How to Save Money on Solar Panels In South Carolina

Solar panels on a background of blue sky with a flagpole and the flag State of South Carolina

How to Save Money on Solar Panels In South Carolina

Key Points

  • South Carolina produces nearly 3% of its electricity through solar energy sources despite the lack of state-level support for renewable infrastructure.
  • Homeowners in South Carolina can save up to $30,000 over 25 years with solar panels.
  • Residents of South Carolina can lease solar panels and still save money on electricity, even though it disqualifies them from the federal solar tax credit.

The Palmetto State produces nearly 3% of its electricity through solar energy sources. This is huge, considering there’s hardly any state-level support for renewable infrastructure. There’s something tricky going on here, meaning homeowners can save big with solar panels in South Carolina.

With plenty of benefits and incentives, where should you start? South Carolina offers its own tax return, rebates, and more. The state even has an updated net metering policy, all without renewable standards. Keep reading to learn more about what’s going on here.

How to Save Money on Solar Panels In South Carolina: Overview

Simply by looking at the cost, it’s easy to consider solar panels in South Carolina. The Palmetto State has some of the lowest equipment rates in the country, as well as excellent sunlight. These two aspects counteract high electricity bills, with some homeowners saving nearly $30,000 over 25 years.

Now, you might think that’s where the benefits end; after all, South Carolina has one of the weakest renewable standards in the country. However, residents of the Palmetto State have access to quite a few solar programs. 

After the federal credit, South Carolinians can utilize a solid state tax return, a decent rebate, and updated net metering. Let’s take a closer look at these programs.

Solar Panels in South Carolina: Federal Incentive

One of the most influential incentives for saving money on solar panels in South Carolina is the federal solar tax credit. This nationwide program offers a 30% return on all solar purchases, which include equipment and storage, labor, and sales tax. Those installing a 6kW system can cut the cost by over $4,500.

Not anyone can take advantage of this incentive, however. To qualify, you’ll need to own your system, either by purchasing it outright or through a loan. You also need to live in the house where the equipment is installed, and all of it must be new.

You have plenty of time to use the federal solar tax credit, but don’t wait forever. The program starts to taper off in 2033 and it drops to 26% and 22% the following year. Unless it’s renewed or extended, the program terminates in 2035.

South Carolina’s State Credits and Rebates

rooftop with solar panels and yellow flowers at south germany springtime sunny day
Homeowners can save even more on solar panels in South Carolina with state tax credits, rebates, and more.

Alongside the federal solar tax credit, homeowners in South Carolina have access to the state equivalent. The Palmetto State offers a 25% return on all solar purchases, which you can deduct from your income taxes for up to 10 years. For a 6kW system, this means an additional $3,700.You can subtract this from your state income as much as $3,500 or 50% of your state tax liability (whichever is less) at a time. This means you could receive your entire benefit in just two years.

Now, if you’re a customer of the Santee Cooper utility company, you can also receive a solar rebate. The program offers $950 per kW for up to $5,700. So if you purchase a 6kW system, you’ll max out your rebate. These are hefty savings, but it’s important to know that benefits like these apply before tax credits, essentially reducing their value. However, it’s still more savings overall.

Financial incentives don’t end here. In 2019, the Palmetto State updated its net metering regulations, lifting the capacity utilities had to purchase. Now, customers can sell all of their excess solar power, which rolls over as a credit to next month’s bill. Any leftover credits at the end of the year are sold to the utility company at the avoided-cost rate. This typically sits around 2-3 cents per kW. While this isn’t a huge return, it’s still something.

Solar Panels in South Carolina: Government Regulations

Frankly, it’s strange to see major incentives such as credits and rebates in South Carolina, especially when you consider their weak renewable portfolio standards (RPS). Generally, we use a state’s RPS to determine its intention to invest in future clean energy. However, South Carolina seems to be the exception.

The Palmetto State has a voluntary RPS, meaning utilities aren’t fined if they don’t meet standards. And, South Carolina only strives for 2% of its power to come from clean sources. Furthermore, the RPS expired in 2021, meaning there’s no regulation on renewable technology.

All that said, the state seems to be pressing forward with solar energy. This suggests that change is occurring at the utility level, which is a good thing. Power companies recognize the value of switching, even if it means building new infrastructure.

Should South Carolinians Lease Solar?

In some states, residents can lease solar panels as an affordable option to make the switch. The decision disqualifies their system from incentives such as the federal solar tax, credit. However, it can still save them money on electricity, even with lease payments.

South Carolina is one state that offers solar leasing. It has multiple programs to connect residents with resources. And with high traditional power rates, some can save over $100 a year on power. It’s one place where solar leasing is worth it.

Solar Panels in South Carolina: Incentive Summary

Federal Tax Incentive30% credit
State Tax Credits / Rebates25% credit / $950 per kW (Santee Cooper)
Net MeteringMonthly credit at avoided cost rate
Renewable Portfolio Standard2% by 2021 (expired)
Property Tax ExemptionNone 
Sales Tax ExemptionNone 
Performance Payment ProgramNone 

Frequently Asked Questions

Do you actually save money by going solar in South Carolina?

South Carolina has great equipment costs and excellent sunlight, making it ideal for solar energy. And with high electricity bills to offset, homeowners can save nearly $30,000 or more over 25 years.

How long does it take for solar panels to pay for themselves in South Carolina?

With an annual electricity bill of $1,782.36 to offset the cost of installation for a 6kW system, residents in South Carolina could have it totally covered in 8.4 years. However, it’s important to know that some homeowners may need more wattage than average.

How much do solar panels cost in South Carolina?

South Carolinians can expect to spend about $2.49 per watt on solar energy. This equals around $14,940 for a 6kW system before incentives.

Can I use the federal tax incentive in South Carolina?

South Carolinians can utilize the federal solar tax credit to cover 30% of their installation costs. Those installing a 6kW system could save over $4,500.

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