Go Solar in South Carolina!
Some recent changes to South Carolina’s solar policies, including a new Renewables Portfolio Standard and updated net metering rules have helped the state move forward in terms of its commitment to solar energy. In 2015, South Carolina Electric & Gas instituted generous performance based incentive (PBI) payments. Performance-based incentives (PBI) are incentives that are paid based on the actual energy production of the solar system. Typically these are paid based on an energy ($/kWh) basis over a period of time. This is different from the approach where a one-time rebate is provided on a $/kW basis at the time the system is installed.
An example of a PBI approach is the California Solar Initiative, where incentives are paid monthly over a 5-year period of time (60 total payments) based on the actual energy (kWh) produced by a home owner’s solar energy system.
South Carolina Solar Incentives
Net Energy Metering (NEM)
Net Energy Metering or Net Metering allows consumers who generate some or all of their own electricity to access it anytime, not just when that power is being generated. Solar is not an “on demand” resource – you want electricity 24/7, not just when the sun is shining. That’s where net metering policies come in. They regulate how your solar installation connects with your local utility company to access electricity. through their delivery grid. The policies vary by state but most provide solar customers a way to store and access energy based on the kilowatts they generate. Costs vary depending on how much power the consumer generates and uses.
State Tax Credit
The tax credit for a residential system is 25% of the total cost of the system. Homeowners in South Carolina can claim up to a maximum of $3,500 per year for up to 10 years to utilize this tax credit.
Federal Investment Tax Credit
All 50 states are eligible for a 30% Federal Investment Tax Credit (ITC) to reduce the cost of the system. This is calculated as 30% of the value of your system after the upfront rebate. If you choose to purchase or finance your system this tax credit goes to you directly through your federal tax return, and if you choose to lease your system will be assigned to your leasing partner which ultimately lowers your cost. Your solar specialist will calculate this for you and can consult with your accountant to fill out Form 5695 to claim your credit.
South Carolina Electricity Prices
South Carolina is tied for the nation’s 19th highest electricity prices
Cost per kwh (cents)
Why are electricity prices important?
The power your solar panels produce reduces your electric bill. The higher the price of power, the more you save by generating your own.
And if electricity prices are low in your state, it might be because your utility company gets most of its energy from cheap coal. That makes solar less economical, but doesn’t take into account the long-term environmental costs of cheap fossil fuels.
South Carolina Solar Power Tax Credits
South Carolina has the nation’s 5th best solar tax credits
25% up to $3,500 or 50% of tax liability
How do state solar tax credits work?
State tax credits aren’t technically free money, but they are “credits” and not “deductions”. If you are taxed enough to take advantage of them, they are a 1-to-1 dollar amount off your taxes that erases a huge portion of the cost of installing solar panels.
(Keep in mind, we are not tax professionals and give no tax advice so please consult a professional before acting on anything we say.)