South Carolina Solar Programs and Incentives: Complete 2025 Guide
The Palmetto State is rapidly becoming a solar powerhouse, driven by a combination of generous state tax credits, utility-led programs, and a favorable regulatory environment. This comprehensive guide details every available solar incentive, program, and regulation in South Carolina for 2025, helping homeowners maximize their savings and contribute to a cleaner energy future.
Federal Solar Investment Tax Credit (ITC)
Before diving into state-specific programs, it is crucial to understand the Federal Solar Investment Tax Credit (ITC), which provides the single largest incentive for solar adoption nationwide.
The ITC allows homeowners to deduct a percentage of the cost of their solar energy system from their federal taxes. For systems installed in 2025, the credit is set at 30% of the total system cost, including equipment, installation, and permitting [1]. This credit is non-refundable, but any unused portion can be carried forward to future tax years.
State-Specific Solar Tax Credits and Rebates
South Carolina offers one of the most attractive state-level incentives in the nation, significantly reducing the upfront cost of a solar installation.
South Carolina State Solar Energy Tax Credit
The state offers a generous tax credit for residents who install solar energy systems on their primary or secondary residences.
| Incentive Detail | Value | Requirements |
|---|---|---|
| Credit Percentage | 25% of the total system cost | System must be located in South Carolina and placed in service during the tax year [2]. |
| Maximum Annual Credit | $3,500 per facility or 50% of the taxpayer's state tax liability, whichever is less [3]. | The credit is applied against state income tax liability. |
| Carry Forward | Unused credit can be carried forward for up to 10 years [3]. | This allows taxpayers to fully utilize the credit even if their annual tax liability is low. |
| Application | Must complete and file SC tax form TC-38 with the state income tax return [4]. | The form is titled "Solar Energy, Small Hydropower, or Geothermal Tax Credit." |
This state credit, when combined with the 30% Federal ITC, can cover a substantial portion of the system's cost, making solar energy highly accessible to South Carolina residents.
Utility-Specific Rebates
While the state tax credit is universal, some utility companies offer additional rebates to their customers.
- Santee Cooper: This utility has historically offered some of the most significant rebates in the state, with programs that can provide up to $5,700 in incentives for solar installations [5]. Customers should check the latest program details directly with Santee Cooper, as these programs are often subject to funding caps and change annually.
- Duke Energy and Dominion Energy: As of early 2025, the major investor-owned utilities, Duke Energy and Dominion Energy South Carolina, do not offer general, up-front solar rebates to residential customers [6]. Their primary support comes through the Solar Choice Tariffs, which govern how solar power is credited (see Net Metering section below).
Utility Company Solar Programs and Net Metering
South Carolina's regulatory landscape for compensating solar homeowners underwent a significant shift with the passage of the Energy Freedom Act (Act 236) in 2019. This legislation phased out traditional net metering for new customers and introduced the Solar Choice Tariffs.
The Solar Choice Tariffs (Successor to Net Metering)
For solar systems interconnected on or after January 1, 2022, customers of Duke Energy Progress, Duke Energy Carolinas, and Dominion Energy South Carolina must enroll in the new Solar Choice Tariffs [7].
| Feature | Traditional Net Metering (Pre-2022) | Solar Choice Tariffs (Post-2022) |
|---|---|---|
| Compensation Rate | Full retail rate for all excess generation. | Avoided Cost Rate for net excess generation (NEG) [7]. |
| NEG Value | Approximately $0.02 - $0.03 per kWh (utility-specific avoided cost) [7]. | Approximately $0.02 - $0.03 per kWh (utility-specific avoided cost) [7]. |
| System Size Limit | 20 kW AC for residential. | 20 kW AC for residential [7]. |
| Eligibility | Customers who applied before May 16, 2019, may remain on the old tariff until December 31, 2025 [7]. | All new residential solar customers of the applicable utilities [7]. |
Under the Solar Choice Tariffs, the utility-specific avoided cost rate is significantly lower than the retail rate. For example, 2023 rates were around $0.0270 per kWh for Duke Energy Carolinas and $0.03363 per kWh for Dominion Energy South Carolina [7]. This change emphasizes the importance of self-consumption—designing a solar system to match the home's energy usage as closely as possible—and makes battery storage a more financially attractive option for maximizing savings.
Solar Rights and Regulations
Understanding the legal framework is essential for a smooth installation process, particularly concerning local regulations and homeowners' associations (HOAs).
Homeowners' Association (HOA) Restrictions
Unlike some states with strong "Solar Rights Acts," South Carolina does not have a comprehensive law that completely prohibits HOAs from restricting solar panel installation [11].
- Current Status: HOAs are generally permitted to impose reasonable restrictions on the placement, size, and appearance of solar energy systems, provided these restrictions do not effectively prohibit the installation or significantly increase the cost [12].
- Legislative Efforts: The South Carolina General Assembly has seen recent bills (such as Bill 4460 in the 2025-2026 session) aimed at strengthening solar rights and limiting the ability of HOAs to block solar installations [13]. Homeowners should check the latest status of these bills and review their HOA's governing documents carefully.
Permitting and Interconnection
The permitting process for solar installation is managed at the local level by county or municipal building departments.
- Building Permit: A local building permit is required to ensure the installation meets structural and electrical safety codes.
- Interconnection Agreement: After the system is installed and inspected, the homeowner must apply to their utility for an interconnection agreement. This is the formal process that allows the solar system to connect to the electric grid and begin operating under the Solar Choice Tariff. The utility will install a new meter capable of tracking both consumption and generation.
Tax Exemptions for Solar
South Carolina provides two key tax exemptions that further reduce the long-term cost of solar ownership.
Property Tax Exemption
South Carolina offers a property tax exemption for residential solar energy systems [14].
- Exemption Detail: The exemption ensures that the added value a solar system brings to a home is not included in the property's assessed value for tax purposes [15]. This prevents a homeowner's property taxes from increasing solely because they installed solar panels, providing a significant long-term financial benefit.
- Application: Homeowners must file a specific form (e.g., PT-401-I) with their county tax assessor to claim the exemption.
Sales Tax Exemption
Currently, South Carolina does not offer a general sales tax exemption for the purchase and installation of residential solar energy systems [16] [17]. While there have been legislative attempts to introduce such an exemption (e.g., Bill 651 in 2023-2024), they have not yet become law.
It is important to note that exemptions do exist for large, utility-scale solar facilities, but these do not apply to residential installations [18].
Low-Income Solar Programs
South Carolina is actively working to make solar energy accessible to all residents, regardless of income level, primarily through federal grant programs and utility initiatives.
South Carolina Solar for All (SCSFA)
The state is a recipient of funding from the U.S. Environmental Protection Agency's (EPA) Solar for All grant program, a $7 billion national initiative [8].
- Program Goal: The SCSFA initiative aims to fund solar projects that directly benefit low-income households and disadvantaged communities [9].
- Implementation: The program is expected to roll out in 2025 and beyond, focusing on reducing energy burdens for eligible households through solar leasing, power purchase agreements, and community solar subscriptions. Eligibility will be based on income thresholds and location within disadvantaged communities [9].
Utility-Led Low-Interest Loans
- Santee Cooper EmpowerHome Loans: Santee Cooper offers low-interest loans of up to $20,000 to qualifying customers. These funds can be used for various energy-efficiency upgrades, including the purchase and installation of solar panels [10]. This program provides a direct financing pathway for low-to-moderate-income customers.
Community Solar Programs
Community solar is an excellent option for South Carolinians who rent, have shaded roofs, or simply prefer not to install panels on their property. It allows customers to subscribe to a portion of a larger, off-site solar farm and receive credits on their electricity bill for the power generated by their share [20].
Several utilities and electric cooperatives offer community solar programs:
- Duke Energy's Shared Solar: Allows customers in Duke Energy Carolinas and Duke Energy Progress service territories to participate in community solar projects [21].
- York Electric Cooperative: Operates a community solar farm, allowing members to purchase a share of the array's output [22].
- Blue Ridge Electric Cooperative: Also offers a community solar option for its members [23].
Homeowners and renters should contact their specific utility or co-op to inquire about participation, subscription costs, and bill credit details.
Solar Renewable Energy Credits (SRECs)
South Carolina does not have a viable SREC market [19].
SRECs are tradable certificates that represent the environmental benefits of solar energy generation. They are typically created in states with a Renewable Portfolio Standard (RPS), which mandates that utilities source a certain percentage of their electricity from renewable sources. Since South Carolina does not have an RPS, there is no regulatory demand for SRECs, meaning homeowners cannot generate and sell these credits for additional income [19].
Solar Loan and Financing Programs
While the state does not offer a single, centralized solar loan program, South Carolina residents have access to a variety of financing options:
- Traditional Financing: Most homeowners utilize conventional financing, including home equity loans, home equity lines of credit (HELOCs), or refinancing their primary mortgage to include the solar system cost [24].
- Solar-Specific Loans: Many solar installers partner with financial institutions to offer dedicated solar loans. These loans are often unsecured and can be paid off over 10 to 20 years.
- Power Purchase Agreements (PPAs) and Leases: These third-party ownership models allow homeowners to install solar with $0 down. With a PPA, the homeowner pays a fixed rate per kilowatt-hour for the electricity generated. With a lease, the homeowner pays a fixed monthly fee. While these options do not allow the homeowner to claim the Federal ITC or State Tax Credit (the third-party owner claims them), they provide immediate energy savings [25].
Tips for Maximizing South Carolina Solar Incentives
To ensure you get the most out of your solar investment in South Carolina, follow these key steps:
- Prioritize Self-Consumption: Due to the lower compensation rate of the Solar Choice Tariffs, design your system to cover your home's energy needs during the day. Consider adding a battery storage system to store excess daytime energy for use during evening peak hours, maximizing the value of every kilowatt-hour generated.
- Claim Both Tax Credits: Ensure you have sufficient state and federal tax liability to take full advantage of the 30% Federal ITC and the 25% South Carolina State Tax Credit. Work with a qualified tax professional to file the necessary forms (Form 5695 for federal and Form TC-38 for state) and utilize the 10-year carry-forward provision for the state credit [2] [4].
- Verify Utility Rebates: If you are a Santee Cooper customer, check for current rebate programs before installation. If you are a Duke or Dominion customer, focus on the tax credits and the long-term savings from the Solar Choice Tariff.
- Check for Low-Income Eligibility: If applicable, monitor the rollout of the South Carolina Solar for All program and check for eligibility for the Santee Cooper EmpowerHome low-interest loans [9] [10].
- Review HOA Documents: Before signing a contract, thoroughly review your HOA's covenants and restrictions. If you encounter unreasonable restrictions, consult with a legal professional or contact the South Carolina Energy Office for guidance.
Contact Information for Key Resources
For the most current information on programs, regulations, and consumer protection, contact the following South Carolina organizations:
| Organization | Role | Contact Information |
|---|---|---|
| South Carolina Energy Office | State resource for solar information, financing, and consumer protection. | 1901 Main St., Suite 1500, Columbia, SC 29201 [26] |
| Office of Regulatory Staff (ORS) | Oversees utility regulation, including the Solar Choice Tariffs. | Phone: (803) 737-0800 [27] |
| Duke Energy Carolinas/Progress | Utility provider and administrator of the Solar Choice Tariff. | Contact customer service via their official website. |
| Dominion Energy South Carolina | Utility provider and administrator of the Solar Choice Tariff. | Contact customer service via their official website. |
| Santee Cooper | Utility provider and administrator of utility-specific rebates and loans. | Contact customer service via their official website. |
Conclusion
South Carolina offers a robust and evolving environment for solar adoption. The combination of the 30% Federal ITC and the 25% State Tax Credit provides a powerful financial foundation for any solar project. While the transition from traditional net metering to the Solar Choice Tariffs requires a strategic approach to system design, the long-term benefits of property tax exemptions and reduced energy bills ensure that solar remains a smart investment for the Palmetto State homeowner in 2025.
References
[1] U.S. Department of Energy. Federal Solar Tax Credit (ITC). [Source URL] [2] South Carolina Department of Revenue. SC tax form TC-38, “Solar Energy, Small Hydropower, or Geothermal Tax Credit.” [Source URL] [3] DSIRE. Solar Energy, Small Hydropower, and Geothermal Tax Credit. [Source URL] [4] Sundance Power Systems. South Carolina's 25% State Solar Tax Credit Explained. [Source URL] [5] Palmetto. South Carolina Solar: 2025 Costs, Incentives & Savings. [Source URL] [6] EnergySage. South Carolina Solar Incentives, Tax Credits & Rebates 2026. [Source URL] [7] DSIRE. Net Metering (Solar Choice Tariffs). [Source URL] [8] Clean Energy States Alliance. Solar for All – Public Information. [Source URL] [9] Energy Funds for All. Low-Income Solar for All. [Source URL] [10] Santee Cooper. Low-Interest Loans - Energy Efficiency Loans. [Source URL] [11] Firefly Solar. HOA Solar Panel Laws in VA, NC, SC, and GA in 2024. [Source URL] [12] South Carolina Energy Office. Working with HOAs. [Source URL] [13] South Carolina Legislature. 2025-2026 Bill 4460: HOA - Solar Panels. [Source URL] [14] Sundance Power Systems. 2025 Solar Panel Incentives in South Carolina: What's New. [Source URL] [15] South Carolina Department of Revenue. PROPERTY TAX EXEMPTION APPLICATION FOR.... [Source URL] [16] Solar Action Alliance. Solar Panels for South Carolina Homes: Tax Incentive &.... [Source URL] [17] Solar Reviews. Tax Exemptions For Home Solar Power - How To Save On.... [Source URL] [18] South Carolina Department of Revenue. SC Private Letter Ruling #15-1. [Source URL] [19] SRECTrade. South Carolina - SREC Markets. [Source URL] [20] South Carolina Energy Office. Community Solar. [Source URL] [21] Duke Energy. Shared Solar. [Source URL] [22] York Electric Cooperative, Inc. Community Solar Farm. [Source URL] [23] Blue Ridge Electric Cooperative. Community Solar. [Source URL] [24] South Carolina Energy Office. System Financing. [Source URL] [25] Sunrun. South Carolina Solar Financing. [Source URL] [26] Office of Regulatory Staff - South Carolina. State Energy Office. [Source URL] [27] South Carolina Energy Office. Who to Contact with Issues and Questions. [Source URL]