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How to Save Big with Solar Panels in South Carolina

Solar energy is on the rise in South Carolina, with installations jumping 36% in 2021 alone. The Palmetto State now boasts over 1,700 megawatts (MW) of solar capacity – enough to power more than 200,000 homes.

South Carolina‘s solar boom is remarkable given its lack of strong state-level clean energy policies. Unlike many of its neighbors, South Carolina has no mandate requiring utilities to source a minimum amount of renewable power. Its voluntary renewable portfolio standard of 2% solar by 2021 has already been far surpassed.

So what‘s behind the impressive solar growth? A perfect storm of low costs, generous incentives, and smart investments by utilities and homeowners alike. For South Carolinians considering the switch to solar, there‘s never been a better time to make the leap. This in-depth guide breaks down everything you need to know to maximize your solar savings in the Palmetto State.

Solar Costs and Savings Outlook

First, let‘s crunch the numbers. South Carolina enjoys some of the lowest solar prices and highest energy bill savings potential in the country, translating to serious financial benefits for those who go solar.

According to market data from EnergySage, the average pre-incentive cost of residential solar panels in South Carolina is $2.49 per watt as of early 2023. For a typical 6 kilowatt (kW) home solar system, that equals an upfront price of about $14,940.

Already, that‘s well below the U.S. average of $3.00 per watt. But South Carolinians can slice those costs down even further, thanks to a slew of generous state and utility incentives (more on those in a bit). When you factor in the 30% federal tax credit, a typical 6 kW system ends up costing just $6,458 out of pocket.

So how much do those panels actually save you? With South Carolina‘s higher-than-average electricity rates, solar homes see substantial bill reductions from day one. Over 25 years, the average 6 kW system offsets about $44,724 in energy costs, according to a SolarReviews analysis.

After subtracting the initial investment, that‘s a net savings of $29,784 – an eye-popping 461% return. Most South Carolina solar panel systems fully pay for themselves within 4-6 years, leaving decades of free, clean electricity to enjoy.

Solar Savings Data South Carolina Average
Solar cost per watt (pre-incentive) $2.49
Solar cost per 6 kW system (pre-incentive) $14,940
Net cost per 6 kW system (after tax credits) $6,458
Est. 25-year energy savings per 6 kW system $44,724
Net 25-year savings $29,784
Solar payback period 4-6 years

Of course, your exact solar costs and savings depend on numerous factors, including your location, energy usage, loan terms, and the size and orientation of your roof. More shade or a smaller system will mean less energy production and savings. But even in less-than-ideal scenarios, most South Carolinians still come out way ahead by going solar.

Cashing in on South Carolina‘s Solar Incentives

A major factor driving solar affordability in the Palmetto State is its bounty of financial incentives, which slash installation costs by 55% or more. Here‘s a rundown of the top programs:

Federal Solar Tax Credit

This nationwide incentive, also known as the investment tax credit (ITC), allows you to deduct 30% of your solar installation costs from your federal income taxes. The credit applies to all equipment, labor, permitting, and sales taxes associated with your new solar panels. For a 6 kW system in South Carolina, the ITC reduces your tax liability by roughly $4,480. The 30% rate lasts through 2032 before stepping down incrementally. One caveat: you must own your solar panels (via cash purchase or solar loan) to be eligible.

South Carolina Solar Tax Credit

On top of the federal credit, South Carolina offers its own state tax credit for 25% of your residential solar costs, up to a maximum of $35,000. For an average 6 kW system, that‘s an additional $3,700 in savings. If your state tax liability is less than $3,500 per year, you can carry the remainder of the credit forward for up to 10 years.

Utility & Electric Cooperative Solar Rebates

Several of South Carolina‘s largest utility companies sweeten the deal further with upfront solar rebates. Santee Cooper customers can get $950 per kW installed, up to a maximum of $5,700 for a 6 kW system. Some of the state‘s electric cooperatives like Palmetto Electric and Horry Electric offer similar rebates ranging from $300-500 per kW. Check with your utility provider to see what‘s available.

Net Metering

Like most states, South Carolina requires major electric utilities to offer full retail rate net metering to solar customers. When your panels generate more electricity than you need, the excess is sent back to the grid and your meter literally spins backward, giving you a bill credit for the surplus power. Those credits offset your electricity usage when your panels aren‘t producing, like at night or on cloudy days.

At the end of each month, any remaining credits roll over to the next billing cycle. If you have credits left at the end of the year, your utility will compensate you at the much lower "avoided cost" rate (wholesale price of about $0.03-0.04 per kilowatt-hour). While not as lucrative as getting the full retail value, it‘s still extra money back in your pocket.

A 2019 settlement between solar advocates and Duke Energy, South Carolina‘s largest utility, solidified net metering in the state through at least 2025. The deal removed prior caps on rooftop solar capacity and ensured full retail compensation for customer-generated power. According to E&E News, the agreement is expected to boost solar installations by a whopping 200 MW per year.

When you add up all the available incentives, 6 kW solar panel systems in South Carolina end up costing just $0.18 per watt on average after rebates and tax credits. That‘s an 85% discount off the sticker price and one of the lowest solar costs in the nation.

"South Carolinians have some of the best solar economics in the country right now," says Zack Subin, an energy systems analyst and South Carolina solar expert. "Between the falling costs, the great state incentives, and the high electricity rates, homeowners can see a very quick payback."

To Buy or Lease Your Solar Panels?

If you can‘t afford the upfront cost of solar panels (even with incentives), you have the option to lease them in South Carolina. With solar leasing, the installation company owns and maintains the panels, and you simply pay them a fixed monthly rate for the power they produce on your roof. Leases typically last 20-25 years and include an annual price escalator of 1-3%.

Solar leasing can be an attractive option if you lack the cash or credit to purchase panels outright. According to a Solar-Estimate study, the average solar lease in South Carolina saves customers $116 per year compared to what they previously paid for electricity. Lease customers are also insulated from risks around panel damage or underperformance.

However, buying your system is still the better financial move if you can make it work. Purchasers save substantially more over the life of their panels and can take advantage of lucrative tax credits and rebates that aren‘t available to lease customers. If you can‘t pay in full upfront, solar loans have become very affordable, with many installers offering no-money-down options.

Here‘s how the 25-year economics of solar leasing vs. buying in South Carolina stack up:

6 kW Solar Lease 6 kW Solar Purchase
No upfront cost $14,940 cost before incentives
Fixed monthly payments ~$50-100 No monthly payments after payback period
~$2,900 in estimated lifetime savings ~$29,784 in estimated net lifetime savings
Not eligible for tax credits or rebates 55%+ off costs from credits and rebates
Lease terms of 20-25 years Panels continue producing for 25-30+ years
Solar company owns the system You own the system and all benefits

Unless you absolutely can‘t purchase, experts advise against solar leasing. "We strongly encourage buying wherever possible," says Garrett Nilsen, acting director of the U.S. Department of Energy‘s solar energy technologies office. "If you have a choice, unlock the bigger financial savings that come with ownership."

The Future of Solar in South Carolina

While the short-term outlook for solar is undeniably bright in South Carolina, some worry whether the momentum will last without stronger clean energy policies to support it. The state‘s largest utilities are making bold solar investments – Dominion Energy South Carolina plans to add 1,000 MW by 2024, Duke plans to add 3,000 MW by 2028. But their motives likely have more to do with favorable economics than any state mandate.

"There‘s no renewable portfolio standard or net-zero emissions law requiring this buildout," explains Josh Rhodes, an energy research associate at the University of Texas at Austin. "It seems to be based on the fact that solar is just really cheap right now in that region."

Therein lies the risk: a future where large-scale solar investments ebb and flow based on market conditions rather than being codified into state policy. Other states are going much further to mandate renewable energy long-term. Neighboring North Carolina, for example, requires 12.5% of electricity to come from solar, wind, and hydropower by 2021, rising to 40% by 2025.

Clean energy advocates are pushing South Carolina legislators to follow suit, arguing that mandatory renewable targets would provide market certainty and protect solar investments for the long haul. A bill introduced in January 2023 would require 100% carbon-free electricity by 2050. But so far, little progress has been made.

"In the absence of policy support, South Carolina will need to rely on corporations setting clean energy goals and utilities making proactive investments," says Subin. Tech giants Google and Facebook, both with large data centers in the state, have been vocal advocates for favorable solar policies.

Subin also points to the role of digital technologies in enabling higher levels of solar on the grid. Smart meters, which communicate electricity generation and usage data in real-time, help utilities integrate distributed energy resources like rooftop solar panels. Software platforms use AI and machine learning to balance supply and demand.

"With the right investments in digitalization, you can add resiliency and flexibility to the grid," Subin says. "That makes it easier to absorb these intermittent renewables at a large scale. We‘re seeing those investments start to happen in South Carolina."

For homeowners considering solar, the long-term uncertainty shouldn‘t be a major deterrent. Between the low costs and lucrative incentives, panels are still a safe bet with substantial savings baked in. Just be sure to purchase rather than lease if you can.

"I would absolutely encourage folks to go solar in South Carolina," Rhodes says. "The finances look great for the foreseeable future. But do your research, get multiple quotes, and make sure you understand what you‘re signing up for."

Tips for Going Solar in South Carolina

As you start your solar journey, keep these best practices in mind to maximize your savings and protect your investment:

  1. Compare quotes from multiple installers. Get at least 3-4 bids and thoroughly review their equipment, financing options, and warranties. Be wary of high-pressure sales tactics.

  2. Check installer references and reputations. Look for credentialed installers with a track record of quality work. Good resources include the EnergySage and SolarReviews company directories, Better Business Bureau profile, and your state‘s contractor licensing board.

  3. Vet all assumptions and calculations. If an installer‘s proposal seems too good to be true, it probably is. Make sure you understand the math behind their savings estimates and it aligns with your actual energy usage and roof characteristics. EnergySage offers a great solar calculator to gut-check the numbers.

  4. Maximize your roof‘s solar potential. Southern-facing roofs with minimal shading will produce the most energy. Consider trimming trees that block the sun and upgrading your roof before installing panels if it‘s nearing the end of its lifespan.

  5. Understand your utility‘s net metering policy. While South Carolina requires utilities to offer net metering, they may have different methods for calculating credits. Ask your installer to walk you through the specifics.

  6. Invest in energy efficiency. The less electricity you use, the fewer solar panels you‘ll need to offset your consumption. Consider an energy audit to identify ways to reduce waste before sizing your system.

  7. Keep an eye on solar policy developments. While existing incentives are locked in once you go solar, favorable new laws could open up additional savings opportunities down the line. Bookmark the DSIRE database of state energy incentives to stay informed.

With ample sunshine, falling installation costs, and some of the most generous incentives in the US, South Carolinians are uniquely poised to profit from the solar revolution. Those weighing the investment today can feel confident in the impressive returns, both for their pocketbooks and the planet. While the state has room for growth in its renewable energy policies, the momentum behind solar is only projected to build in the years ahead.