Is Solar Worth It in North Carolina? (2022 Homeowner's Guide)
Here’s a quick overview of solar viability in North Carolina:
- North Carolina ranks 4th in the country for solar installations.*
- The average electricity rate is 11.38 cents per kilowatt-hour.**
- The average solar payback period is 13 years.***
- Homeowners are eligible for a great net metering program and the federal solar investment tax credit (ITC).
- The average homeowner saves $20,035 over the lifetime of their solar system.***
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North Carolina ranks 4th in the country for solar conversions, but residents also enjoy a lower energy rates than most homeowners throughout the country. Since one of the most significant benefits of going solar is the savings you’ll enjoy on your electric bills, some NC residents wonder if solar panels are worth the investment. Overall, solar is a great option for most North Carolinians, but it’s not suitable for everyone. Below, we’ll include the metrics you can use to determine if your home is a good candidate for solar, as well as the numerous benefits solar panels will bring. We’ll also discuss some things you should be aware of before you move forward with your solar project.
How to Figure Out if Solar Panels are Worth It in North Carolina
Solar panels will end up saving most homeowners in NC money over time, but they aren’t a worthwhile investment for every home. We’ll go over some of the things you should consider to help determine if solar is right for you.
What’s Your Home Electricity Consumption?
First, you’ll want to figure out how much electricity your home consumes in an average month. Since the primary benefit of solar panels is the savings they afford on electric bills, power consumption is an important metric to determine solar viability. Generally speaking, homes that consume fewer than 500 kilowatt-hours in an average month are not good candidates for solar panels. You can check your utility bills for your average usage over the past year. If you consume under that benchmark of 500 kWh, you might want to reconsider solar panels. With that being said, the average energy consumption per month in North Carolina is 1,041 kWh, so the large majority of NC residents will qualify for solar panels in terms of energy usage.
How Much Is It To Go Solar in North Carolina?
Of course, the total you pay for your solar array will play a role in your return on investment. The price of solar panels in North Carolina averages around $2.54 per watt, or about $18,669 — after the federal tax credit is considered — for the full 10.5-kW system that is typically required in the area. Both the per-watt price and the total for an average solar panel system are well below the national average, meaning your money goes further in NC for photovoltaic equipment than in many other states. Solar provides more value to homeowners who pay above-average prices for electricity, whether that stems from high electricity rates or high energy consumption. The electricity prices are below average in North Carolina, but the typical energy consumption of 1,041 kWh is above the national average of 893 kWh. As such, solar panels are worth a bit more in North Carolina than in the rest of the country, on average.
What’s the Payback Period for Solar in North Carolina?
One enormous upside to installing solar panels is that they almost always pay for themselves over time. You can determine how long that process will take for your home by calculating the solar panel payback period. The average payback period in North Carolina is 13 years, compared to the national average of 12 years. A normal range in NC is 10 to 16 years. Your solar panels are expected to last for 25+ years, which means any life after your payback period will afford you additional savings. On average, North Carolina homeowners will experience about 12 years of energy savings after their panels pay for themselves, which is outstanding. If your payback period is longer than 16 years, your total return on investment will be lower than average, although you’ll still likely save money in the long run.
What Are Average Buy-Back Rates in North Carolina?
Net metering is a policy that is highly favorable for solar customers, and it’s mandated in many states. Through interconnection via your inverters, the program lets you overproduce electricity and sell the excess back to your utility company. In most cases, you’ll receive a credit on your energy bill for every kWh of excess generation. North Carolina does mandate net metering, so all solar customers will have access to this incentive. Best of all, North Carolina’s Public Service Commission requires that all electricity providers buy back energy at the full retail rate, which means you’ll get credited the same amount you’d pay per kWh coming into your home for each kWh you produce. This is about the best-case scenario for net metering, and it makes eliminating your energy bills a distinct possibility.
How Much Sun Does Your Roof Receive?
Solar panels turn sunlight into electricity, which saves you money on your electric bill. As such, homes that receive more sunlight will naturally experience more savings. North Carolina experiences around 213 sunny days per year, on average, which is more than most other states, which average around 205. As such, solar panels will be slightly more valuable in NC in terms of available sunlight. To determine your home’s viability, though, you’ll also have to take some individual factors into consideration. For example, the direction your roof faces can affect how efficient your panels are. In the US, south-facing roofs are best suited for solar, while west-facing roofs are less ideal but can still make solar conversion worthwhile. Additionally, shading on your roof can make a big difference in solar viability. If you have tree coverage or buildings casting shadows and obstructing the sun on your roof, your panels will produce less energy and save you less overall.
What’s the Outlook on Solar in North Carolina?
North Carolina ranks 4th in the country for solar conversions, which means solar power is more prevalent and popular here than in most other states. Solar is looked on very favorably and is the Old North State’s primary renewable energy source. Utility-scale solar is wildly popular throughout North Carolina, and residential solar conversions have also been increasing in popularity over the last decade. The strength of the solar market in NC is primarily due to the state’s aggressive Renewable Portfolio Standard (RPS) goals and the many solar incentives afforded to residents that make solar more appealing and more affordable. The solar industry in North Carolina doesn’t show any signs of slowing down, so the likelihood is that the market will continue to grow in the near future.
Benefits of Solar Energy in North Carolina
Going solar in North Carolina provides many benefits, including financial perks and positive environmental change. We’ll include some information on the most appealing benefits of solar panels below.
Electricity Bill Savings
By far, the most significant financial benefit of going solar is the savings your panels will provide on your energy bills. Although the electricity rate is below average in NC, homeowners still stand to save around $118.44 per month if they can eliminate their electric bills, which is a good possibility thanks to the state’s excellent net metering policy. That comes out to a potential annual saving of $1,421. After your panels pay for themselves, you’re expected to save a total of $20,035 in energy savings over the remaining life of your rooftop solar system. In actuality, you could save even more. These numbers assume that the current electricity rate won’t change, and the likelihood is that energy rates will continue to climb. Converting to solar essentially lets you lock in a lower electricity rate for the 25+ years your system is expected to perform.
Lower Taxes & Access to Other Incentives
Solar is so prevalent in North Carolina in large part because the state provides so many appealing solar incentives to make going solar a better and more affordable option. One of the most crucial incentives comes from the federal government in the form of the federal solar tax credit (ITC). The ITC is for 30% of your total installation expense or an average of $8,001 in North Carolina. That amount gets credited to your federal income tax liability for the year you install and commission your system. Some additional state solar incentives in North Carolina are listed below:
- Property Tax Abatement for Solar Electric Systems: This is a property tax exemption that prevents your property taxes from increasing as a result of the value your solar energy system will add to your home value.
- Net Metering: North Carolina mandates net metering at the full retail rate, which helps homeowners eliminate electric bills and enjoy massive monthly savings that make solar panels more valuable.
- Duke Energy Solar Rebate: For Duke Energy customers, there is a $400 rebate for every kW of solar PV equipment installed, up to $4,000.
- Solar Financing Options: North Carolina has a state law that allows individual municipalities to offer affordable financing. The interest rate and loan term are often capped to ensure the loans remain widely accessible.
Home Resale Value Increase
Another substantial benefit of going solar that many solar customers forget to consider is the bump in home value solar panels provide. According to estimates from Zillow, your property value will increase by an average of 4.1% when you install a solar power system.3 Given the average home value of $248,950, the typical NC solar customers will enjoy approximately $10,207 in added property value.4 Your value increase could be even more substantial in high-value areas, like Raleigh and Charlotte. It should be noted that this increase in value only applies to solar customers who purchase their systems in cash or use a solar loan to finance panels. Solar leases and power purchase agreements (PPAs) are less desirable in most cases, in part because they don’t bump up home value.
Clean, Renewable Energy
While many homeowners will find the financial benefits mentioned above most appealing, there are also environmental upsides to converting to clean energy that will be even more enticing to some North Carolina residents. Most importantly, you’ll reduce your dependency on your utility company and fossil fuels in general, which means you’ll be limiting your carbon footprint and reducing how much you contribute to air and water pollution via emissions. Energy dependency also means you can avoid electricity rate spikes, which are expected in the future.
What to Look Out For When Considering Solar in North Carolina
If you’ve determined that solar is a worthwhile investment for your home, there are some things you should keep in mind as you move forward with finding a solar company to install your panels. We’ll discuss some additional considerations to make below.
The upfront fees of solar panels will be important to any solar customer, including those in North Carolina who pay less for solar equipment than homeowners in most other states. There are several things you can do to keep your upfront fees down. First, you can choose a solar installer that carries cheaper solar panels, although you will be sacrificing efficiency for affordability. Second, you can avoid add-on options like solar batteries and electric vehicle chargers, as these add significantly to your expenses. Finally, and most importantly, you can choose a loan option that doesn’t require a down payment or requires a small one.
Your estimated solar panel payback period is an important metric not only because it helps you determine solar viability for your home but also because you can use it to estimate your ROI. Solar PV systems in North Carolina typically pay for themselves within 10 to 16 years or an average of 13 years. If you find that your estimated payback period is longer than 16 years — using a solar calculator or a solar installer’s estimate — your total return on investment will be lower than average.
Net Metering Policies in North Carolina
North Carolina has an outstanding net metering program that guarantees you will be credited at the full retail rate for the excess energy you produce. For most North Carolinians, this means it will be relatively easy to offset and even eliminate electric bills entirely without having to add on a battery for solar energy storage. This favorable policy maximizes solar savings in the Tar Heel State.
Pending Policies & Changes to Incentives
Nothing is as constant as change in the solar industry, so you should be prepared for alterations to existing policies and incentives. Some of the incentives and rebate programs above could expire or change in the future, and new ones could be added to make solar even more appealing in North Carolina. We don’t recommend waiting for better incentives to come along, but you should absolutely check for updates to policies and perks before committing to solar panels.
Weather & Climate in North Carolina
Since North Carolina is far from the sunniest state, some homeowners worry that cloudy days will reduce panel efficiency. While this is true, North Carolina receives more than the average number of sunny days per year, which means solar panels will be more profitable here than in most other states. Some residents also worry about the extreme weather that’s prevalent in NC, including hurricanes, tropical storms and the occasional tornado. The rain these weather events bring will actually keep your panels clear of dirt and debris, which will maximize their efficiency for sunny weather. Strong winds can be damaging to solar panels, but choosing a solar installer that provides a good warranty is often enough to put any concerns to rest.
Companies Pushing Solar Leases or PPAs
Finally, you should be prepared to choose a reputable solar installer to handle your solar project, as not all solar companies are equal. There are some in North Carolina that advertise “free solar panels” that aren’t really free. Instead, this is a marketing ploy to get you to sign a solar lease. Solar leases are less appealing than solar loans and cash purchases because they don’t let you take the ITC, they save homeowners far less over time and they don’t positively affect property values. In the worst-case scenario, unwitting customers could end up getting scammed by disingenuous companies that are prevalent in NC, given the popularity of solar. NC Electric Cooperatives warns consumers about solar scams that leave them thousands of dollars in debt and with panels that stop working shortly after installation.5 Other reports from Energy Consumers of the Carolinas confirm that solar scams are prevalent in the area and often involve less appealing solar lease options, aggressive sales tactics and inflated savings claims.6 Always be sure to work with a vetted and reputable solar installer to avoid any issues.
Wrap Up: Is Solar Worth it in North Carolina?
Going solar is a worthwhile and profitable investment for most North Carolina residents, saving homeowners in the area an average of $20,035 over the lifetime of their systems. However, solar panels are not ideal for every home, and completing an assessment of your property to determine solar viability is a crucial step to take before committing. Some of the most important things to consider include your monthly electric bills, your estimated solar panel payback period, the size of the system you need to offset your electric bills, and the direction your roof faces. We suggest contacting a reliable solar panel installation company in your area to help you decide if solar is the right move for your home.
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Frequently Asked Questions
We get questions about the value of solar from North Carolina residents on a daily basis. Below are some of the questions we see most often, along with our responses. If you have specific questions that aren’t answered here, reach out to our team of solar experts at email@example.com.
The solar panel payback period depends on a variety of factors, including your system size requirements, your home’s orientation, shading on your roof, your home’s energy efficiency, your average monthly energy consumption, and more. You can use a solar calculator to estimate your payback period or contact a solar installer to do the calculation for you. With that being said, the average North Carolina resident will have an estimated payback period of around 13 years. The timeline typically falls between 10 and 16 years.
Solar panels do end up saving most North Carolinians money. By producing your own energy, you can offset your electric bills and enjoy energy savings each month, and the state’s net metering policy allows many solar customers to eliminate their energy bills altogether. The average energy savings in North Carolina after the panels pay for themselves is around $20,035.
Yes, as long as you pay with cash or use a solar loan to finance your solar energy system. According to research from Zillow, installing solar panels will boost your property value by around 4.1%, or an average of $10,207 in North Carolina. The State of North Carolina also offers a property tax exemption, which prevents this added home value from affecting your property taxes.
Yes, permits are required to install solar panels in North Carolina. These will add a few hundred dollars to your total installation expenses in most cases, but the price will be factored into your estimated system total. Your solar installer will typically handle the permitting process for you as a part of the installation.