The solar incenvice in North Carolina 2024

Updated Dec 29, 2024

You'll pay an average of $12,567 to install a 5 kilowatt solar panel system in North Carolina, before incentives.
The federal investment tax credit (ITC) lowers that price by 30% of all your solar equipment and installation costs.

What solar incentives are available in North Carolina?

As a homeowner in North Carolina, you have access to several different tax incentives that make solar panels more affordable. Solar incentives are available at both the federal and state levels to help you save thousands on your investment in solar energy.

Solar Calculator is here to help you take the next step in your transition to renewable energy. Below, we’ll discuss some of the different ways you can make solar more affordable.

Federal Investment Tax Credit

The Federal ITC allows you to claim 30% of your total equipment and installation costs on your federal taxes. There is no minimum or maximum amount you can claim and it includes equipment, installation, permitting, and even battery storage.

The ITC will remain at 30% until December 31, 2032. After that it will be reduced to 26% until December 31, 2033, then to 22% the following year. The ITC is currently set to disappear in 2035 unless it is renewed.

Who is eligible for the Federal ITC?

Most homeowners will qualify for the Federal ITC, but not all. You must meet the following criteria to claim your 30% tax credit:

Your solar system must have been installed between January 1, 2017 and December 31, 2034.

You must own the property on which the system was installed. That means no leased properties such as apartments or townhomes.

The property must be located within the U.S

You must own the entire solar system. Equipment acquired through a lease or Power Purchase Agree (PPA) is not eligible.

The equipment must be purchased new. Used equipment is not eligible.

The Federal ITC will also cover the following expenses:

Solar panels and cells

Wiring, inverters, and mounting equipment

Cost of labor

Energy storage devices

Sales tax

Homeowners save around $10,000 on average with the Federal ITC. But that number can be higher or lower depending on your total expenses.

Local solar incentives

Who’s eligible : Commercial, Industrial, Nonprofit, Agricultural, Multifamily Residential

How to apply : S.B. 802 of 2024 authorized the establishment of a statewide Commercial Property Assessed Capital Expenditure (C-PACE) program that local governments may voluntarily join. Eligible properties include commercial, industrial, agricultural, nonprofit, and multifamily residential properties with five or more dwelling units. The bill establishes the Economic Development Partnership of North Carolina as the statewide administrator for the program and assigns a variety of tasks to it: Prepare a C-PACE toolkit, as described in S.B. 802, in consultation with stakeholders and local governments Impose fees to offset the actual and reasonable costs of administering the C-PACE Program, including an application fee not to exceed $750, and a processing fee equal to 1% of the financed amount not to exceed $25,000 Establish the process for reviewing and evaluating applications Accept and approve project applications for C-PACE financing A local government seeking to participate in the C-PACE program must first adopt a resolution meeting the criteria detailed in S.B. 802. C-PACE liens must be inferior to all prior and subsequent State, local, and federal taxes or liens and superior to all other liens on the property from the date on which the notice of the C-PACE assessment is recorded. The term of the C-PACE financing may not exceed the weighted average useful life of qualifying improvements, and the total amount of financing cannot exceed 35% of the value of the property. The exact financing agreement between the capital provider and the property owner will be negotiated by the parties, including all terms and conditions of repayment, interest, penalties, and prepayment conditions. Prior to entering into an assessment agreement, the property owner must submit to the statewide administrator a written statement, executed by each holder of a mortgage, deed of trust, or other lien on the property securing indebtedness, indicating their consent to the C-PACE assessment

Who’s eligible : Schools, State Government

How to apply : Senate Bill 668 of 2007 and Senate Bill 1946 of 2008 established several policies intended to reduce the amount of energy, water and other resources consumed by the State government in their buildings and facilities. These standards apply to all new buildings owned by the State, the University of North Carolina, and the North Carolina Community College system, which are larger than 20,000 gross square feet. Also included are renovation projects when the cost is greater than 50% of the insurance value and the project is greater than 20,000 square feet. These projects must be designed, constructed and certified to exceed the energy efficiency requirements of ASHRAE 90.1-2004 by 30% for new buildings, and 20% for major renovations. Additionally, new buildings must consume 20% less potable water than the North Carolina Plumbing Code requires, and 50% less outdoor water than typical facilities using conventional systems. Existing buildings purchased by the State must also meet certain energy and water conservation standards. Buildings purchased by the State must meet whatever State law or local ordinance was in effect during the time of its construction. Buildings having historic, architectural or cultural significance, however, do not have to meet this standard. These bills go further than similar standards adopted by other states by also making conservation requirements for existing state-owned buildings. No later than December 31, 2009, all existing State-owned buildings were required to make specific lighting upgrades including the replacement of standard exit signs with ones that utilize LEDs and the replacement of incandescent light bulbs with compact fluorescent bulbs. Existing buildings were also required to install faucet aerators and low-flow shower heads, and adopt other methods to reduce either outdoor or indoor water consumption by 20% relative to a 2002-2003 baseline. When replacing HVAC equipment in an existing building, the specifications of the new system must be reviewed to ensure it is properly sized. Replacement motorized equipment must meet minimum performance standards established by the National Electric Manufacturers Association. And, when purchasing new office equipment and appliances, the new equipment must be Energy Star certified. The bills also refined a previous requirement for State buildings in total to reduce their energy consumption per square foot by 20% by 2010 and 30% by 2015 relative to energy consumption levels during the 2003-2004 fiscal year. To help meet this goal, The Department of Administration through the State Energy Office will develop a comprehensive program to help State agencies and State institutions of higher learning manage their consumption. This will include a requirement for the use of life-cycle cost analysis during the design phase to consider site orientation, the amount and type of fenestration and the potential for daylighting, the amount of insulation used, variable occupancy and operating conditions, and architectural features that affect the consumption of water, energy and other utilities.

Does North Carolina offer tax exemptions?

Rebate Program

Solar/Wind Permitting Standards

Energy Standards for Public Buildings

PACE Financing

Property Tax Incentive

Community Solar Rules

Net Metering

Grant Program

Interconnection

Offshore Wind Energy Target

Utility Rate Discount

Loan Program

Building Energy Code

Renewables Portfolio Standard

Solar/Wind Access Policy

Green Building Incentive

Cash payments

Paying cash upfront is easily the simplest and most cost-effective route — if you can afford it. It lets you maximize your total savings by avoiding interest rates and other fees. You also don’t have to worry about making monthly payments. But the downside is you have to spend a lot of cash at once which isn’t an option for everyone.

Pros

No interest payments makes this less expensive in the long term

It provides a higher return on your investment

You hit your break even point faster

You are eligible for tax incentives

Cons

It requires a large initial investment

There is an opportunity cost if you decide to wait and save

You may become cash poor

Financing

Financing solar panels is probably the most common payment method. You get to own the system — as opposed to leasing — but you don’t have to spend all your cash at once. And although you do have to pay interest, you can secure a fairly low interest rate as long you have good credit.

Pros

It doesn’t require a large lump sum

You can space your payments out over time

You are eligible for tax incentives

Cons

It costs more over time

Interest rates may be high

You need good credit

The payback period is longer

It takes longer to break even

Solar leases and PPA agreements

If purchasing solar equipment isn’t an option for you, a lease or a PPA may be worth exploring. This is where you are essentially “renting” the equipment for a fixed rate each month. And although you don’t have ownership of your system, there are other benefits such as maintenance and servicing agreements.

Pros

There is no upfront cost

You are not responsible for maintenance

Contract terms are flexible

Cons

You do not own your solar system

You will not be eligible for tax credits or exemptions

It is a long term commitment

You save less than if you own the system

Rates may increase

Going solar doesn’t have to break the bank

Going solar is becoming more affordable than ever. And thanks to a variety of solar incentives in North Carolina, you can save thousands more on your investment.

Want to get an idea for what it will cost you to go solar? You can use our solar cost calculator to generate a customized estimate instantly. We take into consideration a wide range of criteria including location, electric bill, roof size, and other factors. Try it out today and start planning for your future.

Learn more about solar

Check out some of our latest blog posts below.

The solar incenvice in North Carolina 2024

What solar incentives are available in North Carolina?

Federal solar incentives

Federal Investment Tax Credit

Who is eligible for the Federal ITC?

The Federal ITC will also cover the following expenses:

How to claim the Federal ITC

Local solar incentives

Can you claim multiple tax incentives in North Carolina?

Does North Carolina offer tax exemptions?

Rebate Program

Solar/Wind Permitting Standards

Energy Standards for Public Buildings

PACE Financing

Property Tax Incentive

Community Solar Rules

Net Metering

Grant Program

Interconnection

Offshore Wind Energy Target

Utility Rate Discount

Loan Program

Building Energy Code

Renewables Portfolio Standard

Solar/Wind Access Policy

Green Building Incentive

What is the best way to pay for solar?

Cash payments

Pros

Cons

Financing

Pros

Cons

Solar leases and PPA agreements

Pros

Cons

Going solar doesn’t have to break the bank

Learn more about solar

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Going Solar with Ameren Illinois: A Complete Guide for Homeowners

The Future of Solar Energy: How to Recycle Solar Panels