Getting solar panels for your home is a big decision, and learning about the process can sometimes be confusing. Our mission is to make installing solar easier to understand, so we’ve written this guide for homeowners to learn about solar power in South Carolina.
The page below covers the cost of solar panels in South Carolina, incentives that can help reduce that cost, how much money you can save in the long run with solar, and state solar laws that set rules for you and your utility company.
The latest on South Carolina Solar
In May of 2019, Governor H.R. McMaster signed the South Carolina Energy Freedom Act, which allows homeowners to install solar and save on their electricity bills!
There are great incentives for going solar in South Carolina, including both state and federal tax credits, which combined can save you up to half the cost of installing solar panels.
This page last fact-checked: 07/23/2019
How to go solar in South Carolina
Figuring out the best way to go solar in South Carolina can be a little daunting. Don’t worry! We’ll help you figure it out.
Here are the three things you need to know:
- How much solar panels cost in South Carolina, and SC solar incentives that can reduce that cost
- How much money you can save with solar in South Carolina
- The best way to pay for a solar installation
Ready for help? We’ve got solar experts in South Carolina that can guide you through this process. They know all about the laws and incentives and can give you solar quotes for cost and savings.
Connect with SC solar power experts today.
South Carolina Solar Panel Cost
The average homeowner in South Carolina can get solar panels installed for $3.10 per watt after the national and state solar tax credits.
A full solar installation for the average South Carolina home can make 11.4 kilowatts of electricity under full sun, and will cost about $35,000 to buy outright. Solar loans and other billing arrangements are available.
That cost might seem high, but think of a solar installation as an investment in future energy savings. Solar pays it’s cost back and also increases the value of your home.
The cost of a solar installation is 70% lower than it was 10 years ago, but incentives that reduce the cost expire soon! Of course, solar panels aren’t just something you spend money on—they save you money, too!
Electricity Bill Savings from Solar Panels in South Carolina
The chart above shows our projections for electricity bill savings with solar over the 25-year life of the average solar panel installation. The 3 colors in the chart represent the different ways to pay for solar, discussed below.
The average solar installation in South Carolina saves its owner about $1,800 per year on electricity bills. The difference in the colored bars in the chart above has to do with how you pay: Green bars represent a cash payment, orange bars represent a solar loan. The third way to finance solar panels, represented by the blue bars above, is called a Power-Purchase Agreement, where the solar company owns the panels on your roof and sells you the electirity for cheaper than your old power bill.
Solar loans and cash purchases pay off their cost and end up making you money.
In the end, a solar purchase in South Carolina will save you more than you spend. The difference is that with a loan, you don’t have throw down thousands of dollars in cash, but you do still get the full tax credits available. Loans are a perfect way to get into solar without the up-front costs.
- Estimated average 25-year savings for a cash purchase in South Carolina: $42,800
- Estimated average 25-year savings with a solar loan in South Carolina: $29,400
Solar loans front-load your savings, and allow you to pay over time as you offset your electricity costs. We think they’re a win-win, but they don’t work for everyone. For example, if you’re on a fixed income and can’t claim the tax credits, a PPA might be a better option.
Find your best solar payment option below:
South Carolina Solar Policy Information
Ever wonder why solar seems to be everywhere in some states, but not in others? We did too.
State legislatures and public utilities commissions can enact rules to make solar power accessible for everyone. Favorable rules explain why some of the cloudiest states—New York, New Jersey, and Connecticut, are doing so well with solar, and yet some of those with the most natural solar resources—like Alabama, Mississippi, and Georgia—are doing so poorly.
Below is important information about the public policy, rules, and economic reasons that affect your ability to go solar here in South Carolina:
South Carolina's Renewable Portfolio Standard
2% by 2021
A Renewables Portfolio Standard (RPS) requires utilities in the state to eventually source at least a certain percentage of their electricity from clean, renewable sources like solar panels. We know it says "South Carolina has no RPS" above, but that's not technically true.
South Carolina’s RPS, passed in 2015, requires all utilities to produce a measly 2% of their aggregate capacity using renewable energy by 2021. The RPS divides the requirement into two sections: 1% of the capacity will be generated by facilities sized between 1 MW and 100 MW, while the remaining 1% will be generated by any facility below 1 MW. That ain’t much, but a mandate is a mandate.
Here's where we knock South Carolina’s RPS, because the 2% goal is basically moot. As of 2018, the state got 6% of its energy from renewable sources. Other states are aiming twenty times higher within the same timeframe. Additionally, South Carolina's program lacks a solar carve out. More on that next.
A strong South Carolina RPS would be critical to strong renewable energy policy. Utility companies aren't really all that gung-ho about you producing your own power. After all, it costs them money when you use less of their electricity. They also don’t naturally want to give you big payments for energy you're feeding back into the grid. The main reason the utilities are aiding your transition to lower electric bills and offering you incentives to put solar on your roof is because the state forces them to. If the utilities don't hit their RPS numbers, they have to pay large fees back to the state.
South Carolina's RPS solar carve out
As mentioned above, South Carolina’s RPS lacks a solar carve out, or specified targets for solar production. If the RPS contained specific carve-outs for clean and efficient technologies like solar panels, or mandates for the environmentally necessary increases in distributed generation, you’d see even stronger incentives for residential solar power.
South Carolina Electricity Prices
South Carolina homeowners pay an average of 13 cents per kilowatt-hour (kWh) of electricity. That’s actually a little lower than the national average of 13.6 cents, but here's the kicker: South Carolinians have some of the nation's highest electric bills, because we've gotta use so much AC in the summer and heat in the winter! But the good news is, though you're paying more now, you could be saving more soon, with solar panels!
And the vast majority of the electricity that currently (no pun intended) runs your house is produced by burning fossil fuels -- tons and tons of earth-killing fossil fuels. When the astronomical environmental costs start to mount, monthly electricity bills are inevitably going to rise as well. When that happens you’re going to feel pretty darn smart for making the early switch to producing your own clean, efficient solar power.
South Carolina Net Metering
Statewide with caveats
Net Metering requires your utility to monitor how much energy your solar power system produces and how much energy you actually consume, and make sure you get credit for the surplus.
In April of 2014, South Carolina’s legislature mandated the development of new statewide net metering rules. These new rules state that residential net metering customers can install systems up to 20 kW in capacity and that these systems must be installed to meet all interconnection and safety standards. In turn, the utility is responsible for monitoring your production and crediting your surplus generation to you. In South Carolina, utilities must roll over your monthly excess generation to the next month and pay you for your annual excess at the end of the year.
The 2014 legislation provided a cap on net metering when solar reached of 2% of total generation. That cap was nearly exceeded in early 2019, when the legislature passed H.3659, which lifted the cap on net metering through June 1, 2021, directed the utilities to review and propose new community solar programs, and directed the state's public utilities commission to study a successor program to net metering.
We'll keep an eye on those PUC proceedings, and report any proposed changes to South Carolina's programs in this space.
South Carolina Interconnection Rules
South Carolina has standardized interconnection policies providing a "streamlined application process" for small generators (less than 20kW DC) as set forth in the state Public Service Commission's Docket No. 2015-362-E (PDF link).
The rules outline the responsibilities of both solar system owner and utility company. The require additional liability insurance to be purchased by the system owner, as well as an external disconnect switch to be installed and perpetually available to the utility. These aren't the most ideal, gold-standard provisions, but they're also not too onerous.
All-in-all, we'd prefer to see the rules a bit more streamlined, but South Carolina does a pretty decent job here. The streamlined process and rules for small system owners (i.e. homeowners) is about as good as you could expect. Worthy of a solid "B".
Solar Incentives in South Carolina
Next to high electricity prices and net metering, solar incentives have traditionally been the most important factor for whether home solar power makes financial sense in a state. In the past, some states with otherwise lousy policy had tremendous incentives that drove down the up-front cost of going solar so much that homeowners could save oodles of money even without net metering or a good RPS.
These days, the big incentive most people can get is the Federal Solar Tax Credit that earns you 30% of your total system costs back after just 1 year. State incentives play less of a role than in the past, but some really good ones are still out there, ready to help homeowners go solar and save money before you know it.
Let's see how South Carolina measures up:
The availability of state solar incentives for residential solar systems was sourced from the Database of State Incentives for Renewables and Efficiency, state utility company websites, and the official solar website of the South Carolina Energy Office.
South Carolina Solar Power Rebates
$600+ per kW, Santee Cooper only
Only one South Carolina utility has their own rebate program: Santee Cooper. If your house is in their service area, you can get a rebate of up to $1,200 per kW, which is just under half off the average cost of installation! The Santee Cooper Home Solar Rebate can earn you up to $7,000 off the cost of a solar system (rebate applied up to 6-kW of solar panels).
We say "up to" because Santee Cooper is offering its rebates on a tiered payout. If fewer that 150 homeowners sign up, the payout is $1,200 per kilowatt of panels. If between 151 and 200 participants sign up, the payout is $900/kW. Any more than that and the payout is $600.
Just to be clear, the "C" grade listed above is reflective of the relative lack of rebate programs in the state. If we were to award the Santee Cooper program with a grade, it would be a good, solid "B+"! If your home is served by Santee Cooper, get a solar estimate today and find out how much you could save.
South Carolina Solar Tax Credits
25% of costs, max of $3,500 or 50% of tax liability per year
While the state legislature has dropped the ball on the RPS, they’ve scored a slam dunk with South Carolina’s Solar Energy Tax Credit. When you install a residential solar power system here, you’re entitled to claim a state tax credit of 25% of the purchase and installation costs. That’s a whole lot of taxes you won’t be paying in April. The maximum credit that can be applied in a single tax year is $3,500 or 50% of your state tax liability, whichever is less. Unused credit may be carried forward for 10 years. Score for South Carolina!
Here's an example of how the South Carolina tax credit works: Say you're a married couple making $75,000/yr. Your income tax for 2018 will be $3,271, and half of that is $1,636. Your 5-kW solar system costs $16,250, meaning you're eligible for a state tax credit of $4,063 (25% of the cost). You take the max in year 1, $1,636, and assuming your income is roughly the same in year 2, another $1,636 in year 2. That leaves you with an unused tax credit of $791 that you can take in year 3.
Don't forget: All solar installations are eligible for a 30% tax credit from the Feds as well. There's no cap on the federal tax credit and fortunately for South Carolina, having no state rebate to deduct means a larger tax credit coming your way. The two tax credits combined can wipe out 55% of the costs to install solar in just a few short years. Combined with electric bill savings, South Carolinians can see a payback time of just 7 years for a standard 5-kW solar system. Wow!
South Carolina Solar Performance Payments
$0.04/kwh - SCE&G only
Despite the lack of a decent RPS, there happens to be a pretty nice performance payment plan here—if you live in South Carolina Electric & Gas territory, that is...
Performance payments are a way to reward solar panel owners for producing clean energy. They are small payments made directly to you based on the number of kilowatt-hours (kWh) your system produces. In the case of the SCE&G Customer Scale Solar Program, that means 4 cents/kWh, or about $250 per year for a typical 5-kW solar system.
That's good money! Trouble is... we don't know how long it'll last. The incentive amount is scheduled to drop by a penny each time the state see a couple new megawatts (MW) of energy capacity installed. That could be a year, two years, or three years. Here's how the payment amounts change based on the total installed capacity:
- 0 to 2.5 MW cumulative capacity: 4 cents per kilowatt hour
- 2.5 to 5 MW cumulative capacity: 3 cents per kilowatt hour
- 5 to 7 MW cumulative capacity: 2 cents per kilowatt hour
- 7 to 9 MW cumulative capacity: 1 cent per kilowatt hour
Again, no one knows when those levels will be hit, but we've conservatively estimated it'll two or three years for each level. Over a time horizon of 9 years, we estimate the performance payments will put around $1,500 into the pocket of our example 5-kW system owner.
Now that's if you're served by SCE&G. If, instead, you're a Duke Energy Customer, you get a really sweet rebate program that'll reduce your up-front solar costs to the tune of $1,000/kW! Look above to find out more about it!
Property Tax Exemption
Unfortunately the lawmakers down in Columbia didn’t follow up that excellent tax credit with tax exemptions. Property tax exemptions have the potential to save you a lot of cash. When you install a solar power system, your home goes up in value. We’ll go over just how much in a minute, but we’re talking thousands, and usually double digits at that. Not paying property taxes on that value is like a gift that keeps on giving, and passing a statewide exemption for assessed home value from solar power systems would help you make the switch without ever taking a dime out of the state’s bank account. Sounds like a win-win to us.
Sales Tax Exemption
In addition to ongoing property tax exemptions, the sales taxes exemptions that we’ve seen in lots of other states would save you 6% on the cost of a solar power system here. Unfortunately, the equivalent sales taxes exemption that many states have passed is a big fat 0% of the way there. As in, there is no sales tax exemption for the purchase and installation of solar power systems here. That’s a real shame. Sales tax exemptions help the local solar industry in addition to the customer, so they’re a double win.
The final word on South Carolina solar panels for homes
While we’re happy to see some unanimous support for home solar from the legislature, we’d like to see some more codification of that support (i.e., South Carolina lawmakers should pass some laws to protect solar owners and require renewable energy!).
Still, solar can help with South Carolina’s sky-high electric bills, and the state’s solar tax credit is among the best in the nation. With the federal solar tax credit ebbing away after 2019, there’s never been a better time to go solar in the Palmetto State.