North Carolina Solar Power Rebates, Tax Credits, and Incentives

Solar Legislator Score:

From the Great Smoky Mountains down to Cape Fear on the Atlantic coast, North Carolina has a natural environment to be proud of. With everything from golf to wineries, the great outdoors is part and parcel of living in the Tar Heel state. Don’t forget those Carolina blue skies, either. How has the state been protecting this environment by promoting renewable energy sources such as solar power? Check out the steps they’ve been taking to clean up North Carolina’s energy market.

STATE LEGISLATION

North Carolina has been doing fairly well with promoting clean power over the past few years. In August 2007, North Carolina overhauled its renewable energy rules with Senate Bill 3, which authorized tax credits for solar power generation. Senate Bill 3 also requires that the state generate at least 12.5% of its power from renewable sources by 2021. That’s not a phenomenal percentage, but then North Carolina is the first state in the Southeast to adopt a renewable energy standard, so kudos to the legislature for being first into the water.

NET-METERING

In October 2005 the Utilities Commission laid out rules for net-metering by investor-owned utilities in North Carolina; the order was amended in 2006. Maximum system capacities were set at 20kW for residential customers and 100kW for businesses. The utilities are only required to enroll 0.2% of the last year’s peak load, meaning that new systems are subject to a first-come, first-served allocation plan until 2018 when this becomes the minimum. Net excess power generated is credited back to the user on the next monthly bill. At the beginning of each summer season, any credit for net excess generation is granted to the utility. The North Carolina Utilities Commission only wants individuals to develop electrical generation systems that meet their own personal or corporate needs. Lastly, the net-metering program requires that customers switch to time-of-use metering.

STATE INCENTIVE PROGRAMS, UTILITY REBATES, UTILITY LOANS, AND UTILITY INCENTIVES

Renewable Energy Tax Credits

In 2007, when the legislature passed Senate Bill 3, tax credits became available to both residential and corporate customers in North Carolina. The credit covers up to 35% of the cost of a solar electricity or other renewable energy system, capped at $10,500 for residential systems and a whopping $2.5 million for commercial and industrial systems. Residential customers get that credit all in one year unless the total is more than 50% of their tax liability. If so, the rest of the credit is spread over 5 years. Businesses are required to take their credit over 5 years.

One really cool feature of Senate Bill 3 is that you can also take a tax deduction for a donation to a non-profit organization that is working on a renewable energy project. This is a great way to get people on the clean power bandwagon!

Check out these other great solar rebates and solar incentives for renewable energy in North Carolina:

Corporate Tax Credit

* Renewable Energy Tax Credit - Corporate

Green Building Incentive

* Asheville - Building Permit Fee Waiver

Personal Tax Credit

* Renewable Energy Tax Credit - Personal

Production Incentive

* NC GreenPower Production Incentive

* TVA - Green Power Switch Generation Partners Program

Property Tax Exemption

* Active Solar Heating and Cooling Systems Exemption

State Loan Program

* Energy Improvement Loan Program

Utility Loan Program

* Brunswick EMC - Residential Energy Efficiency Loan Program

* Carteret-Craven Electric Cooperative - Energy Conservation Loan Program

* Piedmont EMC - Conservation Loan Program

* Progress Energy Carolinas - Energy Efficiency Financing Program

* PSNC Energy - Residential Energy Efficiency Loan Program

* South River EMC - EC Home Improvement Loan Program

Utility Rate Discount

* Dominion North Carolina Power - Energy Saver Home Plus

* Duke Energy - Energy Star Homes Rate Discount Program

* Four County EMC - All Electric Rate Reduction Program

* Progress Energy Carolinas - Energy Efficient Home Program

* Randolph EMC - Energy Efficient Rate Discount Program

Utility Rebate Program

* Blue Ridge Mountain EMC - Energy Right Residential Program

* Cape Hatteras Electric Cooperative - Energy Efficient Water Heater Rebate Program

* City of Gastonia Electric Department - Energy Efficient Water Heater Rebate Program

* City of New Bern Electric Department - Energy Management Rebate Program

* City of Statesville Electric Utility Department - Residential Energy Efficiency Rebate Program

 

* An interesting article on leasing solar in North Carolina

EXAMPLE 3KW SYSTEM – HOME INSTALLATION COST

Installing a typical 3kW solar electricity system in Charlotte would cost around $54,000. However, with a state solar rating of Good, the system should generate plenty of power to pay for itself in a short time. After taking federal and state tax credits as well as a great $0.20/kWh rebate (dispersed over the life of the system), the overall cost can be under $10,000! With that rebate, your system should pay for itself in about 1-5 years! On top of all that savings, you will be keeping tons of greenhouse gasses out of the atmosphere and saving nearly $100 a month on your utility bills!

Building Type:	Residential
State & County:	NC – Mecklenburg
Utility:	Duke Energy Corporation
Utility Type:	Investor-Owned Utility
Assumed Average Electric Rate: Please check against your bill	$0.0847 /kWh
Assumed Average Monthly Electricity Usage: Please check against your bill	1,300 kWh/Month
Your Average Monthly Electricity Bill: (Assumed rate x average monthly usage)	$110 /Month
Tiered Rates Apply:	No
Time-of-Use Metering Offered:	No
Net-Metering Available:	No
ESTIMATED SYSTEM SIZE The system size best for your situation will vary based upon product, building, geographic and other variables. We encourage you to work with a Solar Pro who can better estimate the system size best for your situation. We estimate your building will need a system sized between 4.80 kW and 7.20 kW of peak power. This estimate assumes the mid-point of this range.
Solar Rating:	Good (4.987 kWh/sq-m/day)
Solar System Capacity Required:	6.00 kW of peak power (DC watts)
Roof Area Needed:	600 sq-ft
ESTIMATED SYSTEM COST This is only an estimate based upon many assumptions. Installation costs can vary considerably. We encourage you to work with a Solar Pro who can provide you with a more detailed cost estimate. We estimate that a 6.00 kW peak power system will cost between $43,200 and $64,800. This estimate assumes the mid-point of this cost range.
Assumed Installation cost: (before rebates, incentives or tax credits).	$54,000 assuming $9 /watt
Expected Duke Energy Corporation Utility Rebate:	($0)
Expected NC State Rebate ($0.2/kWh produced for 25 years. The total shown will be dispersed over 25 years in accordance to actual energy produced by your PV system)	($39,000)
NC State Tax Credit/Deduction (35% of net system cost – Maximum of $10,500)	($5,250)
Federal Tax Credit: (Installation type: Residential)	($2,000)
Income Tax on Tax Credit:	$1,470
YOUR ESTIMATED NET COST:	$9,220
Monthly Payment (6.5% apr, 30 years):	$58
SAVINGS & BENEFITS
Increase in Property Value:	$11,440
Exempt from Property Tax:	YES
Accelerated (5 yr) Depreciation: (Installation type: Residential )	No
First-year Utility Savings: Since this is not a business application, these savings are in after tax dollars. So, your realized savings may actually be higher!	$572
Average Monthly Utility Savings: (over 25-year expected life of system)	$80
Average Annual Utility Savings: (over 25-year expected life of system)	$960
25-year Utility Savings:	$24,002
Return on Investment (ROI): (with Solar System avg. cost set as asset value)	640%
Return on Investment (ROI): (with Property appreciation set as asset value)	516%
Years to Break even: (Includes property value appreciation)	< 1 year
Years to Break even: (Assuming no property value appreciation)	6 years
Greenhouse Gas (CO2) Saved: over 25-year system life	160.0 tons (320,000 auto miles)

CONSENSUS

When compared to their neighbors in the Southeast, North Carolina has been doing great things to promote solar power and other clean energy sources. Most of the real work that has been done by the legislature has come in the last couple of years. 2007 was a breakthrough year for renewable energy in the state, but it’s not time to rest yet. North Carolina could become a model for the rest of the Southeast if state leadership continues to build up a market for solar power.

Click here to have multiple solar installers bid to upgrade your North Carolina home or business.