide solar rebate, however you may be eligible for additional rebates through your utility provider. For example, If you’re lucky enough to be a Santee Cooper customer, you’re eligible for a rebate of $1.05 per watt of solar energy you install on your roof, up to $6,300.14