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Many states are becoming more solar-friendly as every year passes. And each state has different tax incentives and rebates for homes and businesses getting a new solar energy system.
Compared to other states, North Carolina does not have as many local incentives. However, combing the state and local rebates with the federal ones can put a solar system within the financial reach of many North Carolina homeowners.
The cost to go solar in North Carolina is slightly less than the national average. While the cost per watt is lower, it also costs less because North Carolina gets plenty of sun and therefore needs fewer solar panels to generate the same amount of energy as states with less sunshine. On average, North Carolina homeowners pay around $12,000 to $25,000 before any rebates or incentives.
Besides the Federal tax incentive, North Carolina offers a few rebates and local tax incentives that can make a solar system more financially available. But, the most significant discount is the Federal Solar Tax Credit.
Along with reducing your energy bills, solar is an excellent way to reduce your environmental impact. Plus, you can provide the electricity you don’t use back to the power grid and get credit back from your utility company with net metering.
The Tar Heel State gets plenty of sun throughout the year, averaging 205 sun-filled days per year. This means North Carolina homeowners don’t have to get as many solar panels to collect the energy they need to power their homes. As such, solar systems cost a bit lower in North Carolina, ranging from $12,000 to $25,000, depending on the system size and energy usage.
Even though North Carolina is not the most solar-friendly state, it does have several convenient rebates, like property tax exemptions, net metering, and the Duke Energy Solar Rebate. All these incentives help get the cost of solar power down to a reasonable level.
Due to the local, state, and federal incentives, most North Carolinians are saving several thousands of dollars on new photovoltaics (PV systems). Along with these tax rebates, North Carolina residents have many other initiatives they can access to reduce the cost of their clean energy system even more.
|Federal Solar Tax Credit (ITC)||Oregon residents receive the Federal Solar Tax Credit and up to 26% provided back in their next federal tax return. If the solar system costs $20,000, you get a federal credit for $5,200 when you file your taxes. But, you have the total cost (minus other state rebates) upfront.||December 31st, 2023 (reduces to 22%, expires in 2024)|
|Duke Energy Solar Rebate||North Carolina customers of Duke Energy can receive a cash incentive for installing a solar system.||None|
|Financing Program for Renewable Energy and Energy Efficiency||A previous North Carolina law set revolving loan programs for cities and counties. It set a maximum interest rate of 8% and a maximum term of 20 years. However, this program is now expired as of 2022.||N/A|
|Net Metering||Net metering allows homeowners to use excess solar energy as a credit on their next power bill. All North Carolina power companies provide net metering.||None|
|North Carolina Property Tax Incentive||Your property taxes don’t go up when you install a solar energy system. Instead, your property taxes are based on the previous value of your home.||None|
Before signing a contract with a solar installation company, do plenty of research first. Some incentives and rebates have the necessary steps to ensure you get the incentive or rebate. Following all the requirements is the best way to ensure you get the entire incentives and rebates.
Every state, including North Carolina, is eligible for the Federal Solar Investment Tax Credit (ITC). The ITC gives homeowners and businesses a discount on their solar system on their next federal tax return. For residents, the program has a maximum
discount of 26%, which you pay upfront, but receive as a credit on your next federal tax return. So, you have to have the cash up front or get a solar loan, but you’ll get the money back in a year or less.
North Carolinians should know that the Federal Solar Investment Tax Credit is reducing from 26% to 22% at the end of 2023. It will then go away completely in 2024 unless Congress votes to extend it. The reduction and eventual elimination of the federal tax credit is a great reason to install a solar system soon. Remember, you can combine many incentives, including the ITC, to reduce your costs as much as possible.
Like many other solar-friendly states, North Carolina offers its residents and businesses an exemption from sales tax when they purchase a solar energy system. This means North Carolinians can save a few thousand dollars by not paying an extra 4.75% state sales tax.
Whether you’re adding a solar panel system to your home or business, the value it adds to your property is exempt from sales tax. Normally, home improvement upgrades will raise your property’s value and, therefore, your yearly property taxes. However, your property taxes won’t go up since North Carolina has a solar power system property tax exemption. While this doesn’t save you money on the upfront cost, it helps you build equity in your home without adding to a recurring expense.
Although North Carolina has very few solar rebate programs, it does offer its residents a generous net metering program. When a residential solar system produces more energy than the home can use, the excess electricity is sent back to the power grid from the inverter. Residential customers will then receive a retail credit on their next energy bill for the extra solar power they provide to the utility company. This is beneficial on cloudy days and at night when the solar system doesn’t produce energy.
Duke Energy customers in North Carolina have eligibility for the utility company’s incentive program. However, their funding ran out quickly in 2021 and 2022, so you may have to join a waiting list for this year or next.
However, qualifying residents that purchase a new solar electric system receive $400 per kW with a cap at 10 kW or $4,000.
Solar rebates provided by energy companies can change quickly. So to see Duke Energy’s progress and current NC solar rebates, check out their website.
North Carolina used to have a revolving loan policy that caps the interest rate on loans from solar companies for homes and businesses. However, the program ended in 2022. The low-interest loan had a cap of 8% and a 20-year term. This loan policy also applied to other renewable energy technologies like wind turbines, geothermal heat pumps, and hydroelectric systems.
These loan limitations gave many homeowners and businesses access to solar power much sooner than they could otherwise afford. However, with solar’s decreasing costs and other incentives, this program ended.
Along with North Carolina residents, businesses also have access to various state and federal solar incentives. And it is usually easier for them to get subsidies. Since solar panel systems large enough for businesses are more costly, there is also more room for savings.
North Carolina does not offer any solar incentives specifically for nonprofits. However, plenty of government and private savings plans help nonprofit organizations, which they can use for a solar system. Additionally, nonprofits and businesses are eligible for the ITC and Duke Energy rebates.
The United States Department of Agriculture (USDA) offers financial assistance to agriculture producers switching to renewable energy systems, including solar with its Rural Energy for America Program (REAP). It helps North Carolina producers with loan financing.
REAP also helps small businesses in rural areas obtain solar systems, not just farmers. Through REAP, these small businesses don’t have to negotiate their own funding. All they have to do is submit their project plan and contact details to the USDA. Then, REAP will apply to all the available grants for them.
North Carolina businesses are also eligible for the ITC. But instead of the 26% that residential customers receive, businesses get even more– a 30% tax credit towards the cost of a solar energy system. Since businesses generally require larger and more expensive systems, this can quickly provide savings in the tens of thousands of dollars range.
The Federal Solar Tax Credit is the most significant discount on a solar system for North Carolina businesses. However, the tax incentive won’t be around forever– it is due to drop from 30% to 10% in 2023 and expire entirely in 2024. If you own a business in North Carolina and want to go solar, the time to do so is now.
North Carolina does not have as many state-level solar incentives as otter states. However, its residents and businesses still have plenty of rebates and incentives available to significantly lower the cost of a new solar energy system. Since a PV system is a major financial decision, pairing the ITC with state and local rebates makes it an easier choice.
The cost to go solar has been trending down and should continue to do so. However, the federal solar incentives are lowering and expiring in the next few years. So taking advantage of this large rebate now would provide the best net cost to homeowners and businesses.
Yes, solar is a great investment in North Carolina. The state gets plenty of sunshine year round. Residents can receive the 26% federal tax credit, an additional credit from Duke Energy, and pay zero sales tax. Although solar panels increase the value of homes, with North Carolina’s property tax exemption, homeowners won’t see any increase in their yearly property tax bills. Besides the incentives, a solar system significantly reduces energy bills and your carbon footprint.
How much your electric bill decreases depends on the size of your solar system, the amount of sun you get, and your home’s energy consumption. However, most homes and businesses in North Carolina see their energy bills drop 60% to 80% most months. On particularly sunny months, they may produce enough energy to offset all the electricity they use.
Over the last 10-15 years, solar panel systems have significantly decreased in cost. They are more affordable than ever, but the average cost in North Carolina is still between $12,000 and $25,000. However, after various solar incentives, the net cost is lower– around $8,500 to $18,000 (depending on system size).
No, you can’t get solar for free in North Carolina. Various solar leasing programs or power purchase agreements (PPAs) may make their service appear “free,” but that isn’t the case. Instead, you are paying for the panels through the lease while not having access to any incentives since you don’t technically own the solar system.
North Carolina has various solar rebates available to its residents. The most significant is the Federal Solar Investment Tax Credit of 26% for residential systems and 30% for businesses. Additionally, North Carolina has a solar property tax exemption and a sales tax exemption for businesses and homeowners.
Duke Energy, a major utility company, also provides a solar system rebate to North Carolina residents. However, the program has limited funding, so you must apply to a waiting list.
There are no good statistics to show how many North Carolina homes have solar panels. However, we do know that the state has enough solar panels to provide 80 MW of power, which is enough to power over 9,000 North Carolina homes. With the generous tax incentives and solar’s decreasing costs, the number of solar systems will only increase.
No, a solar system does not increase property taxes in North Carolina due to the state’s property tax exemption. This means the value of your home will increase, but your property taxes will not. So, if your home was worth $400,000 before you installed a solar system and $423,000 after you installed it, your property taxes will use $400,000 as the value basis (and not $423,000).
North Carolina does not have any write-offs for solar panels. However, you can claim the 26% credit of the cost of your solar system on your federal tax filing.
At House Method, transparency and trust are our most important values for the reader. That’s why we took the time to create an objective rating system and score each solar energy company/service according to our methodology.
Our research team dug deep into the fine print of contracts, combed through more than one hundred customer reviews, and thoroughly investigated all of each solar energy company’s services, costs, and products. We’ve done the homework for you by researching nearly all of the solar energy companies on the market so you can have the information you need to make the best choice for your home.
We developed a formula to objectively determine the best solar energy companies and give each a score out of 100 based on the following criteria:
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