Your 2020 guide to getting solar panels for your home in South Carolina
This page is a complete guide to the complicated and sometimes confusing process of installing solar panels on your South Carolina home. Since there's a lot to consider, we've separated the page into sections to help you find what you are looking for. If you find this page useful, please share it with someone who might also find it interesting!
** What's new for 2020 **
Palmetto State lawmakers passed a monumental solar bill in 2019, which lifted the state’s net metering cap and protected the right of homeowners to generate and sell their own electricity! Read on to find out how much you can save with solar in 2020.
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.
Questions? Our network of solar experts are on call to assist you. Simply sign up for personalized assistance on our special solar deals page. You can get discounted on-grid pricing as low as $4,000/kW! This is paired with the South Carolina solar incentives you see below.
What you'll find on this page:
The Solar Strategy section is focused on the 3 ways of paying for solar in South Carolina, so you can decide which is best for you. We've created a tool that asks you a few questions and recommends whether you should pursue a solar lease, loan, or outright purchase. Then, we provide detailed analysis of how each works.
The Policy Information section contains all our latest research on the rules set by lawmakers and the Public Utilities Commission, which determine how easy it is to go solar in South Carolina. These policies and rules govern everything from renewable energy mandates to interconnection, and have a huge effect on the viability of solar.
Finally, the Solar Incentives section includes information about money-back rebates and grants, tax credits, and tax exemptions for going solar in South Carolina.
Click any of the boxes below to go to that section of the page, or scroll down to read the page in order.
|Your South Carolina Solar Strategy|
|South Carolina Solar Policy Information|
|South Carolina Solar Incentives|
|Your South Carolina Solar Strategy|
|Comparing Solar Investment Options|
|Paying Cash for Solar in South Carolina|
|Solar Loans in South Carolina|
|Solar PPAs in South Carolina|
|Solar Purchase Payback Time in South Carolina|
|South Carolina Solar Policy Information|
|Renewable Portfolio Standard (RPS)|
|RPS Solar Carve-Out|
Your Solar Strategy in South Carolina
Figuring out the best way to go solar in South Carolina can be a little daunting. From loans and leases to power-purchase agreements, there are a lot of options out there. To help you pick the one that might be best, we've created the handy decision tool below.
We'll ask you a few simple questions about you and your home. Once you're done, we'll recommend a good option. Further down this page, we provide cost estimates and example return-on-investment calculations for all the various options:
How to pay for 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:
Option 1: Paying cash for solar
An outright purchase used to be the only way to get solar, and it's still the option that provides the "biggest" financial returns. The reason we put "biggest" in quotes here is because it's technically true—with rebates and tax credits, solar costs less than ever before, and the electricity savings in South Carolina are so good that a solar installation pays itself off in just a few short years. But if you're interested in solar as an investment, taking a loan to pay for the system is a better option.
With a loan, you can monthly payments instead of putting $11,650 down on a solar system, which means you save money on electricity as you pay down the cost of your panels. If you have equity in your home or can get a large loan with an interest rate of 4.5% or less, a loan is the option to go with. It's like being able to start a business that is sure to succeed, just by having a roof. Read about loans below.
If you've got cash and you prefer to pay up front, you'll have to plunk down $11,650, but tax breaks and energy savings will erase a bunch of that after just 1 year. Over 25 years, your system will have produced over $21,000 in income, after your system cost is paid back. The reason this works is that solar offsets your electricity costs—enough to save you $725 in year 1—and it just goes up from there. As the electric company raises rates, you save more and more, and more...
For our example, we've focused on South Carolinians who are served by Duke Energy Progress. That's because DEP offers rebates of $1 per kilowatt (kW) of solar panels. That's a sweet rebate, and it reduces your initial cost for a 5-kW system from $16,650 to just $11,650.
If you get service through South Carolina Electric & Gas instead of Duke, you don't get a rebate, but you do get performance payments, which will save you about $1,500 over the first 10 years!
Here’s how the numbers work for a 5-kW rooftop solar system in South Carolina:
- Installing a typical 5-kW solar system should start at about $11,650 after the Duke Energy rebate. That's cheaper than solar has ever been, but it still might seem like a big investment. Don’t worry, because after tax breaks and energy savings, your first-year costs will be considerably less than that.
- The Federal government offers a great income tax credit of 30% of system costs. That's $3,495 you won't be paying to Uncle Sam this year, and it brings your first-year investment down to $8,155.
- Next, South Carolina offers its own amazing personal tax credit, that can get you up to 25% of the cost of your system back. The credit can be taken over 10 years, and it has a maximum of $3,500 or 50% of your tax burden in a year. Considering South Carolina's low income tax rate, we'll be conservative, and estimate a tax credit of $500 each year for 7 years. That brings you down to $7,455!
- After the tax credit we subtract your first year’s energy savings, which we estimate to be $725. That reduces your cost after the first year to only $6,930. That's almost 60% off the price before rebate! Wow!
- Those electricity savings and state tax credits will quickly make your money back, and your system will pay for itself in just 7 years. You'll see a total net profit of $21,027 by the end of your panels' 25-year warranty. The internal rate of return for this investment is an amazing 16.6%. That beats the stock market's traditional returns by a good 5%, and it's more reliable, too!
- And here's a nice bonus to consider: your home's value just increased by more than $16,000, too (your expected electricity savings over 20 years).
- In addition to all that cash (and home value), you’ve created some green for the earth as well by not using electricity from fossil fuels. It's like planting 113 trees a year, every year your solar power system is humming.
Keep in mind, the numbers above are based on an average home in South Carolina. If you're ready for a custom quote for a solar panel system, our network of experts are on call to assist you. Simply sign up for personalized assistance on our special solar deals page.
Option 2: Using a loan to pay for solar
You don't need $15,000 sitting around to pay for solar. As long as you have equity in your home, you can still own solar panels and reap all the benefits. Heck, even if you do have the cash, getting a loan to pay for solar is by far the best option when it comes to percentage return on investment.
That’s because, in South Carolina, using a loan to pay for solar is like investing in a business that's sure to succeed, and also earns you a tax break. Wait... TWO tax breaks!. You'll come out thousands ahead this year, and you'll still see a handsome profit over the 25-year life of your system.
For our example, we've focused on people who are served by Duke Energy Progress, which offers a really nice rebate of $1/watt, based on the size of your system. Sorry SCE&G customers. There's no rebate program for you, but there are some decent performance payments! And no rebates doesn't mean solar isn't a good deal! It just means it'll cost you a little more...
A solar purchase like this will make sense for you if the following is true about you and your current situation:
- You can qualify for a solar loan or home-equity line of credit (HELOC) for $11,650, with a fixed rate of 4.5% or lower and a 15-year repayment period. Don't be put off if you're offered a higher rate. It just means a tiny bit less of the thousands of dollars you'll make with solar.
- You love making money without much risk.
Here’s how the numbers pencil out for a South Carolina homeowner who makes a solar purchase with a loan:
- Installing a typical 5-kW solar system should start at about $11,650 after that Duke Energy Progress rebate we discussed above. That's how big your loan will need to be to cover it.
- The electricity you'll save in the first year of operation would have cost $725, but your annual loan payments will be $1,034, meaning you would spend $309 on solar this year, but...
- You'll also see two huge tax breaks! The Feds give you 30% of the cost of your system back as an income tax credit, which in this case means $3,495. South Carolina also offers a rebate of 25%, but the state's tax rate is lower, so you'll likely have to take the credit over a longer term. That's another $500 off this year, and for the next 4 years, too.
- All those incentives mean you'll come out $3,686 ahead after year 1. Your loan payments will be about $26/month more than your energy bill savings, but that difference will get smaller as the utility company raises rates every year. And considering that big windfall in year 1, you'll never actually spend any of your own money on solar.
- By the time you've paid off your loan in 2031, you'll be seeing yearly savings of about $1,100. After 25 years, your total profit will be $17,165!
- On top of the green that will stay in your pocket, your system will mean green for the environment, too—101 trees-worth, every year!
Keep in mind, the numbers above are based on an average home in South Carolina. If you're ready for a custom quote for a solar loan, our network of experts are on call to assist you. Simply sign up for personalized assistance on our special solar deals page.
Option 3: Buying the electricity, not the panels with a Power Purchase Agreement (PPA)
A PPA is a great way to go solar if you haven't got stacks of cash or oodles of equity in your home. It's possible to get solar panels for $0-down and see big savings over 20 years!
As for PPAs in South Carolina: the electricity costs here are pretty high—right around the national average. That means a PPA saves you money starting on day 1! For now, the electrciity you'll buy from a PPA will be around $617 per year, but the energy the panels make will save you $725 per year. That's $108 you get to keep in your pocket, just for saying yes to solar!
That might not sound like a huge amount of money right now, but as the utility company raises rates, you will start to see greater annual savings. Over 20 years, our estimate shows a total savings of $3,648. And the panels will be owned and maintained by the installation company, so all you have to do is brag to the Joneses down the street about your green habits!
Here's more about how a solar PPA works:
Keep in mind, the numbers above are based on an average home in South Carolina. If you're ready for a custom quote for a solar PPA, our network of experts are on call to assist you. Simply sign up for personalized assistance on our special solar deals page.
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 Solar carve-out and SRECs
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
Full retail residential net metering is good for home solar systems up to 20 kW in capacity. 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.There is no cap on net metering until June, 2021, so it’s a good idea to go solar until then to make sure you’re entitled to all your credits when you generate more solar than you use during the middle of the day with a home solar system here in South Carolina. Utilities are in the process of reviewing and proposing a successor program to net metering. It’s most probably not going to be as favorable to homeowners as what’s in place now.
Duke Energy has also begun a fast track program for smaller solar systems like you’d install on your home to be connected to the grid. It has a $500 application fee, and requires an external disconnect (which is probably unnecessary).
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".
South Carolina Solar Incentives
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 26% 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, utility company websites, and the state public utility commission.
South Carolina Solar Power Rebates
Santee Cooper used to offer a huge solar rebate, but that program has been exhausted. Luckily, the cost of solar has dropped by almost 60% over the last 5 years, so request quotes from local solar installers to see how much you can still save with solar and how much your investment will cost.
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 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. Wow!
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.
Low-income Solar Programs
Grade: FLearn more about low-income solar programs available in the U.S.
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 already reduced from 30 to 26 percent, there’s never been a better time to go solar in the Palmetto State.