South Carolina solar rebates and incentives: 2024 guide

South Carolina’s beautiful beach weather makes for more than just luxurious summer vacations – it’s also a great state for solar. Thanks to year-round sunshine and great solar incentives, homeowners in the Palmetto State can save thousands when they install a solar panel system on their roof, and drastically reduce if not eliminate their energy bills.

If you're considering going solar in South Carolina, we have good news: Some great incentives can substantially improve your return on investing in solar panels. The combined federal and state tax credits take a whopping 55% off the cost of installation, and customers of Santee Cooper will get further rebates of several thousand dollars.

Residential Clean Energy Credit

The Residential Clean Energy Credit, formerly known as the federal investment tax credit (ITC), can reduce your solar panel system's cost by 30%. Your entire system, including all the equipment, labor, permitting, and sales tax, qualifies for the ITC.

When you file your taxes, you can claim this incentive as a credit towards your federal tax bill. Just keep in mind that to qualify for the ITC, you need to purchase your system either with cash or a solar loan–if you lease your system, you won't be eligible. 

You also need a high enough tax bill, though you can roll over any remaining credit year-to-year until the end of 2034 when the ITC expires. The only time you might be eligible for a direct payment for the ITC is if you're a tax-exempt entity, like a nonprofit organization.

South Carolina state tax credit

This is another huge solar tax credit that you can stack on top of the federal solar tax credit. Homeowners who install solar can claim a state tax credit of 25% of the total system cost, up to a total credit of $35,000. A typical residential solar panel system costs much, much less than what it takes to hit that upper threshold—but most installs will be eligible for a credit of several thousand dollars.

You might need to carry the credit forward over multiple years. That is, you might not get it all back in one big lump sum after you file taxes next spring. Each year, a taxpayer is only eligible to receive $3,500 of that credit, or 50% of their state tax liability, whichever is less. The carry-forward period lasts 10 years. 

So how long will it take for the average person to claim their full credit? It really depends on individual circumstances, but it’s likely that for most residential systems, it’ll be in the 1- to 5- year range.

Santee Cooper utility rebate

South Carolina’s public utility company, which serves more than 10% of the households in the state, offers substantial solar rebates for their customers. They’ll give you back $0.95 cents per watt of installed capacity, if you work with an approved contractor. So for a 5,000 watt (5 kW) system, that means a rebate for $4,750.

South Carolina’s other major utilities, Dominion and Duke, do not offer solar rebates as of early 2024.

In addition to the big rebates and tax credits above, South Carolina also offers a solar property tax exemption. Going solar typically will most likely increase your home’s property value—but you will not be taxed on that bump in value.

If you connect your solar panel system to the grid, you’re eligible for net metering. In most states, net metering is one of the best incentives for solar owners because it lets you earn credits for extra solar power that you send to the grid. You can draw against those credits later, when the sun isn’t shining.

South Carolina’s policy technically lets you do those things, but with some big caveats that make it a lot less favorable for consumers than many net metering policies.

• To qualify for net metering, you’ll need to enroll in a time-of-use rate plan with your electric utility. That is, you’ll have to switch to a plan where the cost of electricity changes depending on the time of day. During off-peak hours, energy is quite cheap. On peak, each kWh is 2.5 to nearly 5 times more expensive, depending on the utility company. (During the summer, off-peak hours are night time through midday, while in the winter, it’s midday through the early morning. Peak rates line up with when most people will be running their energy-hungry AC or heater.)  

• Your solar credits get tallied within each time-of-use period—basically the time of day. If you produce energy during off-peak hours, then you’ll accrue credits that can be used only during off-peak hours—when energy costs between just $0.06 and $0.11 cents.

• Energy credits do not roll over from month to month, but get converted to cash credits at a poor rate. Depending on the utility, it’s typically $0.02 to $0.04 cents per kWh—a small fraction of the typical on-peak rate, which is typically $0.26 to $0.30 cents per kWh. In most states with net metering, the summer months are like a bonanza for solar owners because that’s when you stockpile credits for the fall and winter, when the sun doesn’t shine enough to cover all your energy use. But in South Carolina, you’re getting paid so little for your excess energy compared to what the utility will charge you later, that the credits won’t stretch very far into the less-sunny parts of the year. A solar battery might help you squeeze more value out of your solar panels under this crediting scheme—more on that shortly.

South Carolina doesn't offer any state-specific battery incentives, besides a property tax exemption (the same one that applies to solar arrays). However, all batteries above 3 kWh in size are eligible for the 30% federal tax credit. 

In South Carolina, solar batteries can make good financial sense because of the unfavorable terms of the state’s net metering program. It’s in your best interest to hoard as much of your solar power as possible during off-peak hours (instead of sending it to the grid at a discounted rate), then using it to power your home during on-peak hours (instead of buying electricity from the grid at inflated rates). 

Your strategy will have to change a bit with the seasons, but most solar batteries have scheduling features that’ll let you automate this step after an initial setup—something that your solar installer might be able to help you with.

And of course, you can use your solar battery as a backup power source when the ground goes down.