North Carolina solar incentives, tax credits and rebates

Resources for going solar in 2024

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house with porch with solar panels on roof

The average cost for a solar energy system is $13,815 in North Carolina after the full federal solar investment tax credit, which is cheaper than in many other states. The national average is $16,715.

North Carolina has an abundance of solar incentives compared with some nearby states, like Kentucky. You also can save a lot of money going solar with the tax breaks, rebates and loan programs offered locally.


Key insights

  • The average federal solar tax credit value is $5,921 in North Carolina.
  • You can take advantage of solar tax breaks, rebates and loan programs in the state.
  • North Carolina homeowners with solar panels see estimated net savings of $20,035 over 25 years.

Solar incentives in North Carolina

The federal solar investment tax credit (ITC) is the biggest factor in reducing the cost of going solar in North Carolina. If you install a residential solar panel system by the end of 2032, you will receive a federal income tax credit equal to 30% of the system's total cost, including equipment, labor and permits.

The federal solar investment tax credit (ITC) drops to 26% in 2033 and 22% in 2034.

For example, the average system costs $19,736 in North Carolina. On a system of this price, you can get a $5,921 credit when you file your taxes.

The solar tax credit is not a rebate or refund — you must claim it when you file federal taxes in the year that your solar panel system becomes operational. To do this, you have to complete Form 5695. The credit is also nonrefundable: Any unused portion rolls over into the next tax year.

Residential solar incentives in North Carolina

North Carolina residents can take advantage of tax breaks, rebates and loan programs. Plus, Catawba County gives residents a 25% to 50% permit fee reduction when they apply for permits on solar systems and solar water heaters.

Tax breaks

North Carolina offers a property tax abatement to homeowners who use solar photovoltaics and solar thermal electric technologies. The state exempts 80% of the appraised value of a "solar energy electric system" (also known as a photovoltaic, or PV, system) from property taxes.

» MUST-KNOW: The tax benefits of owning a home: deductions and secrets

Solar water heater rebates

There are two solar rebates you can take advantage of in North Carolina. If you’re a customer of Four-County EMC, you may qualify for a $1,000 rebate on a solar water heater. Customers of South River EMC can get a $200 rebate on solar water heaters.

Solar loan programs

There are four ways to get solar financing in North Carolina. Not all apply to solar panels.

  • Lumbee River: Members of the Lumbee River Electric Membership Corporation (LREMC) can get low-interest loans through the ElecTel Cooperative Federal Credit Union to help pay for solar projects. The loans are capped at $35,000.
  • Haywood: Haywood EMC members can borrow 100% of the total cost of their solar heat pump through the ElecTel Cooperative Federal Credit Union.
  • Piedmont Electric: Piedmont Electric Cooperative’s Energy Efficiency and Renewable Energy Loan Program gives customers the chance to get a solar loan for up to $10,000 at 5% interest for a term of seven years.
  • Randolph Electric: Members of the Randolph Electric Membership Corporation (Randolph EMC) can qualify for a solar loan for up to $35,000 with an interest rate starting at 4.9%.

What to know about net metering in North Carolina

Some homeowners opt to store their excess solar energy in solar batteries. Others decide to sell it to their local power company. This is called net metering.

In North Carolina, electric companies pay you for your solar power with credits toward your bill. In some states, you can cash in unused credits at the end of 12 months, but here, your credits are forfeited. Think of it as a use-it-or-lose-it situation.

New net metering rules changed how many residents are paid for their energy production. Duke Energy, one of the major utility providers in North Carolina, initiated a pilot program that introduced different fees for new customers who installed solar systems after Oct. 1, 2023. Existing Duke Energy customers will continue to get their current rates until Sept. 30, 2027.

The change aims to encourage more solar adoption but has some uncertainty for future solar panel owners. The new policy means less long-term savings for North Carolina homeowners who go solar.

For the most accurate local rates and up-to-date information, we recommend talking to your utility provider directly.

» GREENEST STATES: North Carolina ranks No. 20

Solar resources in North Carolina

Below are some additional resources that can guide you to save money on energy-efficient upgrades in North Carolina.

» GUIDE: Solar panel installation

Find solar companies in North Carolina

Compare popular solar companies available in North Carolina below. Read our guide to the best solar companies for more.

Do you own or rent?

FAQ

Can I get solar panels for free in North Carolina?

No, but you can lease solar equipment or enter a power purchase agreement (PPA) with minimal upfront costs. Still, neither is totally free. Solar leases generally require a flat monthly fee; PPAs make you pay per unit of electricity.

» FREE SOLAR PANELS: Are they really free?

How can I pay for solar panels?

You can pay cash, but most people finance solar panels with a solar loan. Other options include leasing or getting a power purchase agreement.

» SOLAR PANELS: Lease vs. buy

How much can I save with solar panels in North Carolina?

In North Carolina, the average savings is $20,035 over 25 years. Even if you don’t generate 100% of your energy needs, you can save a lot of money compared with traditional utility bills.

What is the NC GreenPower Production incentive?

The NC GreenPower Production Incentive encouraged residents in North Carolina to use renewable energy. The program paid solar energy producers for every $4 donated to the program, which then bought 125 kilowatt-hours (kWh) of clean power from local generators. As of February 2018, NC GreenPower has terminated the small solar generator program application.

Are there any commercial solar incentives in North Carolina?

There are commercial solar tax breaks, loans, rebates, permit reductions and performance-based incentives for homeowners who wish to install solar panels in North Carolina.

» MORE: Commercial solar panels

Is my HOA allowed to restrict solar panels?

Homeowners associations are generally not allowed to restrict solar panel installations, according to North Carolina's Senate Bill 670. There are a few exceptions. For example, the HOA can tell you where to put the panels.

Bottom line: How much are solar panels in North Carolina?

There are a lot of good reasons to go solar in North Carolina. The cost of a system is low, even more so if you include the federal solar investment tax credit. Plus, the state offers a bunch of solar incentives to make the cost even lower. Over 25 years, you could save, on average, $20,035.

The ConsumerAffairs Research Team conducted an in-depth analysis to determine how much it costs to go solar in North Carolina and the average solar costs in other states.

Solar costs: North Carolina vs. nearby states

*Before the federal investment tax credit (ITC); **When you pay in full upfront

Article sources

ConsumerAffairs writers primarily rely on government data, industry experts and original research from other reputable publications to inform their work. Specific sources for this article include:

  1. DSIRE, “North Carolina Solar Programs.” Accessed Nov. 27, 2023.
  2. EcoWatch, “Solar Panel Cost in North Carolina.” Accessed Nov. 27, 2023.
  3. United States Environmental Protection Agency, “Summary of Inflation Reduction Act provisions related to renewable energy.” Accessed Nov. 27, 2023.
  4. Solar Energy Industries Association, “North Carolina Solar.” Accessed Nov. 27, 2023.
  5. North Carolina General Assembly, “Senate Bill 670.” Accessed Nov. 27, 2023.
  6. EnergySage, “North Carolina's new net metering policy.” Accessed Nov. 27, 2023.
  7. North Carolina Utilities Commission, “Net Metering.” Accessed Nov. 27, 2023.
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