South Carolina's 25% state solar tax credit with a 10-year carryforward provision is one of the most generous solar incentives in the entire country. Unlike most state credits that must be fully claimed in one year, South Carolina allows you to spread the credit over a decade — meaning you capture the full value regardless of your annual tax liability. Combined with 100% sales and property tax exemptions, SC homeowners are in an excellent position to go solar in 2026.
South Carolina Solar Tax Credit
The South Carolina Energy Tax Credit is the cornerstone of the state's residential solar incentive program — and its 10-year carryforward is what makes it exceptional:
- Credit rate: 25% of the total installed system cost
- Annual cap per taxpayer: Up to $3,500 per year
- Carryforward period: Up to 10 years — unused credits roll forward automatically
- Eligibility: South Carolina state taxpayers who own and occupy the property
- System types: Solar photovoltaic systems and solar water heating systems both qualify
To illustrate the power of the carryforward: a homeowner with a $30,000 solar system earns a $7,500 state credit. If their annual SC tax liability is only $2,500, they claim $2,500 in year one, $2,500 in year two, $2,500 in year three — exhausting the full $7,500 over three years. No value is lost, regardless of tax bracket or annual liability.
Federal ITC Status in South Carolina
The federal tax credit situation in 2026 is the same as the rest of the country:
- Residential ITC (Section 25D): Expired December 31, 2025 per the "One Big Beautiful Bill." SC homeowners installing solar in 2026 cannot claim the 30% federal residential credit.
- Commercial ITC (Section 48E): Fully active at 30% through 2027. South Carolina business owners, commercial property owners, and agricultural operations with solar installations retain full access to the federal credit.
The loss of the federal residential ITC makes South Carolina's 25% state credit even more important in 2026. The state credit partially offsets the incentive gap left by the federal credit expiration.
Sales Tax Exemption in South Carolina
South Carolina exempts solar energy equipment and installation from state sales tax. The exemption covers all equipment and materials used in a solar installation:
- Solar panels, inverters, and all associated electrical components
- Mounting hardware and racking systems
- Battery storage systems installed alongside solar
- All installation labor
South Carolina's combined state and local sales tax averages 7–8%. On a $28,000 system, this exemption represents approximately $2,000–$2,240 in immediate savings applied at the point of sale.
Property Tax Exemption in South Carolina
Solar energy installations in South Carolina are exempt from property tax assessment under state law. Your home's assessed value can increase due to solar without any corresponding increase in your annual property tax bill. This exemption:
- Applies to all residential solar photovoltaic installations
- Covers both panels and any accompanying battery storage
- Is permanent — no annual renewal or reapplication required
- Is automatic — your county assessor applies the exemption when the system is permitted
Net Metering in South Carolina
South Carolina has a statewide net metering framework that applies to all investor-owned utilities. Net metering credits are available at the full retail rate in most cases:
- Duke Energy Carolinas: Net metering at retail rate, serving the Charlotte metro and upstate SC areas
- Duke Energy Progress: Net metering available in its SC service territory
- Dominion Energy South Carolina: Net metering program with retail-rate credits for residential customers
- Rural electric cooperatives: Most offer net metering — terms vary by co-op. Legacy Energy confirms program details for your specific co-op before installation.
Dominion Energy SC Programs
Dominion Energy is one of the primary utilities in South Carolina and has been expanding solar access for its customers. Dominion SC customers can benefit from:
- Net metering: Full retail credits for excess solar production exported to the grid
- Streamlined interconnection: Dominion has improved its residential solar interconnection process in recent years, typically completing approvals within 30–45 days
- Stackable incentives: SC state credit, property tax exemption, and net metering all apply simultaneously for Dominion customers
Get a free South Carolina solar assessment — claim your 25% state credit
Legacy Energy handles all SC tax credit filing paperwork and utility interconnection applications. Get your free assessment and learn exactly what you'll save.
Example Savings Calculation
Here's a concrete example for a typical South Carolina homeowner in 2026:
| Incentive / Factor | Amount | Notes |
|---|---|---|
| System cost (10 kW) | $30,000 | Typical installed cost in SC |
| SC State Tax Credit (25%) | −$7,500 | Spread over ~3 years at $2,500/year |
| Sales Tax Exemption | ~−$2,100 | ~7% on $30,000 system cost |
| Net effective cost | ~$20,400 | Before monthly savings |
| Monthly utility savings | $110–$230 | Depends on utility and usage |
| Estimated payback | 6–8 years | With state credit applied |
| 25-year total savings | $35,000–$65,000 | Includes rate escalation |
Best Areas for Solar in South Carolina
South Carolina averages 5.2 peak sun hours daily statewide — a strong resource that makes solar highly productive across the state. The best cities and regions for solar in SC include:
- Columbia: State capital and largest metro, averaging 5.3 peak sun hours — strong Duke Energy and Dominion presence with good net metering programs
- Charleston: Coastal location, 5.2 peak sun hours, Dominion Energy service territory with growing solar adoption
- Greenville/Spartanburg: Upstate SC, Duke Energy Carolinas territory, 5.1 peak sun hours, strong commercial solar market
- Myrtle Beach: Grand Strand area, 5.3 peak sun hours, excellent solar production potential year-round
