What Are the Solar Energy Tax Credits?

Solar power is popping up everywhere in the Greenville area.  From small solar farms to rooftops, homeowners in the upstate are making the switch to solar energy in large to reap the financial rewards.  The cost for a solar installation is at an all-time low and currently there are income tax credits offered by both the federal government and the state of South Carolina.

What Are the Federal Solar Tax Credits and How Could They Benefit You?

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To start, the federal solar tax credit, also known as the investment tax credit (ITC), allows you to deduct 30 percent of the cost of installing a solar energy system from your federal taxes. This tax credit is not only for homeowners but business owners as well, and there is no cap on its value.

According to energy.gov, “If the federal tax credit exceeds tax liability, the excess amount may be carried forward to the succeeding taxable year.”  This tax credit will step down starting January 1, 2020. The form to file for the federal solar credit can be found here.

Here is a breakdown of the projected step down:

30% federal tax credit for systems placed in service by 12/31/2019.

26% federal tax credit for systems placed in service in the year 2020.

22% federal tax credit for systems placed in service in the year 2021.

 

What Are the South Carolina Tax Credits?

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Next, if you are lucky enough to live in South Carolina, you will enjoy the benefit of a further tax incentive.  South Carolinas is currently offering a 25 percent solar tax credit.  This tax incentive does have a few limitations though.   The form to file the South Carolina tax credit can be found here.

The limitations include:

Value is capped off at $35,000.

Max of $3500/year or 50% of your state tax liability, whichever is less.

Max of 10 years.

Just as in the federal, if you do not use all the credit in the first year, the credit may be carried forward. The federal may be carried an unlimited amount of years, but the South Carolina tax incentive is limited to 10 years to carry over.

Now is the Best Time to Switch to Solar!

The solar tax incentives will not be around forever.  In fact, there are people currently fighting against the South Carolina solar tax credit, which means that we might lose this incentive in the near future.  As noted before, the federal solar tax credit will be lowered in 2020, which makes the decision to switch to solar time sensitive if you would like to reap all the current tax incentives.

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With the current federal and South Carolina solar tax credits and the decrease in price for solar installations, right now is the best time to switch to solar in South Carolina.  If you would like to have your home evaluated for its solar potential and to see which tax credits you qualify for, please fill out the form below.

 

 

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Solar Power: Is it Something You Should Consider in South Carolina?

With ever increasing power bills, it is no surprise that many homeowners are deciding to switch over to solar power.  All over the country, solar is steadily growing, but in South Carolina, solar is booming.  Here are the top reasons why solar is a great choice for South Carolina residents:

Federal Solar Tax Credit

The federal solar tax credit, also known as the investment tax credit (ITC), lets you deduct 30 percent of the cost of your solar power system. The federal tax credit applies to both commercial and residential systems. The federal tax credit can be used all at once or it can be used indefinitely until you are able to use all of the tax credit and there is no cap on its value.

 

South Carolina State Tax Credit

South Carolina is currently offering residents a 25% tax credit for switching to solar energy.  This tax credit is capped at $3500 a year for 10 years at a maximum credit of $35,000.  This would mean that the same $25,000 solar power system would qualify for a $6,250 credit towards SC state income taxes.  This tax credit makes solar a little more affordable for residents.

 

Net-Metering

Most of South Carolina’s largest utility companies such as Duke, SCE&G, and Blue Ridge Cooperative are participating in net-metering.  According to Energy.SC.gov, “net metering employs a standard electrical meter to record the flow of energy back and forth between a customer-generator and the utility’s power grid. Net metering is usually created as an incentive for homeowners and small businesses to invest in renewable power systems.”  With net-metering, batteries are no longer necessary and this reduces the cost for the homeowner significantly.

Solar is More Affordable Than Ever

With utility rates in South Carolina reaching up to 15 cents a kilowatt hour, creating your own energy now costs less than buying from your local utility.  SCE&G is currently the highest at 15 cents and Blue Ridge is right behind at over 13 cents, depending on the consumer.  After purchasing your solar power system with cash and applying your tax credits, you could expect to pay less than half per kilowatt hour, which is a significant savings.  Of course, every home and homeowner is different and a proper analysis of your home would be needed to calculate your specific savings.

Plenty of Sunshine

South Carolina is one of the fortunate states that’s climate produces an abundant amount of sunshine. The upstate receives about 121 clear days annually, which produces thousands of usable solar power hours each year.  This amount of sunshine also reduces the size of the solar energy system needed for the homeowner to power their home each year.

From federal tax credits, South Carolina state tax credits, net-metering with the major power companies, low cost per kWh and maximum sun exposure, South Carolina is an ideal place to switch to solar energy.

Let’s Get Started!

There has never been a better time to go solar in South Carolina and with the Federal and South Carolina State tax credits, solar is now more affordable than ever and much better for the environment.  With ever increasing power bills, solar power makes economic sense for South Carolinians to make the switch and reap the financial rewards.

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