The Complete Guide to NC Solar Tax Credits

The Complete Guide to NC Solar Tax Credits

Solar incentives in North Carolina have changed throughout the years, but there are still plenty of credits for homeowners and businesses looking to invest in solar. While one of the most notable incentives is the federal solar investment tax credit, you can benefit from a variety of residential and commercial NC solar credits in 2023.

North Carolina also offers state-based incentives to make solar a worthwhile investment for residential and commercial property owners, including the federal tax credit, net metering and property tax exemptions. Learn more about the NC solar tax credits and incentives designed to help offset the costs of a solar investment.

Federal Solar Investment Tax Credit (ITC)

Residents and businesses in North Carolina can benefit from the ITC. The ITC helps support the growth of solar by offering a 30% tax credit to residential and commercial property owners who install solar. The tax credit reduces the dollar amount homeowners would have to pay to the federal government. The ITC is set to continue at 30% until 2032. In 2033, the tax credit will drop to 26% and 22% in 2034. Under current law, the tax credit will cease to exist in 2035.

NC residential solar tax credits allow homeowners to apply the ITC to their income taxes during the year they purchase and install solar. Homeowners who move into a newly built home with a solar system that they own outright can claim the ITC the year they move in.

The ITC works a bit differently for businesses than for homeowners. Commercial property owners can claim the tax credit under Section 48, which applies to businesses that install, finance or develop a new solar system. The credit starts at 30% like the residential credit but will change once the Treasury issue guidelines regarding apprenticeship and wage standard. Two months later, the credit will drop to 6%, but commercial businesses can qualify for an additional 24% for a total of 30% if they meet the new labor standards. 

Commercial products that started construction before December 31st, 2023, may qualify for the previous 26% or 22% solar tax credit if they start service before January 1st, 2026. The IRS has issued guidance to help commercial business owners determine whether they have begun constructing a qualifying solar facility for the ITC. To benefit from the commercial solar tax credit in NC, you have to follow the requirements under Section 48.

The ITC will also apply to the Tesla Powerwall. The Tesla renewable energy credits allow businesses and homeowners to balance out the costs of one of the best solar batteries on the market.

Solar Rebates in NC

Duke Energy offered one of the most significant solar rebates in North Carolina for residential and commercial solar systems, but the rebate program ended in 2022. Due to the number of applicants and limited funding, the program is unlikely to start again. However, the North Carolina Utilities Commission may offer upfront incentives to Duke Energy customers who install rooftop solar, which would replace Duke’s rebate program.

Asheville still offers a solar rebate on commercial and residential building permits that install solar systems. The local Development Services Department manages this program and helps businesses and homeowners counter the costs of their solar investment.

Property Tax Abatement for Solar in NC

Property Tax Abatement for Solar in NC

The property tax abatement has been available for solar installations in NC since 2008. Solar installations increase property value, but North Carolina has decided not to tax homeowners for the increase. For example, if your home value is $300,000, but your solar installation brings you to a home value of $330,000, North Carolina will only tax you for the $300,000 value.

Commercial property owners can also benefit from this abatement. However, business owners can only claim the abatement up to 80% of the property’s value as opposed to the 100% offered to homeowners.

North Carolina Solar Loans

Some companies offer loans to customers to help them finance a solar system. For example, Piedmont Electric Membership Corporation (PEMC) provides a special program to members to finance their solar systems up to $10,000 at 5% interest for seven years.

Electel Cooperative Federal Credit Union also offers energy-efficient loans at a low cost. Rates are fixed, and customers can receive 100% financing for the purchase price of the solar system, including installation and taxes. A maximum loan of up to $35,000 is available through this credit union.

North Carolina Net Metering

Net metering allows owners of solar systems to sell the excess energy their panels produce back to the grid. Selling your extra energy increases your overall savings and creates a credit you can use with your electric company when your solar system does not produce as much energy. Net metering is available in North Carolina for systems up to a capacity of 1,000 kW, covering residential systems and most commercial systems.

While you can use the credit you gained on your monthly utility bill, remember that it will expire at the start of the summer billing period. Installing a system of optimal size is recommended to ensure you can benefit from the credits you receive. You can enroll in net metering by contacting your utility company and completing an application.

Other Solar Incentives in NC

Some areas or companies in North Carolina offer specific incentives to their residents, businesses or customers. You can look into the particular programs in your area or through your chosen utility company and solar installer to find incentives you may be eligible for.

Another solar incentive worth mentioning is the NC WAP Community Solar Partnership program. This program aims to help low- to moderate-income residential customers afford solar systems. Qualifying individuals can receive cost-saving benefits and reduce their carbon emissions without paying to install a rooftop solar system. To be eligible, applicants must:

  • Live within the participating utility’s service range.
  • Be a homeowner or renter.
  • Live in a multifamily unit, mobile home or stick-built home.
  • Share proof of electric utilities in the applicant’s name.

You can research the incentives in your area to determine if there are additional ways to save beyond federal and state programs.

Trust 8MSolar to Help You Navigate NC Solar Incentives

Solar tax credits and incentives are constantly changing throughout North Carolina, which can pose a challenge for those looking to install a new solar system. We can help you navigate the changes to the 2023 NC solar tax credits and incentives to offset your investment costs and increase your savings. 

Whether you are a homeowner or a commercial business, we can help you determine your eligible incentives and apply for them. 8MSolar has been working in the solar industry since 2009. We have thousands of solar installations in our portfolio, giving us the experience and expertise to help you benefit from state incentives and install a reliable solar PV system. Contact us today to learn more about how we can help you benefit from solar incentives!

Trust 8MSolar to Help You Navigate NC Solar Incentives