South Carolina Solar – Everything You Need to Know


Information about Solar Panels in South Carolina

Not many states can claim that their official amphibian is the salamander. Or that their official pastime is watching two highly decorated college football teams smash the living daylights out of each other. Or that they have the highest rates of front-porch sweet tea drinkers per capita.

With delightful amphibians, delightful summer evenings, and delightful football rivalries, South Carolina is also a delightful state to go solar. With unbelievable financial incentives and fantastic pro-solar policies, the time to go solar in South Carolina is now! To find out just how delightful going solar in South Carolina can be, we've painstakingly prepared this article for your eyes only.

If you're a resident of the Palmetto State, or soon to be a resident of the Palmetto state, or just want to learn about all things South Carolina (perfectly understandable), then boy are you in for a treat.


#1 Are Solar Panels Worth it in South Carolina?

Overall Grade
10 years Avg. Payback Time (For Cash Purchase)
10.7 % Estimate IRR (Return on your investment on cash purchase over 25 years)
$19,902 Your Net Profit Over 25 Years (Cash Purchase)

* Note that these are estimated values for informational purposes only, and do not take into account the full complexity of all financial projections. They also only apply to cash purchases, which means your numbers will be different if you lease your system or pay for it with a loan (factoring in interest). Also note that we are not financial advisors, so this information should not be construed as financial advice.

Like any self-respecting solar site, we at UnderstandSolar have a fancy rating system to compare the solar offerings of each state. How it works is simple. Using a multitude of factors - electricity bills, average daily sun hours, panel efficiency degradation, official amphibians - we calculate the average number of years a 5kW solar system purchased with cash will take to pay itself off. We then give it a rating, from A (Amazing) to F (Fairly Terrible).

On said scale, South Carolina comes in strong with B rating, with an average years-to-payback of 10 years. This is somewhat remarkable, given that a few years back South Carolina wouldn't touch solar with a barge pole. Nowadays, thanks to a massive 25% state tax credit, SC is one of the hottest spots for going solar in the country. But before we dig deeper into the Cinderella story, let's talk options.

#2 Options for Buying Solar Panels in South Carolina

Much like bespoke cocktails, hotel bathrooms and watermelons, solar opportunities come in many different shapes and sizes, with options for budgets big and small. Owning the system via a cash purchase or a loan reaps the biggest financial benefits, whereas PPAs and leases offer fewer savings.

Cash Upfront

Purchasing your panels outright is the most lucrative option. You pay no interest, the 55% tax credit (25% state + 30% federal) goes straight into your pocket, plus you get a solar cash cow on your roof that adds value to your home. And there’s no contract involved, so no sneaky Ts&Cs (Terms & Conditions) in the fine print, or escalator fees.

The downside – it ties up your cash. If you’re an investing phenom, you might prefer taking a solar loan and plowing your cash down investor alley, potentially generating greater returns than solar. That said, if you want a solid ROI, and have a low appetite for risk, purchasing solar panels is perfect.

Almost all solar installers offer cash-purchases. Several national installers like SolarCity, Vivint Solar or SunPower have made the trek out east. Alternatively, you’ve got loads of local installers too.

Which should you go with? Most national installers are rapidly growing companies. They offer cheap rates, state-of-the-art equipment, and you can get a quote in seconds. But with expansion, customer service is often left by the wayside. The smaller customer base for local installers means their customer service is generally better.

So to answer the question: it depends on the reputation of installers in your area. If reviews tell you that there’s a strange correlation between SolarCity and disappearing kittens in your neighborhood, maybe go with a local installer. And vice versa, of course.

So, number crunching. Let’s take an example:


  • Price of solar in South Carolina = $3,503/kW (we took pricing data from several sources and calculated the average)
  • Solar System Size = 5kW
  • Electricity cost = $0.1214 /kWh
  • Average monthly electricity use = 1,146kWh  (annual electricity bill = $1,669)
  • Annual rise in electricity cost = 3.3% for South Carolina utilities
  • Annual Solar System output = 6,936kWh (average for South Carolina)
  • Annual decrease in panel efficiency = 0.8% to account for wear-and-tear and general aging of your solar panels

With the assumptions, we get the following:

  • System cost = $17,517
  • MINUS 30% federal tax credit = -$5,255
  • MINUS 25% state tax credit = -$3,500
  • Total cost = $8,762

With the assumptions above, you’ll save around $840 in the first year, which will increase to around $1,890 by year 25. With these numbers, it’ll take 10 years for the system to pay for itself, and you’ll net a cool $23,701 in savings. (And this is excluding the value your home will gain thanks to the panels. More on that later.)

Bottom Line: Installing solar in South Carolina is a safe investment that’ll net you some serious cash over its lifetime. 


Taken at face value, leasing and power purchase agreements (PPAs) seem identical. With a lease, you rent panels from a solar company, which produce electricity, which offsets your utility bill and saves you money. With a PPA, you pay a fixed rate for the energy produced by the panels, which offsets your utility bill and saves you money. In effect, they’re the same thing, right?

Well, no. With a lease, you’re renting the equipment that produces electricity. So if the equipment doesn’t produce electricity, you’ve still got to cough up. Power generation comes SECOND to lease payments. So, if the neighbor’s oak tree decides to obliterate your roof and take your panels with it, you might still have to pay every month. After all, you’re paying for use of the solar panels.

To alleviate some of this concern, many companies that offer leases also offer ‘production guarantees’ stating that, if your solar installation produces less than what’s stated in your contract, they’ll pay you the difference.

With a PPA though, it’s very different. You only pay for the electricity, so if the panels don’t produce, you don’t pay. Moral of the story: be very, very careful about reading solar lease contracts and look carefully for performance guarantees.

There’s also another important difference. Both leases and PPAs can come with escalator fees, usually ranging from 0-2.9% each year. On top of that, the panels on your roof degrade by about 0.08% every year. With a PPA, panel degradation doesn’t matter. Because you pay only for the power, panel degradation is the solar company’s problem.

But with a lease, it’s a different story. As the panels degrade, you’re paying MORE for less power. It might not make much of a difference in the first year, but over a 20-year contract, this can add up!

In summary, PPAs are generally the better option. If you still want to lease, read the contract carefully and make sure the numbers add up. Talk to a few different installers to see what options they have.

With all this being said, both leases and PPAs are financially inferior to cash purchases and loans – you don’t get a cash-generating asset and the increase in home value, you don’t get the 55% tax credits, and you have nothing to show by the end of the contract. However, they don’t require up-front payment, nor do they have the same credit requirements that loans do.

Bottom Line: With a solar lease or PPA, you can still save money, but not nearly as much as you could with a cash or loan purchase.

More: Solar Leases


After cash purchase, a solar loan is the next best financial option in terms of profit. You get all the benefits of ownership – tax credits, cash-generating asset, no 20-year contracts, increased home value – but without the initial up-front cost of purchasing. The downside is, of course, interest (and the bankers that come with it). Although the main reason you’d go for a loan is lack of cash sitting in your bank account, loans make financial sense even if you can afford a purchase.

In South Carolina, taking a standard loan (5% interest, 15 years to repay) for, say, the $8,761 needed for a 5kW system will leave you with positive cash-flow from the start, as the money you save with the panels is always higher than the loan payments. (Of course, for a $8,761 loan, you’d need the additional approximate $9k on hand to buy the system, which would then be reimbursed with tax credits).

By getting a loan, you’d then have the cash you would’ve spent to invest in other things, which if invested in an index fund, for instance, that averages 7% growth a year, would easily make up for the $3,000 or so lost in interest payments for the loan.

As for your options, there are more ways to get a loan than you can eat yogurt:

  • Solar-specific loans. Get them from installers or specialist solar loan companies like Dividend Solar. Interest rates are from 2.99%-8%. It’s handy because your panels and financing are both in the same place. Or not handy, because solar installers don’t make for good financiers. Could go either way, depending on how you slice it.
  • Mortgage loans. With these, you roll the loan on top of your mortgage, thus accessing the cheapest interest rates around. Rates vary from 2.5-5%. Obviously, you have to be buying a home or refinancing a mortgage to get one. They’re offered by Fanny Mae and FHA approved lenders.
  • Home Equity Loans (HEL). These are known as second mortgages, because… it’s like getting a second mortgage. Genius. Also, they’re secured against your home equity, hence home equity loan. Genius-er. You can borrow a lump sum (HEL), or open up a line of credit (HELOC). Rates are around 5% for both. The FHA also offers an HEL, called the PowerSaver Second Mortgage. FHA loans are unsecured, but the FHA will cover you if you can’t cough up. Thus, interest rates are higher, and you have to pay FHA insurance. Interest rates are from 4.99%-9.99%. HEL’s require a strong credit rating and significant equity in your home.
  • PACE (Property Assessed Clean Energy) loans. Unlike conventional loans, you pay back a PACE loan through increased property taxes. Because of this, they don’t go through the rigorous regulations that normal loans do, and thus are very easy to apply for. But because no-one will check up to see if you can afford it, you could get sold something that you can’t pay for. And because PACE loans assume first-lien position on your house, that’s something you do not want to do. Interest rates are usually from 4.75 to 7%.
  • Personal loans. In short: credit cards or unsecured lump sums. Interest rates are extortionate, so you don’t want to go here. Ever. Unless a kidnapper demands you have a 24.7% loan to finance your solar system in exchange for your pet tortoise.

Loan Example:

  • Borrow $8,761.
  • 15 year repayment period.
  • 5% interest rate.
  • Same assumptions as with cash purchase

Assuming you took the whole 15 years to pay it off, (many solar-specific loan companies like Dividend Solar allow you to pay it back early at no additional cost) you’d pay $62 in monthly payments, equating to $748 per year. You’d pay $3,318 in interest, and net $16,590 in savings by the end of 25 years. With annual savings starting around $840 and ending in year 25 at $1,890, you’ll always have positive cash flow.

Bottom Line: You won’t save as much, but going solar with a loan is a great option if you lack the cash for an upfront purchase.

More: Solar Loans

#3 South Carolina Solar Policy Information

South Carolina’s stance on RPS, net metering and interconnection costs are not as rosy as some other states.


Renewable Portfolio Standard

The RPS is a mandate that a percentage of a state’s energy that must be generated by renewables within a certain timeframe. In 2014, South Carolina mandated that 2% of its electricity must come from renewable sources by 2021, which is lousy in comparison to other states (North Carolina’s 12.5% for instance).

South Carolina generates the lion’s share of its energy by renewable means anyway: 55% of its energy is generated by nuclear, and another 5% by hydroelectric. Because such a high percentage of SC’s energy was already produced by renewables, the recent RPS act was somewhat controversial, as it forced the state to develop renewable infrastructure at, it’s argued, excessive cost.

More: Renewable Portfolio Standard (RPS)

Electricity Prices

South Carolinians are bled dry with utility bills. And this isn’t because the electricity is expensive, but because the delightful summer months warrant lots of AC and sweet tea. In 2015, South Carolina ranked #8 for electricity consumption, and #2 for most expensive electricity bills, only topped by Hawaii. Expensive electricity bills make solar a very lucrative proposition indeed.

Net Metering

Net metering refers to whether a state has infrastructure that allows solar panels to send electricity back to the grid, allowing solar customers to be paid credits for excess electricity their systems produce. Obviously, this has a large impact on the profitability of going solar.

South Carolina recently enacted legislation that forces all utility companies with more than 10,000 customers to offer net metering. Thus, if you produce excess energy in one month, you get paid credits which roll over into the next month. Homeowners are paid retail price for their excess electricity, meaning if you pay the utility $0.12/kWh for your electricity, they’ll pay you the same.

At the end of the year, your utility will pay you for any credits left in your account at their ‘avoided cost’ (typically around $0.03/kWh), at which point you’ll start again with a clean slate.

More: Net Metering

Interconnection Rules

Interconnection refers to how electrical systems are connected to the grid. South Carolina adopted an interconnection policy in 2006: you must pay $100 for an interconnection application – your installer will handle it, and the process typically takes 4-6 week. All that to say, it’s not too expensive and you don’t have to worry about a thing.

#4 Financial Incentives, Rebates, and Tax Credits

South Carolina residents can benefit from tax credits as well as an increase in the value of property.


Federal Tax Credit

Uncle Sam will refund 30% of the price of a solar system with a tax credit. If you don’t use it all in one year, the excess rolls into the next. The credits can only be claimed for solar systems on your first property (i.e not rentals).

The credit is due to change in just a couple years, making now a great time to make the solar jump:

  • 30% for systems placed in service by 12/31/2019
  • 26% for systems placed in service after 12/31/2019 and before 01/01/2021
  • 22% for systems placed in service after 12/31/2020 and before 01/01/2022

More: Solar Federal Tax Credit

State Tax Credit

South Carolina state offers a 25% tax credit for solar, hydro and geothermal systems. It has a limit of $3,500, or 50% of the taxpayer’s tax liability for that taxable year, whichever is lower. Excess credits can be carried forward over the following 10 years.

When you add this to the federal tax credit, 55% of a solar system’s cost can be recouped in South Carolina. In our calculations above for a cash purchase, you saw just how powerful this combo can be.

55%. Not a typo.

Utility Based Incentives

Until recently, South Carolina utilities had extremely generous incentives. Duke Energy offered rebates for $1,000/kW for solar systems and SCE&G offered performance-based incentives worth $0.04 per kilowatt hour for installations between 0 MW to 2.5 MW (which includes all residential solar installations).

Both of these programs were met with unprecedented demand, and unfortunately are now closed.

If you’re a customer of Santee Cooper, what you can do if you’re grasping for a utility incentive is buy yourself a stake in the community Colleton Solar Farm. You can buy stakes – that is, a proportional share in the farm, not spiked wooden weapons used to kill vampires – in kW increments, and Santee Cooper will reimburse you $1000/kW.

Given that the price of each stake is $1880/kW, that’s a tasty incentive indeed. Plus you don’t have to put solar panels on your roof, making this the hassle-free solar option. For subscribing, you’ll get a proportional share of the farm’s energy until 2032.

General Increase in Home Value

Based on research by the Appraisal Journal, home value increases $20 for every $1 in annual energy savings. Thus, a 5kW system in South Carolina that nets you around $833 annual energy savings would bag you $16,660 in home value. As energy prices rise, so will your savings, so by year 25, annual savings of around $1,890 equates to $37,800 added to your home’s value.

While this might not be an exact figure of value, at almost $40k, even half of that is not to be sniffed at.

If you’d like to dig even more on local incentives and rebates, check out the DSIRE database.

More: Buyers Will Pay More for Solar Homes

What to Do Next?

Excuse the outrageous pun, but the future for solar in South Carolina has never looked brighter. Recent policy changes, a meaty 25% state tax credit, along with utility support and Uncle Sam’s 30% leg-up have brought the Palmetto state to the threshold of a solar revolution. Plus, with energy bills sky-high, you won’t find many states offering a more lucrative solar harvest.

And then there’s the official amphibians, Blue Ridge mountains, and football…..

Legend has it that the author is relocating to South Carolina as we speak.

P.S. Of course, our gospel is no substitute for shopping around and finding the best quotes in your area. So, see this article as a big-toe dip into the solar pool. The diving coach playing Rocky music and shouting generic, entertaining advice, if you will.

Image Credit under CC License via Pixabay - 1; 2, 3

  • by Iain Harrison
  • |
  • April 22, 2017
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