How Much Do Solar Panels Cost in South Carolina?
South Carolina passed its first solar program back in 2006. A solar energy tax credit was introduced under the program to help the state in its efforts to promote solar energy in Anderson, South Carolina, and other neighboring cities. The tax credit is aimed at reducing the cost of solar panels, thereby encouraging homeowners to go solar. However, the program proved to be ineffective, and the state did not observe any meaningful growth in solar energy until 2016.
While South Carolina was late to the solar revolution, it has been making rapid progress, with cities such as Anderson making the most headway in this stride. The state was listed as the 12th most solar energy generating state in the United States in March of 2021.
As of today, it is estimated that solar power accounts for more than 2% of the state’s energy capacity and usage. This steady growth was and is only feasible because of a few key variables, one of which is the relatively low cost of solar panel installation in the state.
According to the current, post-pandemic condition of the solar market, the average cost of installing solar panels in South Carolina is about $3.03 per watt but can range from $2.58 to $3.58. The average cost homeowners in Anderson, SC have to pay for solar panels can vary from $12,878 to $17,422. Compared to most other states, this cost is relatively quite low.
However, the average cost for solar panels in South Carolina quoted above does not factor in any tax credits or solar incentives offered in the state. The overall installation cost for the entire system will be thousands of dollars lower after factoring in the tax credits and other state and municipal solar incentives.
How to Buy Low-Cost Solar Panels for Home in Anderson, South Carolina
Although the cost of solar panels has reduced by quite a large margin over the years and Anderson, South Carolina, offers some of the most affordable solar panels in the United States, many average homeowners can still find this cost to be unbearable. Fortunately, there are a few ways you can lower the cost of solar panels in Anderson, South Carolina, even further. Let’s take a look at some of the ways you can buy low-cost solar panels for home in Anderson, South Carolina.
Claiming the Federal Solar Tax Credit
One of the most effective ways to find low-cost solar panels for homes in Anderson, South Carolina, is to claim the Federal Solar Tax Credit (ITC) offered in the entire state of South Carolina as well as in most other states.
The ITC program is a tax credit offered by the federal government to solar owners in an effort to lower the cost of solar panels and promote the installation of residential solar panel systems. Up until 2019, the ITC program offered new solar owners a 30% tax credit; as of now, the tax credit stands at 26% for all systems installed between 2020 and 2022. Thereafter, the tax credit will fall to 22% till the end of 2023, after which the program will be terminated unless congress extends it further.
How does the tax credit work, you wonder? Let’s say you have a 5kW solar system installed in your home. Taking an average price of $3.03 per watt, the system would cost you $15,150. Calculating a 26% tax credit on this amount gives us $3,939. This means that the ITC program reimburses you by almost four thousand dollars and drives the cost of your system down to $11,211.
How will you receive this amount, you ask? The $3,939 dollars will be returned to you in the form of tax credits, allowing you to reduce your annual tax bill by this amount. In short, the ITC program reimburses you in the form of tax savings. In the case that your annual tax bill is lower than the tax credit you earn on your system, you can rollover the remaining credit over to the next year and use it to lower your annual tax credit for the following year.
Do keep in mind, however, that the calculations above have been done using average values. That is why it is highly likely that the actual cost of your system will differ from this value. Furthermore, it is also worth knowing that the Federal Solar Tax program does not apply to leased systems.
Claiming the South Carolina Solar Tax Credit
The South Carolina solar tax credit is a state-based incentive for solar owners as well as various other renewable systems such as a small hydropower system, given that it will be used for water heating, air cooling, space heating, heat reclamation, energy-efficient daylighting, energy-efficient demand response, or the electricity generation in a property.
The tax credit program offers a tax credit return equaling 25% of your system’s net installation cost. Similar to the Federal Solar Tax Credit Program (ITC) described above, this program also offers you return only in the form of tax credits which you can use to lower your tax liability for the year.
According to the terms and conditions of the incentive program, a taxpayer can claim only 50% of their tax liability or $3,500 in tax credits, whichever is lower in value, in any one tax year. If the solar owner has any remaining credit, it can be carried over to the next year. The tax credit you earn will be valid for ten years. There are also some eligibility requirements that your system must meet in order to claim the tax incentive.
Claiming the South Carolina Solar Tax credit on top of the ITC program can substantially lower the cost of your solar system. Considering the example above, a typical 5kW residential system in Anderson, South Carolina, would cost you $15,150 on average.
The 26% tax return offered under the ITC program would offer you $3,939 in tax credits. Factoring in the 25% tax return on the system offered by the South Carolina tax credit program would get you approximately $3,787 in tax returns. This means that the net installation cost of your solar system becomes $7,424 ($15,150 – $3,939 – $3,787 = $7,424).
Seeing as how the South Carolina solar tax credit program is a state-based incentive program, it is available in all cities and counties situated in South Carolina, including Anderson, SC. In view of this, we can conclude with certainty that using the two tax credit programs above; you can easily procure low-cost solar panels for homes in Anderson, South Carolina.
Utility Solar Power Incentives
Some utility companies in South Carolina also offer incentives and rebates that can cover a portion of the cost of your solar panels. However, whether or not you’re eligible for utility offered incentives depends on your utility and whether they even offer solar rebates and incentives.
These incentives, unlike the ITC, do not offer tax credits. Instead, they usually involve the utility paying you for every kilowatt-hour (kWh) of electricity you produce. Customers of Santee Cooper – a state-owned electric and water utility company, for example, are eligible for a repayment of $1.05 per watt of solar energy they produce for a maximum of $6,300.
Take Advantage of Net Metering
South Carolina is one of the few states in the United States that offers net metering benefits to solar owners. Net metering is essentially a policy that allows solar owners to monetize the surplus energy their solar systems produce. The surplus energy can be sold to the grid earning you credits that can be used to reduce your utility bill.
Although this does not reduce the cost of your solar system upfront, net metering can earn you consistent and steady savings on your electric bill, which can enable the system to pay you back for the installation cost more quicker. Since the net metering policy is offered throughout South Carolina, solar owners in Anderson, South Carolina, can also enjoy its benefits.
As such, net metering is a holy grail for solar owners that indirectly can help you purchase low-cost solar panels for homes in Anderson, South Carolina.
Solar PPA – The Perfect Alternative to Buying Low-Cost Solar Panels for Home in Anderson, South Carolina?
What is a Solar PPA?
A solar power purchase agreement, or simply solar PPA, can be described as a financial contract between a homeowner and a solar developer in which the installer covers the permitting, designing, installation, and financing of a solar panel system on the homeowner’s property. In return, the homeowner buys solar energy generated by the system from the developer at a predetermined rate that is usually lower than the retail rate charged by the local utility.
What’s in it for the developer? The developer enjoys the cash returns generated from the sale of the electricity, in addition to any solar tax incentives and credits that the system qualifies for. On the other hand, you, as the homeowner, receive electricity at lower than market rates that can offset the cost of your grid purchase.
Usually, solar PPAs last for 10 to 25 years, and for the entire term of the contract, the developer holds the responsibility for the system’s performance and upkeep. A client may be allowed to purchase the solar energy system from the developer, extend the PPA contract period, or have the developer disassemble the system at the conclusion of the PPA contract term.
Is Solar PPA a Wiser Alternative to Buying Solar Panels?
A solar power purchase agreement does come with many benefits such as no upfront cost, lower than market electricity rates, little to no investment required, independence from grid energy, and of course, clean, green, and sustainable energy.
At a moment’s glance, solar PPA appears to be the perfect solution for average homeowners wanting to go solar. However, on looking closely, one can see that a solar PPA also deprives the homeowner of some of the benefits that purchasing a solar panel system would’ve offered them. For instance, solar PPA will not appreciate the value of your home by as much, if at all, as buying solar panels would.
Additionally, while PPA does offer you independence from grid-supplied energy, it also binds you to the developer you signed the solar PPA. You also cannot claim the federal or South Carolina tax credits or any other solar incentives as you do not own the system.
Let’s not forget that however much you pay for the solar installation cost when buying a system, your system will pay you back in the form of utility bill savings, solar incentives, credits, raised home values, and net metering. In fact, you can recoup the entire installation cost in a mere 6.7 to 9.1 years. After that period, your system is essentially earning you money.
Considering the long-term benefits of owning solar panels in South Carolina, which tend to compound the longer you keep the system, it is clear that buying a solar panel system is better than signing a solar PPA.
Frequently Asked Questions (FAQs)
Does South Carolina Offer Solar Tax Credit?
South Carolina offers a 26% Federal tax credit on newly installed solar systems up until December 31, 2022. There are also state and utility-based solar incentives available in South Carolina.
Does Solar Make Sense in South Carolina?
South Carolina is ranked among the top 15 states that are most favorable for going solar. Policies such as the Federal Solar Tax Credit, net metering, and the South Carolina solar tax credit have made the state very attractive for solar energy.
What Is the Average Cost for Solar Panels in South Carolina?
The average cost of installing solar panels in South Carolina is about $3.03 per watt and tends to range between $2.58 and $3.58. The average cost homeowners in Anderson, SC have to pay for solar panels can vary from $12,878 to $17,422. However, these are preliminary values and do not account for the ITC policy or any other solar incentive.
Can Homeowners Get Free Solar Panels?
While getting solar panels for free may not be a possibility, however, when looking at the big picture, one could say that the savings, tax benefits, and increment in property value that solar panels earn you qualifies these systems to be categorized as free. This is because, in a few years’ time, the system will pay for itself entirely and, after that, will be earning you consistent savings.
Owing to the numerous solar tax credits, rebates, and incentives, it is now very easy for homeowners to find low-cost solar panels for homes in Anderson, South Carolina, as well as in other surrounding cities. This reduction in the cost of solar systems has made South Carolina one of the most solar-friendly states in the United States. The result is that South Carolina has one of the fastest-growing solar industries in the entire country.
The team at Firefly Solar is ready to answer your questions and give you a no-obligation price quote. Feel free to call us at 864-252-7858 or book a consultation online. And we’ll get in touch within 24 hours.