A Complete Guide to North Carolina Solar Incentives, Tax Credits, And Rebates [2024]

Are you a North Carolina homeowner considering going solar but worried about the upfront costs? You’re not alone. The high initial price tag of solar panel systems is a common concern that holds many people back from making the switch to clean, renewable energy.

But here’s the good news: there are numerous solar incentives, rebates and tax credits available in North Carolina that can significantly reduce your out-of-pocket expenses. In fact, with the right combination of programs, you could save thousands on a new solar installation and start enjoying lower electricity bills sooner than you think.

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However, skimming through all the different solar incentives can feel overwhelming. What options are you eligible for? How do you apply? How much can you actually save? Without clear answers to these questions, you may be tempted to put off your solar project indefinitely.

In this article, we’ll break down all the need-to-know information about North Carolina’s most lucrative solar incentives in 2024.

With these money-saving tips, you can feel confident taking the next steps to power your home with sunshine while keeping more money in your pocket.

Federal Solar Investment Tax Credit (ITC)

The Federal Solar ITC is one of the most significant financial incentives available to homeowners who install solar panels in North Carolina and across the United States.

What it is

The ITC is a federal tax credit that allows you to deduct a percentage of your solar system’s installation costs from your income taxes. It was first introduced in 2006 and has been extended multiple times to encourage the adoption of solar energy.

Financial benefits

As of 2024, the ITC provides a tax credit equal to 30% of the total cost of your solar installation. This includes not only the cost of the solar panels themselves but also labor, permitting fees, and additional equipment like inverters and mounting hardware.

For example, if your solar system costs $20,000 to install, you’d be eligible for a $6,000 credit on your federal income taxes. This is a dollar-for-dollar reduction in your tax liability, not just a deduction.

There is no cap on the size of the solar system or the total credit amount you can claim. The larger your solar investment, the bigger your potential tax break.

Eligibility criteria

To claim the Federal Solar ITC, you must meet the following criteria:

1. You must own your solar panels, either by purchasing them outright or financing them with a loan. Leased solar systems are not eligible
2. Your solar system must be installed and operational during the tax year for which you’re claiming the credit
3. The solar panels must be located at your primary or secondary residence in the United States. Off-site community solar projects also qualify
4. You must have sufficient tax liability to claim the full credit in one year. If your tax bill is lower than your credit amount, you can roll over any unused portion to future years

How to claim

To claim the Federal Solar ITC, you’ll need to complete IRS Form 5695 and attach it to your federal tax return for the year your solar system was installed.

Form 5695 calculates the exact value of your solar tax credit based on your system costs. You’ll then enter the result on your 1040 tax form.

Be sure to keep all receipts and documentation related to your solar installation. You’ll need to provide proof of costs if the IRS requests additional verification.

ITC step-down schedule

The 30% Federal Solar ITC rate is locked in for solar projects that begin construction in 2022-2032. After that, the credit steps down according to this schedule:

• 26% for projects that begin construction in 2033
• 22% for projects that begin construction in 2034
• 0% for residential projects that begin construction in 2035 or later (commercial projects drop to a permanent 10% credit)

To maximize your savings, it’s best to install your solar system before the ITC decreases. However, even at lower credit rates, the ITC can still significantly reduce your solar costs.

The Federal Solar ITC is a fantastic incentive that makes going solar much more affordable for North Carolina homeowners. When combined with state and local incentives, it can dramatically lower your solar payback period and increase your long-term savings.

Property Tax Exemption

North Carolina offers a valuable property tax exemption for homeowners who install solar panels. This incentive ensures that you won’t pay higher property taxes as a result of the value your solar system adds to your home.

What it is

In North Carolina, 100% of the appraised value of a residential solar energy system is exempt from property taxes. So, even though solar panels typically increase home value, that added value is not counted when assessing your property for tax purposes.

The property tax exemption is automatic and does not require an application. It applies as soon as you register your solar PV system with your county’s tax assessor.

Financial benefits

Here’s an example of how the property tax exemption can save you money over time:

• According to Zillow, solar panels raise a home’s value by an average of 4.1%. For a median-valued $300,000 home in North Carolina, that’s a $12,300 increase in assessed value.
• Without the exemption, at an average property tax rate of 0.77%, you’d pay an extra $95 per year in property taxes for going solar.
• But thanks to the exemption, you’ll continue paying property taxes only on your original assessed home value, saving you that $95 every year.
• While $95 per year may not seem like much, those savings add up over time. If you own your solar home for 20 years, you’d avoid $1,900 in added property taxes. That’s on top of the money you’ll save from other incentives and lower electricity bills.

Eligibility criteria

The property tax exemption is available to all residential solar energy systems in North Carolina. The system must be owned by the homeowner, not leased from a third party.

The exemption only applies to the value added by the solar panels themselves. It does not exempt the value of any extra land purchased for the solar installation .

Automatic exemption

Unlike tax credits or rebates that require paperwork to claim, the property tax exemption is applied automatically by your local tax assessor. You don’t need to submit any forms or applications to qualify.

However, you do need to register your solar panels with your county tax assessor after installation. This allows them to accurately assess your home without factoring in the value of your solar system.

The property tax exemption is a great perk for North Carolina solar homeowners. It’s an ongoing benefit that protects you from paying higher taxes on the value your environmentally-friendly investment adds to your home.

PowerPair Solar and Battery Rebate (Duke Energy)

Duke Energy’s PowerPair rebate program offers significant incentives for North Carolina homeowners who install new solar panels and battery storage systems together.

What it is

PowerPair is a pilot program approved by the North Carolina Utilities Commission in January 2024. It aims to make solar + storage more affordable while allowing Duke Energy to test the impacts of distributed solar and batteries on grid stability and peak demand reduction[3][8].

Financial benefits

The PowerPair rebate provides:

• $0.36 per watt for solar panels, up to 10 kW AC and capped at $3,600 per home
• $400 per kWh for battery storage, up to 13.5 kWh and capped at $5,400 per home
• A maximum total rebate of $9,000 for solar and batteries installed together

On top of the upfront rebate, participants who enroll in the EnergyWise/Power Manager Battery Control program can earn an additional $30-40 per month for allowing Duke to control their battery up to 36 times per year].

When combined with the 26% federal solar tax credit, the PowerPair incentives could cut the cost of a typical solar + storage system in half. For example, a $45,000 10kW solar + 13.5kWh battery system would have a net cost of just $25,200 after the rebate and tax credit.

Eligibility criteria

• To qualify for the PowerPair rebate, you must:
• Be a residential Duke Energy customer in North Carolina
• Own the home where the system is installed
• Install a new solar + battery system (additions to existing solar don’t qualify)
• Use a participating Duke Energy Trade Ally installer
• Apply for the rebate within 90 days of the system’s installation[3][7]

Application process

1. Get your solar + battery system designed and submit an interconnection request to Duke Energy. This must be done before applying for PowerPair.
2. Apply for the PowerPair rebate between May 10 and June 7, 2024. If applications exceed the program capacity, participants will be selected randomly and some will be waitlisted.
3. Duke Energy will notify you if your application is approved for a rebate or put on the waitlist. If approved, you’ll have 270 days to complete the installation.
4. Once your solar + battery system is installed and operational, submit the final paperwork to Duke Energy to receive your rebate payment.

The PowerPair program capacity is limited to 60,000 kW of solar, which is expected to serve around 6,000 homes at the max 10 kW size. Spots are likely to fill up quickly, so it’s best to start the process early with a Duke Energy Trade Ally.

North Carolina Net Metering

Net metering is a billing arrangement that allows you to send excess electricity generated by your solar panels to the grid in exchange for credits on your utility bill. It’s a key incentive that helps you maximize the value of your solar investment over time.

What it is

Under net metering, your utility company will install a bi-directional meter that tracks both the electricity you draw from the grid and the excess solar power you send back to it.

When your solar panels produce more electricity than your home needs, the surplus energy flows to the grid, and your meter runs backwards. You’ll receive bill credits for this excess generation at the full retail electricity rate.

Later, when your solar panels aren’t producing enough power (like at night or on cloudy days), you’ll draw energy from the grid and use up your net metering credits. This allows you to offset your electricity costs even when your panels aren’t actively generating power.

Financial benefits

Net metering can significantly reduce or even eliminate your monthly electricity bills. Here’s an example of how it works:

• Let’s say your solar panels produce 900 kWh of electricity in a month, but your home only uses 800 kWh.
• The extra 100 kWh is sent to the grid, and you receive credits on your bill equal to 100 kWh multiplied by your retail electricity rate (e.g., $0.12/kWh).
• So, you’d earn $12 in net metering credits for that month.
• If your home used 900 kWh the following month, but your panels only produced 800 kWh, you’d draw 100 kWh from the grid.
• Instead of paying for that 100 kWh, you’d use the $12 in credits you banked the previous month, resulting in no net electricity costs.

Over time, net metering allows your solar panels to serve as a “virtual battery,” storing excess energy in the form of bill credits that you can use whenever you need them. This helps you save money on electricity costs for the entire lifetime of your solar system.

Eligibility criteria

In North Carolina, net metering is available to customers of three major utility companies:

1. Duke Energy 
2. Dominion Energy 
3. Other electric cooperatives and municipal utilities

To be eligible for net metering, your solar system must meet the following criteria:

• It must be sized to offset all or part of your home’s electricity demand (no larger than 100% of your usage).
• It must meet all applicable safety and performance standards.
• You must have an interconnection agreement with your utility company.

Enrollment process

To enroll in net metering, you’ll need to follow these steps:

1. Install your solar panels and obtain all necessary permits and inspections.
2. Submit an interconnection request to your utility company. They’ll review your system to ensure it meets all requirements.
3. Once approved, your utility will install a bi-directional net meter at your home and provide you with a net metering agreement to sign.
4. After the agreement is finalized and your system is connected to the grid, you’ll start receiving net metering credits on your monthly electricity bills.

It’s important to note that net metering policies can vary by utility company, and some details like credit rollover periods may differ. Be sure to check with your specific utility for their most up-to-date net metering guidelines.

Piedmont Electric Corporation Renewable and Solar Energy Loan Program

Piedmont Electric Membership Corporation (PEMC) offers a special loan program to help its members finance the installation of solar panels and other renewable energy systems.

What it is

The Renewable and Solar Energy Loan Program provides low-interest loans to PEMC members who want to install solar panels, solar water heaters, or geothermal heat pumps at their homes or businesses.

The loans are designed to make it easier for members to afford the upfront costs of going solar, which can be a barrier for many homeowners. By providing financing at competitive rates, PEMC aims to encourage more of its members to adopt renewable energy technologies.

Financial benefits

Here are the key financial benefits of the PEMC Renewable and Solar Energy Loan Program:

• Loans are available for up to $20,000 for solar PV systems, $10,000 for solar water heaters, and $15,000 for geothermal heat pumps.
• The interest rate is fixed at 6% APR for the life of the loan.
• Loan terms range from 3-10 years, depending on the loan amount and type of system installed.
• There are no application fees, annual fees, or prepayment penalties.
• Monthly loan payments are conveniently added to your existing PEMC electric bill.

For example, if you borrowed $20,000 at 6% APR to install solar panels, your monthly payments would be around $222 over a 10-year term. This predictable financing can make it much easier to budget for your solar investment and start saving on energy costs right away.

Eligibility criteria

To qualify for the PEMC Renewable and Solar Energy Loan Program, you must meet these requirements:

1. You must be a current PEMC member with an active electric account .
2. You must own the property where the renewable energy system will be installed
3. You must have a good payment history with PEMC and meet their credit requirements
4. The renewable energy system must be installed by a licensed contractor and meet all applicable codes and standards
5. The system must be inspected and approved by PEMC before the loan funds are disbursed

Application process

To apply for a PEMC Renewable and Solar Energy Loan, follow these steps:

1. Get quotes from licensed contractors for your solar or renewable energy project.
2. Contact PEMC to discuss your project and obtain a loan application.
3. Submit your completed application along with supporting documents like contractor quotes and proof of property ownership.
4. If approved, sign the loan agreement and any other required paperwork.
5. Have your renewable energy system installed and inspected by PEMC.
6. Once approved, PEMC will disburse the loan funds to you or directly to your contractor.
7. Start making monthly loan payments as part of your PEMC electric bill.

The PEMC Renewable and Solar Energy Loan Program is a valuable resource for North Carolina homeowners who are members of the cooperative. By providing affordable financing options, it can help you overcome the initial cost barrier to going solar and start enjoying the benefits of clean energy sooner.

Duke Energy Solar Rebate for Businesses

Duke Energy, one of the largest utility companies in North Carolina, offers a generous rebate program to help businesses offset the cost of installing solar panels.

What it is

The Duke Energy Solar Rebate Program provides upfront incentives to non-residential customers who install new solar photovoltaic (PV) systems on their properties. This includes businesses, commercial buildings, nonprofit organizations, and government facilities .

The rebate is designed to reduce the initial cost of going solar, making it more affordable for businesses to invest in clean energy. By encouraging more commercial solar adoption, Duke Energy aims to support North Carolina’s clean energy goals and reduce demand on the grid.

Financial benefits

The Duke Energy Solar Rebate Program offers the following incentives for non-residential customers:

• Businesses and commercial buildings: $0.50 per watt of installed solar capacity, up to a maximum of $50,000 per installation .
• Nonprofit organizations: $0.75 per watt of installed solar capacity, up to a maximum of $75,000 per installation .

For example, if a business installs a 50 kW solar system, they would be eligible for a rebate of $25,000 (50,000 watts x $0.50/watt). If a nonprofit installs the same size system, they would receive a rebate of $37,500.

These rebates can significantly reduce the upfront cost of installing solar, making it easier for businesses to achieve a faster payback period and higher return on investment. When combined with other incentives like the Federal Solar Tax Credit and accelerated depreciation, the savings can be even greater.

Eligibility criteria

To qualify for the Duke Energy Solar Rebate Program, businesses must meet the following criteria:

1. They must be a non-residential Duke Energy customer in North Carolina with an active electric account
2. The solar PV system must be owned by the customer, not leased or financed through a power purchase agreement (PPA)
3. The system must be grid-tied and meet all applicable codes, standards, and interconnection requirements
4. The system must be installed by a licensed contractor and approved by Duke Energy
5. The customer must agree to participate in Duke Energy’s SunSense data monitoring program for at least five years.

Application process

Here’s how businesses can apply for the Duke Energy Solar Rebate Program:

• Get quotes from licensed solar contractors and select an installer for your project.
• Submit a rebate reservation request to Duke Energy, either directly or through your solar installer. Reservations are accepted on a first-come, first-served basis until annual funding is exhausted .
• If your reservation is approved, Duke Energy will provide you with a rebate agreement to sign and return.
• Install your solar PV system within 365 days of your reservation approval date.
• After installation, submit a rebate claim form to Duke Energy along with supporting documentation like proof of purchase and interconnection approval.
• Duke Energy will review your claim and, if approved, issue your rebate check within 60 days.

It’s important to note that the Duke Energy Solar Rebate Program has limited funding available each year, and reservations can fill up quickly. Businesses are encouraged to apply as early as possible to secure their spot in the program.

USDA REAP Grant

The USDA REAP Grant provides financial assistance to agricultural producers and rural small businesses in North Carolina to install renewable energy systems or make energy efficiency improvements.

What it is

REAP grants are awarded on a competitive basis to help fund renewable energy systems and energy efficiency improvements for agricultural producers and rural small businesses. The grants can cover up to 25% of total eligible project costs.

Eligible renewable energy projects include solar, wind, biomass, geothermal, micro-hydro and other commercially available renewable technologies. Energy efficiency projects can include lighting, heating, cooling, ventilation, fans, automated controls and insulation.

Financial benefits

For renewable energy systems, the REAP grant can cover:

• 25% of eligible project costs
• Minimum grant of $2,500
• Maximum grant of $500,000 [2][6]

For energy efficiency improvements, the REAP grant can cover:

• 25% of eligible project costs
• Minimum grant of $1,500
• Maximum grant of $250,000 [2][6]

Agricultural producers and rural small businesses can also apply for REAP loan guarantees in conjunction with the grant to cover up to 75% of total project costs [9].

Eligibility criteria

To be eligible for a REAP grant in North Carolina, applicants must meet the following criteria:

Agricultural producers must:

• Be directly engaged in agricultural production
• Derive at least 50% of their gross income from agricultural operations
• Demonstrate that the renewable energy or energy efficiency project will benefit their agricultural production

Small businesses must:

1. Be located in an eligible rural area (typically with a population under 50,000)
2. Meet the SBA size standards for a small business based on the number of employees or annual receipts

The renewable energy or energy efficiency project must be for a pre-commercial or commercially available technology. Residential projects are not eligible [6].

Application process

Here are the key steps to apply for a REAP grant in North Carolina:

1. Obtain a DUNS number and register your business with SAM.gov.
2. Gather required documents, including financial statements, project cost estimates, matching funds documentation, and a technical report or energy assessment.
3. If total project costs exceed $200,000, a third-party feasibility study is required.
4. Complete the appropriate REAP grant application form (RD 4280-3A, 3B or 3C depending on project size) along with supporting forms like SF-424, SF-424C, SF-424D, RD 1940-20 and AD-3030.
5. Submit your application package to USDA Rural Development’s North Carolina energy coordinator before the grant deadline. In 2024, REAP applications are due March 31 and October/November (date TBA)].
6. If selected for funding, complete any additional paperwork and follow the terms of the grant agreement to receive funds and implement your project.

Organizations like the WNC Energy Cost-share Assistance Program (EnergyCAP) can provide application assistance for a small fee to help guide agricultural producers and rural small businesses through the REAP process.

Frequently Asked Questions

Is It Worth Going Solar in North Carolina?

Yes, going solar in North Carolina is worth it for many homeowners. With a combination of federal and state incentives, solar shoppers in North Carolina can significantly reduce their upfront costs and enjoy substantial long-term savings on electricity bills. Factors like high electricity rates, the state’s favorable net metering policies, and ample sunshine make North Carolina one of the best states in the U.S. for homeowners to invest in solar.

To learn more about North Carolina solar incentives, check out our complete guide.

Can you get free solar panels in North Carolina?

No,, you cannot get completely free solar panels in North Carolina.

However, there are several incentives, rebates, and financing options that can significantly reduce the cost of going solar, making it much more affordable:

1. While you can’t get free solar panels, North Carolina solar rebates and credits help lower installation costs, making it more affordable to go solar
2. Power Purchase Agreements (PPAs) and solar leases allow you to have solar panels installed for little to no upfront cost, but you don’t own the system and must purchase the electricity it generates
3. Solar loans let you invest in solar with little or no money down while enjoying the benefits of cheaper electricity
4. The Duke Energy Solar Rebate Program offers rebates of $0.60/watt for residential, $0.50/watt for commercial, and $0.75/watt for nonprofit customers, which can significantly reduce costs
5. The federal solar tax credit (ITC) allows you to deduct 30% of your solar system’s cost from your federal taxes, substantially lowering the effective price.
6. Net metering and other utility incentives in North Carolina further improve the financial benefits of going solar.

While it’s not possible to get solar panels installed completely free in North Carolina, the combination of rebates, tax credits, financing options, and ongoing savings makes solar a very attractive and affordable investment for many homeowners in the state.

What is the average payback period for solar panels?

The average solar payback period in North Carolina is around 13 years, with a typical range of 10 to 16 years. This is slightly higher than the national average of 12 years.

Factors that influence the payback period include the size of the solar system, electricity consumption, installation costs, and available incentives.

North Carolina has lower solar installation costs compared to the national average, at about $2.54 to $3.04 per watt before incentives. The average cost of a residential solar system in North Carolina is around $18,669 to $23,700 before incentives for a typical 7.8 kW to 10.5 kW system.

While North Carolina has slightly lower electricity rates than the national average, the state’s higher-than-average energy consumption (1,041 kWh vs. 893 kWh nationally) makes solar a valuable investment for many homeowners.

After the payback period, North Carolina homeowners can expect around 12 years of additional energy savings, given the 25+ year lifespan of solar panels.

The payback period in North Carolina is slightly longer than the national average of 8.7 years due to the state’s relatively low electricity costs.