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Interested in powering your home with clean, sustainable energy to enhance your energy independence? Switching to solar in North Carolina allows you to save money, reduce your carbon footprint, and decrease your reliance on the utility grid.
With the federal solar tax credit, North Carolinians can cut their solar installation costs by thousands of dollars, accelerating the payback period and boosting the value of their investment.
Here’s our guide to going solar in North Carolina.
Key Solar Rebates and Incentives in North Carolina
Residential Clean Energy Credit
The Residential Clean Energy Credit, previously known as the federal investment tax credit (ITC), offers a 30% reduction in the cost of your solar panel system. This credit covers the entire system, including equipment, labor, permitting, and sales tax.
In North Carolina, the average cost of a 5 kW solar panel system is approximately $13,000. With the 30% credit, the cost drops to about $9,000.
You can claim this credit when filing your federal income taxes, applying it toward your federal tax bill. To qualify, you must purchase your system with cash or a solar loan; leases do not qualify. Additionally, you need a sufficient tax liability to benefit from the credit, though any unused portion can be carried over to future years until the credit expires at the end of 2034. Tax-exempt entities, such as nonprofits, may be eligible for a direct payment.
PowerPair Rebate Program
Eligible PowerPair installations can qualify for one-time incentives of up to $9,000, including:
- $0.36 per watt-AC for solar panel installations, up to a maximum of 10 kW-AC
- $400 per kWh for battery storage installations, up to a maximum of 13.5 kWh
Participation requirements will depend on the rider option selected by the participant.
Incentives are calculated based on the nameplate rating of the solar panels (in kW-AC) and the battery (in kWh). While installed equipment can exceed the maximum incentive limits, the total system size must not exceed 20 kW-AC.
North Carolina Solar Tax Exemptions
In addition to the rebates and incentives, North Carolina offers a solar property tax exemption. This means you will not face higher property taxes due to the value added by solar panels. However, North Carolina does not provide a solar sales tax exemption.
North Carolina’s Key Solar Incentives: A Breakdown
Net Metering In North Carolina
Dominion Energy
If Dominion Energy is your utility provider and you connect your solar panel system to the grid, you can take advantage of net metering, one of the best solar incentives in North Carolina. With net metering, you earn credits for any excess electricity your solar panels generate and send to the grid.
When you need to draw electricity from the grid, these credits are applied to your bill, potentially reducing your charges to very little or even nothing. However, be aware that unused credits do not carry over indefinitely; any remaining credits will be forfeited on June 1 each year.
Duke Energy
For residents in Duke Energy service areas, if your installer applied for interconnection before October 2023, you will be grandfathered into net metering until 2027. If you are considering solar now, net metering is no longer available, but you have two other options until 2027:
Time-of-Use (TOU) Export Rate
This option offers savings that are approximately 30-40% lower than net metering. If your system exceeds 15 kW, you will also incur a grid access fee of $1.50 per kW per month for Duke Energy Progress, or $2.05 per kW per month for Duke Energy Carolinas. Additionally, there are minimum bill requirements and non-bypassable charges, which are $28 and $0.36 per kW per month for Duke Energy Progress, and $22 and $0.44 per kW per month for Duke Energy Carolinas.
Bridge Rate
Until 2027, you can opt for the Bridge Rate, a modified net metering rate available for 15 years from your interconnection date. This option eliminates the grid access fee and TOU rates, although it still includes a minimum bill requirement and non-bypassable charges. Savings with the Bridge Rate are generally higher compared to the TOU export rate, but availability is subject to annual caps, so check your eligibility.
Discover the Ideal Solar System for Your Home!
Options for Financing Your Solar Panel System
Here are a few ways to finance your solar panel system so you don’t have to provide all the money upfront:
Cash Purchase
You’ll own the system outright and pay for it upfront, offering the best long-term savings.
Solar Loan
Allows you to retain ownership of your system with little to no money down. Look for subsidized clean energy loans through local incentive programs for the best rates. Home equity loans or personal loans are alternatives, though private solar loans may come with higher interest rates or upfront fees.
Solar Lease or Power Purchase Agreement (PPA)
A third-party company owns the system and either leases you the panels (solar lease) or sells you the electricity they generate (PPA). These options typically offer lower savings and can involve lengthy contracts. Be sure to carefully review the terms before committing to avoid potential drawbacks.
The Solar Panel Payment Dilemma: Solved!
Navigating the Solar Interconnection Process
The solar interconnection process in North Carolina involves several key steps to ensure that your solar power system is properly connected to the local electricity grid. Here’s a detailed guide to help you through the process:
System Design and Permitting
- System Design: Work with a certified solar installer to design a system tailored to your energy needs and local regulations.
- Permitting: Obtain necessary permits from your local government or municipality. This typically includes zoning permits and building permits, which ensure that your solar installation complies with local codes and regulations.
Utility Notification and Application
- Interconnection Application: Submit an interconnection application to your utility company. This application details your solar system and how it will connect to the grid. In North Carolina, common utilities include Duke Energy and Dominion Energy.
- Review Process: The utility company will review your application to ensure it meets technical and safety standards. They may request additional documentation or modifications to your system.
System Installation
- Installation: Once permits are approved, your solar installer will proceed with the installation of your solar panels and related equipment.
- Inspection: After installation, a final inspection is required to verify that the system adheres to local codes and safety standards.
Utility Inspection and Approval
- Utility Inspection: After installation, the utility company will inspect the system and perform necessary tests to ensure proper interconnection with the grid.
- Authorization to Operate: Once the inspection is complete and the system meets all requirements, you will receive authorization to begin operating your solar power system.
System Activation
- Commissioning: Your solar installer will activate the system and ensure it is functioning correctly. This may include configuring monitoring tools to track performance.
- Monitoring: Many systems include monitoring features that allow you to track your energy production and system performance.
Ongoing Maintenance and Support
- Maintenance: Regular maintenance and periodic inspections are recommended to ensure the long-term performance and efficiency of your solar system.
- Support: If you encounter any issues or need assistance, contact your solar installer or utility company for support.
By following these steps, you can ensure a smooth and successful interconnection of your solar power system to the grid, allowing you to enjoy the benefits of clean, renewable energy.
Are Solar Panels Worth It?
Yes, solar panels are generally a valuable investment, both financially and ethically. Although the initial cost of a home solar power system can be high, tax credits and other incentives can significantly lower these upfront expenses. Over time, many users experience substantial savings on their electric bills, which helps offset the overall cost. Additionally, solar panels provide the satisfaction of contributing to environmental sustainability. In most cases, the benefits of going solar far exceed the drawbacks.
