North Carolina Solar Programs and Incentives: Complete 2025 Guide

The Tar Heel State is rapidly becoming a solar powerhouse, driven by strong federal support and unique utility-specific incentives. North Carolina homeowners and businesses have access to one of the nation's most substantial financial incentives—the federal Investment Tax Credit—alongside a valuable state property tax exemption and a unique utility rebate program for solar-plus-storage systems. However, navigating the state's recently updated net metering policies and the evolving landscape of low-income solar programs requires careful planning. This comprehensive 2025 guide breaks down every available solar incentive, program, and regulation to help you maximize your investment and contribute to North Carolina's clean energy future.

1. Federal and State Financial Incentives

While North Carolina’s state-specific tax credit has expired, the combination of federal support and a key state-level property tax exemption makes solar ownership highly attractive. Understanding these core financial mechanisms is the first step in calculating your total savings.

The Residential Clean Energy Credit (Federal ITC)

The most significant financial incentive for North Carolina residents is the Residential Clean Energy Credit, formerly known as the Solar Investment Tax Credit (ITC). This is a federal tax credit, not a deduction, which directly reduces the amount of income tax you owe, dollar-for-dollar.

The Inflation Reduction Act (IRA) of 2022 significantly extended and enhanced this credit, setting it at 30% of the total cost of your solar energy system, including equipment, installation, and labor. This rate is locked in for systems installed and placed in service through 2032 [1].

Key Details of the 30% ITC:

• Eligibility: Applies to new residential solar PV systems, solar water heaters, wind energy, geothermal heat pumps, and, crucially, battery storage systems with a capacity of at least 3 kilowatt-hours (kWh), even if installed separately from the solar system [1].
• No Cap: There is no maximum dollar limit on the credit amount.
• Carryforward: If the credit exceeds your federal tax liability in the year of installation, you can carry the remaining amount forward to future tax years.
• Ownership Requirement: You must own the system (either outright or through a solar loan) to claim the credit. Leased systems or Power Purchase Agreements (PPAs) are generally ineligible for the homeowner.

North Carolina Solar Property Tax Exemption

North Carolina offers a substantial property tax incentive to encourage solar adoption. State law provides an 80% property tax abatement for the appraised value added to your home by a solar energy system [2].

Solar panels increase a home's value, which would typically lead to higher property taxes. This exemption ensures that 80% of that increased value is shielded from taxation. For example, if a solar system adds $20,000 to your home's assessed value, only $4,000 (20%) of that increase will be subject to property tax, protecting you from a significant tax hike while still benefiting from the increased home equity.

State Tax Credits and Rebates (Expired)

It is important to note that the state-specific North Carolina Renewable Energy Tax Credit for residential systems expired on January 1, 2016. While this credit is no longer available, the combination of the 30% Federal ITC and the 80% Property Tax Exemption remains a powerful financial package for solar investors in the state.

Sales Tax Exemption Status

Unlike some other states, North Carolina does not offer a state-wide sales tax exemption for residential solar energy equipment [3]. This means that the state and local sales tax will apply to the purchase and installation of your solar system. However, since the Federal ITC is calculated on the total system cost, including sales tax, a portion of this expense is effectively recovered through the federal credit.

2. Utility Company Solar Programs and Net Metering

North Carolina’s utility landscape is dominated by Duke Energy (Duke Energy Carolinas and Duke Energy Progress), which offers a significant rebate program and operates under a recently overhauled net metering policy.

Duke Energy PowerPair Rebate Program

The Duke Energy PowerPair Program is a key incentive for North Carolina residents, specifically targeting the adoption of solar paired with battery storage [4]. This program offers a one-time, upfront rebate to offset the cost of installing a new solar PV system and a qualifying battery storage system.

PowerPair Incentive Structure (Up to $9,000):

Program Requirements:

• Solar + Storage: The incentive is primarily for systems that combine solar and battery storage.
• Demand Response: Participants must agree to allow Duke Energy to remotely control the battery during peak demand events (known as a demand response or grid-optimization program). This helps the utility manage the grid and reduces the need for costly peak power generation.
• Limited Capacity: The PowerPair program operates with limited capacity and is often subscribed quickly. Homeowners should apply as soon as possible after deciding to install a system.

The New Net Metering Policy: Residential Solar Choice

North Carolina’s net metering policy underwent a significant overhaul, with the new rules taking effect in late 2023. The old "Legacy Net Metering" (Rider NM) is no longer available to new customers. Instead, new residential solar customers of Duke Energy must choose between two new rate structures: the Net Metering Bridge (NMB) rate and the Residential Solar Choice (RSC) rate [5].

Legacy Net Metering (Rider NM)

Customers who interconnected their systems before October 1, 2023, are grandfathered into the Legacy Net Metering rate until December 31, 2026. After this date, they will transition to the NMB rate for up to 15 years, and then finally to the RSC rate.

Net Metering Bridge (NMB) Rate

• Availability: Available to new customers who apply for interconnection before October 1, 2027, or until the program capacity is fully subscribed.
• Structure: This rate is designed as a transitional option. It allows customers to receive a bill credit for excess energy exported to the grid, compensated at the utility’s avoided cost rate (the rate the utility avoids paying to generate that power).
• Lock-in: Customers on the NMB rate can remain on it for 15 years from the date of their interconnection request.
• Fees: Features a non-by-passable charge and a minimum monthly bill.

Residential Solar Choice (RSC) Rate

• Availability: Open to new customers indefinitely.
• Structure: Requires the customer to be on a Time-of-Use (TOU) rate schedule. This means the price of electricity varies depending on the time of day and the season.
  • On-Peak: Highest price (e.g., 6 am to 9 am and 6 pm to 9 pm during summer).
  • Off-Peak: Moderate price.
  • Discount: Lowest price (e.g., late night/early morning).
• Compensation: Excess energy exported to the grid is compensated at the avoided cost rate, similar to NMB.
• Fees: Includes a non-by-passable charge, a minimum monthly bill, and a grid access fee based on the size of the installed system.
• Maximizing Savings: The RSC rate heavily incentivizes the use of battery storage to shift consumption and export to high-value TOU periods, or to simply store solar power for use during the expensive on-peak hours.

Note on SRECs: North Carolina does not currently operate a state-wide Solar Renewable Energy Certificate (SREC) market. While RECs are generated by solar systems, under the new net metering rules, residential customers are generally allowed to retain the RECs generated from their system under both the NMB and RSC rates. These RECs can potentially be sold on the voluntary market, though this is often handled by the installer or a third-party aggregator.

3. Low-Income and Community Solar Programs

North Carolina is making strides to ensure solar energy is accessible to all residents, particularly low-income and disadvantaged communities, through new federal funding and state-mandated community solar initiatives.

The EnergizeNC Solar for All Program

The most significant low-income solar initiative is the EnergizeNC Solar for All Program, led by the North Carolina Department of Environmental Quality’s State Energy Office.

• Funding: In April 2024, the EnergizeNC coalition was awarded a substantial $156 million grant from the U.S. Environmental Protection Agency’s (EPA) Solar for All program [6].
• Goal: The program aims to deploy at least 43 megawatts of residential solar and associated storage, benefiting over 12,500 low-income and disadvantaged households across the state. The goal is to achieve at least a 20% reduction in home energy bills for participating families.
• Launch Status: The program is currently in the planning and design phase, with an anticipated launch in late 2025.
• Uncertainty: As of August 2025, the program faced a potential setback, with the NC DEQ reviewing a letter from the EPA regarding the possible termination of the Solar for All funding [7]. While the state is actively fighting to retain the funding, prospective participants should monitor the official EnergizeNC website for the latest status and application details.

Community Solar Programs

Community solar allows multiple customers to subscribe to a shared solar facility and receive credits on their electricity bills for the power generated. This is an excellent option for renters, those with shaded roofs, or those who cannot afford a full rooftop system.

• State Mandate: North Carolina General Statute 62-126.8 requires utilities to file plans to offer community solar energy facility programs.
• Duke Energy Requirement: House Bill 589 mandates that Duke Energy Carolinas and Duke Energy Progress offer a combined total of 40 MW of community solar capacity [8].
• Subscriber Rules: State rules require each community solar facility to have at least five subscribers, with no single subscriber holding more than a 40% interest.
• Compensation: Participants are typically compensated at the utility’s avoided cost rate for the energy generated by their share of the community solar facility.

4. Solar Rights, Regulations, and Permitting

Understanding the legal framework and regulatory environment is crucial for a smooth solar installation process in North Carolina.

Solar Rights and Homeowners Associations (HOA)

North Carolina has strong solar access laws designed to protect a homeowner's right to install solar energy systems.

• The NC Solar Access Act (2007): This law states that a homeowners association (HOA) or other planned community governing body "shall not prohibit, or have the effect of prohibiting," the installation of solar panels [9].
• Reasonable Restrictions: While an HOA cannot ban solar outright, they are permitted to impose "reasonable restrictions" on the placement, size, and appearance of the system. These restrictions must not significantly increase the cost of the system or decrease its efficiency. For example, an HOA may require panels to be placed on the rear roof slope if it does not compromise the system's performance by more than 10%.
• Dispute Resolution: If a dispute arises, the homeowner can appeal the HOA's decision. The law is generally interpreted in favor of the homeowner's right to install solar.

Permitting and Interconnection

The process for installing a solar system involves two main regulatory steps:

1. Local Permitting: You must obtain electrical and building permits from your local city or county building department. This ensures the system meets local safety and structural codes.
2. Utility Interconnection: After installation, the system must be inspected and approved by the utility (e.g., Duke Energy) before it can be connected to the grid and begin operating under the chosen net metering rate. This process involves submitting an interconnection application and receiving a "Permission to Operate" (PTO).

Other Financial Regulations

• Property Tax Exemption (Recap): As noted, the 80% property tax exemption is a permanent state law that protects homeowners from increased property taxes due to solar installation.
• SRECs (Recap): North Carolina does not have a mandated SREC market.

5. Tips for Maximizing Your Solar Incentives

To ensure you capture every available dollar of savings, follow these strategic tips:

Tip 1: Prioritize Solar + Storage

The Duke Energy PowerPair rebate is a significant, one-time incentive that is only available for solar systems paired with battery storage. Given the new Time-of-Use (TOU) net metering rates (RSC), a battery is an essential tool for maximizing your savings by storing cheap midday solar power and using it during expensive evening peak hours. By combining the 30% Federal ITC on the entire system (solar + battery) with the PowerPair rebate, the net cost of a battery system can be dramatically reduced, making the investment much more financially viable.

Tip 2: Act Quickly on Net Metering

The Net Metering Bridge (NMB) rate, which offers a 15-year lock-in, is only available until October 1, 2027, or until its capacity is fully subscribed. Homeowners who want the most stable, long-term rate structure should prioritize installing their system and submitting their interconnection application well before this deadline. The Residential Solar Choice (RSC) rate is more complex and requires active energy management to maximize savings.

Tip 3: Leverage Federal Tax Credits for Other Efficiency Upgrades

The Inflation Reduction Act also offers other tax credits that can be combined with the solar ITC to further reduce your energy costs. The Energy Efficient Home Improvement Credit (25C) offers up to $3,200 annually for qualifying energy efficiency improvements like heat pumps, insulation, and energy-efficient windows and doors. Combining these upgrades with solar can create a highly efficient, low-cost energy home.

Tip 4: Choose a Reputable Installer

A local, experienced installer will be intimately familiar with the specific requirements of the Duke Energy PowerPair program, the nuances of the NMB and RSC net metering applications, and the local permitting process. They can also advise on the optimal system size and orientation to maximize energy production under the TOU rate structure.

6. Contact Information for Key Resources

For the most current and official information, contact the following key resources:

Conclusion

North Carolina offers a dynamic and rewarding environment for solar investment in 2025. While the state tax credit is a thing of the past, the powerful combination of the 30% Federal ITC, the 80% Property Tax Exemption, and the lucrative Duke Energy PowerPair rebate for solar-plus-storage systems provides a compelling financial case. The new net metering rules, particularly the Time-of-Use structure, emphasize the value of battery storage and smart energy management. By staying informed about the latest program capacities and acting decisively, North Carolina homeowners can secure substantial savings and enjoy decades of clean, reliable energy.

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References

[1] U.S. Department of Energy. Residential Clean Energy Credit (Solar ITC). https://www.energy.gov/eere/tax-credits/residential-clean-energy-credit

[2] North Carolina General Assembly. G.S. 105-275(45) - Property Tax Exemption for Solar Energy Equipment. https://www.ncleg.gov/EnactedLegislation/Statutes/PDF/BySection/Chapter_105/GS_105-275.html

[3] EnergySage. North Carolina Solar Incentives, Tax Credits & Rebates. https://www.energysage.com/local-data/solar-rebates-incentives/nc/

[4] Duke Energy. PowerPair Program. https://www.duke-energy.com/home/products/powerpair

[5] NC Sustainable Energy Association. Understanding Solar Net Metering Changes Impacting Duke Energy Customers. https://www.energync.org/blog/understanding-solar-net-metering-changes-impacting-duke-energy-customers/

[6] NC Department of Environmental Quality. Solar For All | NC DEQ. https://www.deq.nc.gov/energy-climate/state-energy-office/inflation-reduction-act/solar-all

[7] EnergizeNC. EnergizeNC Program Update - August 2025. https://energizenc.com/program-update

[8] DSIRE. North Carolina Community Solar Rules. https://programs.dsireusa.org/system/program/detail/22467/north-carolina-community-solar-rules

[9] NC General Assembly. G.S. 22B-20 - Solar energy rights. https://www.ncleg.gov/EnactedLegislation/Statutes/PDF/BySection/Chapter_22B/GS_22B-20.pdf

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