How do South Carolina solar incentives and rebates affect solar payback time in 2019?
Published on 16 Oct, 2018 by Andrew Sendy
5 minutes read
Solar panel installation boomed in South Carolina during 2016 and 2017 as homeowners took advantage of state and federal solar tax credits, declining prices to install solar photovoltaic (PV) systems and some generous utility-based solar incentives.
In 2018, however, higher tariffs on solar panels and an end to some key utility-based solar incentives from SCE&G and Duke Energy South Carolina, has reduced demand for residential solar power systems.
However, financial modeling of solar returns in South Carolina has indicated the homeowners sitting on the fence may be missing out on one of the most significant opportunities for risk-free profit they will ever get.
The good news is that SC still has some of the best cost-saving opportunities in the country for making the switch to solar.
In fact analysis through the Solar-Estimate solar cost and return calculator has indicated that the average SCE&G customer with a $150 power bill who installs a 7.6 kW solar system will pay the system off in 7.2 years and generate a profit of around $63,000 over the life of the system - even after all the interest and repayments on a zero down system!
That's almost 20 years of free power after the payback period and something that is only possible because in 2019 three significant solar incentives are still in place (for now).
What are rebates, incentives, and tax credits remain to go solar in SC in 2019?
Solar systems range in price from $20,000 to $35,000, depending on the size of the system.
However, federal and state incentives alone cover up to 55% of the initial cost!
Incentives in South Carolina take the form of rebates, tax credits and net metering credits, such as:
State solar energy tax credit: Reduce the costs of installation by up to 25% by claiming the SC state tax credit. The final amount depends on your tax bracket, but even if you don't pay enough to get the full value in a single year, you won't lose. The credit carries over for up to 10 years, so you're bound to get the total amount of 25% of the system value over time.
Federal solar tax credit or ITC (Investment Tax Credit): This is a nationwide initiative that offers homeowners a refund of up to 30% of the total system costs. Once again, this carries over into future years if necessary, and shows the federal government's ongoing support for alternative energy sources.
Local utility incentives: Most utility companies no longer offer upfront incentives, to help cover the cost of purchase and installation. The reason for this is that the other tax credits available already makes solar a smart investment in South Carolina. However, one exception to this is Santee Cooper customers, who can receive a rebate of $1.30 per kW.
Net metering in South Carolina: Duke Energy South Carolina and South Carolina Electric and Gas offer net metering options to their clients.
Net metering enables homeowners to export extra energy produced by their system back to the grid, where they receive credits for it. They can then use these to offset their costs during times when they use more energy than expected.
Most of the incentives referred to above are limited in either budget or timeframe, and it is these incentives that are driving the excellent return that installing solar panels in South Carolina have to offer.
Homeowners wanting to benefit from these solar incentives need to purchase their system sooner rather than later. It is vital that you get a competitive quote for the system you need, while all these incentives remain available.
How much electricity do solar panels produce in South Carolina?
The quantity of electricity produced by a solar PV system depends on several factors, including the location, the amount of sun, the direction and the pitch of the roof on which the panels will be mounted.
On average, a solar system installed in South Carolina at a south-facing location on a 24-degree pitch delivers 1,350-kilowatt hours per annum, per 1 kW of direct current (DC) peak solar panels capacity each year.
A 6kW system, therefore, can deliver around 8,100 kW hours per year in most parts of the state.
Which solar system is right for your home?
Installing a residential solar system is an investment, so as with all investments - it's essential to get good quality information.
The size of the system you need depends on the amount of energy your household uses, physical factors such as your location in the state, and the amount of sunlight your home receives.
South Carolina experiences sunshine on average of 62% of the year, which makes it a suitable environment for installing solar energy systems.
Before making a final decision, find out whether there are any Homeowner's Association (HOA) rulings against installing solar systems in your community since SC is a state that allows HOAs this power.
Once you do this, the calculator will also show you the average cost and even specific live, current solar offers from local solar companies in South Carolina.
Which installer should you use for your solar system?
Once you decide to switch to solar, make sure you find an installer who can provide the reliable, high-quality work you need.
Speak with family and friends who have had solar systems installed and find out who carried out the work and what they thought of the company's service, products, and expertise.
Research the companies operating in your area and read any online reviews to get a sense of their methods.
Don't be put off by one or two less favorable reviews, rather look at the "big picture presented by all the reports to see whether they have a reasonably happy client base.
Obtain quotes from several solar installers, and compare factors such as:
- whether the company has certification from the North American Board of Certified Energy Practitioners (NABCEP)
- the initial cost of the system recommended by the installer for your circumstances
- the warranties offered for both equipment and installation/labor
- incentives available and whether the solar company will help you to apply for them
- the savings you can expect to generate both in the short term and in the long-term
- how you will pay for the system, and whether the companies you like offer financing options that suit you.
Get started with our list of the best solar installers in South Carolina on SolarReviews.