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A 2023 Guide to All Solar Incentives in North Carolina

The transition to solar power has been quite rapid in 2022 in North Carolina, primarily due to exciting solar incentives in North Carolina. This can be gauged from the fact that North Carolina ranked 4th among solar states in 2022, up from 8th in 2021. Currently, there is enough solar power installed to power 956,000 homes.

As more and more homeowners decide to go solar, it is important to keep ourselves abreast of the kind of incentives a resident of North Carolina can qualify for.

Read through our article to get a complete picture of all solar incentives in North Carolina, tax credits, solar rebates, and tax exemptions.

Solar incentives in North Carolina

Granted that solar is an expensive product, but solar incentives help homeowners and businesses big time! On average, solar incentives help reduce the cost of solar PV systems by about 40%. In some states, the figure may go beyond 40%. What about North Carolina?

Here is a list of all the available solar incentives in North Carolina.

Federal Income Tax Credit

The Federal Investment Tax Credit is not peculiar only to North Carolina—from Hawaii to Alaska, it is available to all homeowners and businesses intending to go solar. It is a 30% tax credit that homeowners can claim upon installing a solar PV system in their homes. For instance, if your system is worth $20,000, after claiming the ITC, it will become $14,000.

The scope of the ITC is pretty broad. The eligible expenses include solar panels, wiring, inverters, batteries, permitting and inspection costs, and even solar water heating systems that can be installed independently of a solar power system. Any homeowner with income tax liabilities can claim the credit if the system is new and installed on the homeowner’s primary or secondary residence.

If your tax liabilities do not match the credit given, worry not! You can roll it forward to the coming years until the liabilities match the credit. Read more about the federal income tax break in our detailed guide here.

Net metering in North Carolina

Net metering is a billing mechanism that allows homeowners to sell any excess electricity their solar systems generate to the grid. In return, they receive energy credits, which they can consume when their systems do not generate electricity, such as at night or during cloudy weather.

Not all states have net metering policies. For instance, Texas and Idaho do not offer net metering as a state policy. But luckily, North Carolina runs an excellent net metering program. Unlike many states, it credits the full value of any surplus energy you export to the grid to your next electricity bill.

You can choose to have a residential system as big as 1000 kW, provided that you are a homeowner. But we recommend installing a system that could offset only the energy you import from the grid. It is because the credits, however large they may be, expires on June 1 of every year. You are neither paid in cash for the unused credits nor are they carried forward to the next year.

For example, if you exported 500 kWh to the grid in April and did not use them till June 1, it is all gone. “If the credits could accumulate indefinitely, it would allow you to treat the grid like an ‘electricity bank,’ and unfortunately, the grid does not currently have that type of storage capacity,” says the North Carolina Utilities Commission.

Did you know?

Albermarle Beach Solar in Roper was developed by SunEnergy and came online in 2020. This 150.6 MW project produces enough electricity to power 17,988 homes.

Source: seia.org

Property tax exemption

According to the National Renewable Energy Laboratory (NREL), every $1 you save on your electricity bill adds $20 to the value of your home. This roughly amounts to a 4% increase in solar homes’ value. Does that mean higher taxes on your property? Yes, in some states. But not in North Carolina.

Officially called Property Tax Abatement for Solar Electric Systems, you can enjoy the benefits of added home value but won’t pay tax. For example, if your home’s worth is $300,000, a solar system may increase its value to $325,000. But you would still pay taxes for the value assessed before the solar installation.

This incentive is also available for commercial and industrial solar installation. But note that, in some cases, the tax exemption maybe 80% and not 100% for homeowners.

Solar rebates in North Carolina

From 2018 to December 2022, Duke Energy offered up to $600 per 1 kW system rebate on installing a residential solar PV system. It means you could get a $6,000 rebate upon installing a 10 kW solar system or $3,600 for a 6 kW system. You could install as large systems as 1000 kW, but the rebate was capped at $6,000. 

As of writing this article, Duke Energy is no longer accepting fresh applications.

But here’s the good news: The North Carolina Utilities Commission is negotiating a plan to offer Duke Energy’s customers an upfront incentive on going solar.

While there has not been much headway in the negotiations, we are hopeful that some sort of solar rebate will soon be revived for residential solar across the state.  

Revolving solar loans

North Carolina has empowered cities and counties to offer revolving loans to homeowners interested in generating electricity from renewable sources, including solar. Established in 2009, the program offers loans at up to 8% interest rate, with not more than 20 years of loan term.

If you are low on budget but want to save on your electric bill, going with this option would not be less than an ideal scenario. Once you install your system, you can pay the amount of money saved on your electricity bill to repay the loan. With zero upfront cost, you can go solar and let your system pay back for itself.

Other local incentives

We discussed the main solar incentives in North Carolina. But there may be other incentives you may qualify for, depending on where you live.

For example, you can utilize the building permit rebate if you live in the City of Asheville. Available to both homeowners and businesses, the value of the rebate changes based on the green energy technology you opt for. For solar, you will be given a $50 rebate on your building permit application. Small incentives, but they really add up when combined with others!

How much do solar panels cost in North Carolina?

The average cost of a solar PV system in North Carolina is $3.00/watt. This means that a 5 kW solar system can cost you anywhere between $14,000 to $17,000. But these prices are before the Federal Income Tax Credit is adjusted in the price. Once that is subtracted, the price can fall to as low as $11,000.

Similarly, the ITC-adjusted prices for 6 kW and 7 kW solar systems in North Carolina are around $13,500 and $15,700, respectively.

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