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April 28, 2024

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    North Carolina is an outstanding place to go solar, with the cost per watt for equipment falling well below the national average and the local energy consumption sitting well above average, leaving plenty of room for savings. In fact, the average North Carolina solar customer enjoys energy savings from their panels that pay for the system and then save an additional $20,000 or more.

    I’ve spent years researching and writing about the benefits of solar and the incentives available across the country, and North Carolina has long been a solar-friendly state with enticing benefit programs, although some of those perks have disappeared or been downgraded over the years. I’ll explain all the solar incentives in North Carolina in this article and discuss how each can save you money on your photovoltaic (PV) system.

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    How Does North Carolina Rank for Solar Incentives?

    North Carolina is about average when it comes to available solar incentives, in large part because some perks have expired recently, and net metering has undergone a few negative changes. Residential customers in the state stand to save significantly on their systems, although savings won’t be as high as they would in some other more solar-friendly states. On average, the incentives available should provide energy savings that offset the cost of your system and then save an additional $15,000+ over the life of your panels.

    It’s a good thing North Carolina solar benefit programs are so helpful, too, because solar equipment tends to be more expensive in the state than in most others — it’s more affordable on a per-watt basis, but larger system size requirements mean all-in costs are above average. You’ll be happy to have those perks to maximize your energy savings and reduce your panel payback period.

    The table below includes a quick look at the North Carolina solar incentives you can take advantage of. In the following sections, I’ll explain each of these incentives in greater depth and explain how you can take full advantage of them.

    Solar Incentives Available in North CarolinaWhat Is It?When Can You Get It?How Much Can It Save You?
    Federal Solar Investment Tax Credit (ITC)
    An income tax credit for 30% of your system total


    One time: When you file your taxes for the year you go solar
    $8,000, on average in North Carolina
    Property Tax Abatement for Solar Electric SystemsThe value your panels add to your home isn’t taxedContinuous: Your panels will never cause your property taxes to go up$4,667, on average, over the life of your system
    Local IncentivesA variety of solar rebates and tax credits from electric companies and citiesVaries based on incentiveVaries
    Net MeteringCredits you for all overproduction to help maximize energy savingsContinuous: Always in effectVaries based on system size and energy consumption

    Federal Solar Tax Credit (ITC) – How It Impacts North Carolinians

    My Take: The ITC is the single most important solar incentive you can take advantage of in North Carolina, in my opinion. If you only take one perk, for some reason, make it this one.

    The federal investment tax credit is, as the name suggests, offered by the federal government and made available to all North Carolina solar customers. It provides a credit to your income tax burden for 30% of your system cost or an average of around $8,000 in North Carolina. When you go to pay your income taxes, that 30% is taken off of your bill, effectively saving you money.

    Unfortunately, I’ve seen a lot of solar companies misrepresenting this perk to customers. It’s not a rebate, and you’re not guaranteed savings. If you don’t owe money on your income taxes or the government owes you money, you won’t get any value from the ITC.

    However, even if you owe less than the 30%, you can still potentially take the whole thing. You can spread out the tax credit over five years, so as long as you owe a fifth of the credit each year, you can still enjoy the maximum savings.

    The federal credit was first offered in 2005 via the Energy Policy Act. It started at 30% and was originally scheduled to end a year later. It was extended several times due to its success. Most recently, the ITC was extended through 2034 via the Inflation Reduction Act (IRA), which was passed in 2022. The current rate schedule is as follows:

    • 30% for systems installed through the end of 2032
    • 26% for systems installed in 2033
    • 22% for systems installed in 2034
    • 0% for systems installed in 2035 or later
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    If you know you’re going to be going solar in the near future, you might be able to adjust your taxes or plan ahead so that you owe more when you go solar. I recommend asking your accountant to help you take full advantage of the ITC by altering other parts of your finances accordingly.

    Steps to Claim the Federal Solar Tax Credit in North Carolina

    The best part about the federal credit, in my opinion, is how easy it is to apply for it. You can follow the quick and easy steps below to make sure you take advantage of it, but know that in some cases, your solar installer or your accountant will fill out the paperwork for you.

    1. When you’re ready to file your taxes, print and fill out IRS form 5695.
    2. Include information about your system size, the installation location, your installer, and the total cost of your solar project.
    3. File the form along with your income taxes, or give the form to your accountant for filing.
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    4.4

    Which Solar Incentives Are Offered at the State Level in North Carolina?

    All taxpayers in the country have access to the federal solar credit, but North Carolinians also have access to some statewide perks. Ultimately, these additional perks can save you hundreds or even thousands more on your solar array upfront and over time. While I believe the ITC is the most crucial solar incentive to take advantage of, the statewide incentives below can be almost as helpful in saving you money and shouldn’t be overlooked.

    • Property tax abatement for solar power systems
    • Net metering

    Property Tax Abatement for Solar Systems in NC

    My Take: The property tax abatement helps reduce one downside of going solar: increased property taxes. This is a great way to maximize savings, and I especially love that it’s automatic.

    The property tax abatement for solar energy systems is a policy that prevents your property taxes from going up after you install a solar array. A key thing to remember is that solar equipment is expected to increase your property value, and since your property taxes are based on your property value, your taxes would normally go up after solar conversion. This is, of course, a pretty significant drawback for a lot of solar customers across the country.

    Luckily, the property tax abatement offered in North Carolina prevents that from happening. Your solar equipment is not considered at all when your tax assessor determines your property value or your property taxes.

    It’s hard to estimate exactly how much this perk will save you, but based on the statewide property tax rate of 0.7% and the average system value of $26,670, you’re looking at an average of $186 per year, which, over 25 years, totals over $4,600.

    The property tax abatement was first offered in North Carolina in July of 2008 and waived taxes on 100% of the system value. That policy hasn’t changed since and is still in effect today.

    Steps to Claim the Property Tax Abatement

    The property tax exemption for PV systems in North Carolina doesn’t require any work on your part to claim, which makes it an even better incentive, in my opinion. Your tax assessor will simply not consider your panels, batteries, inverters, or other solar equipment when assessing your taxes.

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    Which Solar Incentives Are Offered at the Local Level in North Carolina?

    Compared to other states, North Carolina has fewer statewide incentives, but it really shines when it comes to local perks. Local incentives are offered by local electric companies and municipalities to make localized solar conversion more affordable and accessible. They’re often not as massively beneficial as federal or state incentives, but they can still save you hundreds of dollars, so they’re well worth the time it takes to apply, in my opinion.

    Below are some of the most appealing solar incentives in North Carolina that are offered at the local level:

    • Randolph Electric Membership Corporation (EMC) ElecTel Energy Efficiency Loan Program: This is a local loan program for up to $35,000 — well above the average system cost of $26,670 in North Carolina — with interest rates as low as 4.9%. It applies to solar systems and other energy efficiency upgrades, like heat pumps and new insulation.
    • Duke Energy Solar Rebate Program: This is one of the best local perks in North Carolina, and it’s available to all Duke Energy and Duke Energy Progress customers. It’s a solar rebate for $0.40 per watt installed up to $4,000. With the standard system size sitting at 10,500 watts, most residents will be able to get the full $4,000 back. As of this writing, the program has reached the maximum number of subscribers, so any new customers will be put on a waiting list.
    • Blue Ridge EMC net metering: I’ll discuss the statewide net metering program in greater depth in the next section, but this perk from Blue Ridge makes the policy even better for solar customers. Instead of your unused credits expiring annually, Blue Ridge pays you for all of them. Average savings will vary based on your production.
    • North Carolina community solar: Community solar is a policy that lets you buy in to a solar farm and get many of the benefits of using clean energy sources without having to install solar panels on your roof. Community solar won’t save you as much over time, but it’s a great way to support the clean energy movement without the large outlay of money upfront for panels and other equipment.
    • Catawba County Green Construction Permitting Incentive Program: This program credits you for permit fees related to green building equipment. You can get up to $500 back in permit rebates, although the actual value depends on the cost of solar permits in your city. According to the county, the average rebate is significantly lower, usually around $30.

    Net Metering in North Carolina – Can You Profit?

    In my opinion, net metering is one of the most beneficial solar incentives overall, but it’s being downgraded in a lot of states and becoming less attractive. The policy is still super beneficial in North Carolina, although the program will become less beneficial in October of 2023.

    Basically, net metering credits you for every kWh your system generates above and beyond what you consume on a daily basis. Any excess energy is sent to the electric grid and “banked” with your power company, and you can call on that banked power when you need it.

    Without net metering, you would still have to pay for each kWh you consume at night or on cloudy days that your system doesn’t provide. With net metering, you can overproduce when it’s sunny and then use that excess energy for free when your panels aren’t meeting your demands.

    As of the time of this writing, in North Carolina, you get credited with a one-to-one ratio, which is ideal. That means every kWh you overproduce offsets one kWh that you need to pull from the grid later. The only other thing to know about the current net metering policy is that, in North Carolina, any unused credits expire on June 1st every year and are permanently lost.

    Unfortunately, North Carolina’s net energy metering (NEM) policy is being downgraded in October 2023, and customers will either be switched to a bridge NEM rate — which will be lower than the current rate — or to a time of use (TOU) rate. In both cases, the lower credit rate will lead to decreased savings with your solar array, as well as an extended panel payback period.

    With the new terms, you can either choose the bridge rate or the TOU rates, and which is best for you depends on your normal energy consumption, the size of your system, and whether or not you have batteries installed. I recommend speaking with a reputable solar company in your area to figure out which will be the most beneficial for you.

    As far as savings from net metering in North Carolina, it all depends on your average energy consumption, how much you pay for electricity, and how appropriately your system is sized for your home. One thing is for certain, though — net metering is absolutely beneficial and can save you thousands on your power bills over time because it allows you to offset consumption even when your panels aren’t producing power.

    You can watch this short video below to get a visual representation of how net metering works:

    Steps to Enroll in Net Metering in North Carolina

    Enrolling in net metering is pretty straightforward, and in most cases, your solar installer will fill out the interconnection application for you. If you are required to file for yourself, though, you can follow the steps below:

    1. Print out the interconnection application from your electric provider’s website.
    2. Fill out the application. You might need to get some information about your system size, expected output, and energy offset from your solar panel installation company.
    3. Submit the application along with the application fee to your power company.
    4. Your electric company will usually need to send out a representative to inspect your system to make sure it’s connected properly before approval.
    5. All of your system production and home energy usage will be tracked automatically, and your bill will reflect your excess electricity generation.
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    4.4

    Watch Out For Solar Incentive Scams in North Carolina

    North Carolina is the fourth most popular state for solar conversion, according to the Solar Energy Industries Association (SEIA), and, unfortunately, with that popularity comes some room for solar incentive scams from companies looking to capitalize. There are a few things I recommend you look out for when considering solar perks and actually filing for them.

    First, it’s imperative that you understand how the ITC works, as I’ve seen a lot of companies misrepresenting it — purposefully or not — and a lot of customers complaining about it. The federal credit is not a rebate, and you won’t see any benefit from it if you don’t owe a lot in income taxes. If you don’t expect to owe around $8,000 total in taxes over the next five years, then you likely won’t be able to take the entire credit. I’ve seen a lot of companies advertise it as a rebate to get business, and that’s just not accurate.

    Second, there have been issues with how solar installers are calculating energy consumption and net metering. Pink Energy — formerly Power Home Solar — is facing class action lawsuits in North Carolina and several other nearby states for misrepresenting long-term savings and even sizing systems incorrectly. You should make sure you understand how net metering works in your particular area and make sure you hire one of North Carolina’s reputable solar installers to avoid any issues where you end up paying a solar loan and an electric bill.

    I’ve also seen reports of companies — often those going door to door — naming incentives that just don’t exist. Specifically, I’ve heard about companies mentioning rebates for solar panels and batteries that aren’t real to get people to sign up. This is the easiest scam to avoid, as you can do research on any incentive before signing anything.

    Bottom Line: Do the Incentives in North Carolina Make Going Solar Affordable?

    Yes, solar incentives in North Carolina make going solar significantly more affordable and can even help entirely offset your system costs over time. Solar equipment is still expensive, but things like the federal tax credit, North Carolina’s net metering program, and the local incentives can all come together to help you pay off your system more quickly and even enjoy savings above and beyond your system repayment.

    For most residents, these incentives are enough to make converting to solar more than worthwhile. When you’re ready to get started on converting your home to renewable energy, you can use the tool to get connected with a solar installer in your area who can help you maximize your savings using the incentives I discussed above.

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    FAQs About North Carolina’s Solar Rebates and Incentives

    Does North Carolina offer a solar tax credit?

    North Carolina doesn’t have a state tax credit for solar panel systems, but all residents have access to the federal credit. The federal tax credit can effectively bring your total conversion cost down by 30% — an average of $8,000 in North Carolina — if you owe enough in income taxes to take the perk. Residents also have access to other statewide and local solar perks that make up for the lack of a state tax credit.


    What is the NC solar rebate program for 2023?

    The NC solar rebate program available in 2023 is offered to all solar customers who receive electricity from Duke Energy. The rebate is for up to $0.40 per watt installed or $4,000, whichever is lower. Most North Carolina residents need a system that’s around 10.5 kW or 10,500 watts, which comes out to $4,200 using the per-watt rebate. As such, most Duke Energy customers who are eligible for the rebate will get the full $4,000. Unfortunately, the program is currently fully subscribed, so new applicants will be added to a waiting list.


    What is the North Carolina solar net metering program?

    North Carolina has a decent net metering program that credits solar customers for overproduction using an avoided-cost rate or a time-of-use rate. That means every kWh you overproduce with your panels will offset less than one kWh you need to pull from the grid when your panels aren’t meeting your production. This isn’t ideal, but it’s the way a lot of states are moving with net metering. With the statewide net metering program, all unused credits will expire annually on June 1st, but some local net metering programs from certain electric companies, like Blue Ridge EMC, let you roll over credits indefinitely.


    Do I qualify for solar incentives in North Carolina?

    All taxpayers in North Carolina will qualify for the federal tax credit — a credit to your income taxes in the amount of 30% of your installation price — as well as net metering, which is a highly beneficial program that can help maximize your energy savings and pay off your system much more quickly. You might also qualify for other tax incentives and rebates from your utility company or your city, depending on where you live in the state.


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    Dan Simms

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    Dan Simms worked in real estate management for five years before using his experience to help property owners maintain their own homes. He got his master’s degree in English Literature and Creative Writing, and he now enjoys sharing his knowledge about homeownership and DIY projects with others on Today’s Homeowner. When he’s not writing, he’s usually outdoors with his wife and his dog, enjoying mountain biking, skiing, and hiking.

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    Lora Novak meticulously proofreads and edits all commercial content for Today’s Homeowner to guarantee that it contains the most up-to-date information. Lora brings over 12 years of writing, editing, and digital marketing expertise. She’s worked on thousands of articles related to heating, air conditioning, ventilation, roofing, plumbing, lawn/garden, pest control, insurance, and other general homeownership topics.

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