North Carolina's Rebates and Incentives for Solar Energy Systems

North Carolina is a state with a beautiful landscape and some gorgeous coastline. It is a common vacation spot for folks from northern climes. And why? Because of all that sunshine. In fact, most of the southeast United States has a healthy share of sunshine. With some help from Florida, North Carolina is helping to lead the southeast into the solar movement. Just in the last few years the Tar Heel State has gained some recognition for solar and other renewable resources.

TAX CREDITS

Active Solar Heating and Cooling Property Tax Exemption

• Applying only to active water heat, space heat and space cooling systems, this law exempts such systems from property taxes but not at a value higher than a conventional system. This does not include any part of a structure (walls, support, etc.) and pertains only to equipment such as pumps, fans, tanks, heat exchangers, and other components.

Property Tax Abatement for Solar Electric Systems

• For photovoltaic (PV) system owners, this law exempts 80% of the added property value of the home from the installation of a solar PV system. This law is new to 2008 and, while it does not cover all the system, will help quite a bit.

Renewable Energy Tax Credit

• This personal tax credit covers just about every solar technology except, apparently, solar space cooling. The amount of the credit is 35% of the total cost and maximums will vary based on technology:
  • Active/passive space heating (including combined space/water heating systems): Maximum $3,500.
  • Water and pool heating systems: Max. $1400 per dwelling.
  • Photovoltaics: $10,500
  • There is also a massive $2.5 million cap on commercial or industrial systems.
• This includes the cost of equipment, design, and installation. Any rebates, discounts, and other savings will lessen the amount of the credit.
• Donations made by residents of North Carolina to a company or organization looking to go solar are tax deductible.

PRODUCTION INCENTIVES

NC GreenPower Production Incentive

• This is not a state-funded program but is worthy of mention because it is the closest thing to a rebate program you'll find in North Carolina. It is in actuality funded by taxpayer donation and there is no guarantee that customers will receive a benefit. However, should funds remain available, this can be a very lucrative incentive.
• Incentive rates will vary depending on system size and type of renewable. For small solar electric systems (10kW or less), the incentive is $0.15/kWh with an additional $0.04/kWh coming from a mandatory power purchase agreement with your utility.
• This $0.19/kWh rate gets real huge because there does not seem to be any limit on the time you can claim the incentive. That means that, again providing that funds last, you could receive the incentive for the life of your system. According to SolarPowerRocks, that results in a rebate of more than $35,000 over 25 years!
• It is important to note that your system cannot be net metered and participate in the GreenPower program. Also, several utilities will charge an interconnection fee (usually around $4 per month). See the program's website for more information.

NET METERING

• North Carolina's net metering is not the strongest system in the nation, but it is something. It keeps systems relatively small (max 20kW residential, 100kW commercial) and limits capacity to just %0.2 of the utility's peak load for the preceding year.
• It applies only to solar PV systems and net excess generation is carried over to the next month's bill at the applicable time-of-use rate and whatever is left over at the end of the year is granted to the utility.
• Furthermore, it applies only to the state's investor-owned utilities.

It's easy to criticize North Carolina's rather jumbled package of solar incentives. It seems strange and rather hard to follow. However, I remind myself that NC is really paving the way in their region and that their programs are still young. Plus, thanks to NC GreenPower and the Tenessee Valley Authority (TVA, which has a program similar to GreenPower), the state has one of the best production incentives in the nation! Unfortunately there is no real solid ground for it to stand on, should taxpayers decide to stop checking that box. Nevertheless, North Carolina has set its renewable energy standards and, one way or another, you can expect solar to continue picking up in Tar Heel country and beyond.

USEFUL LINKS

North Carolina Solar Center

DSIRE: North Carolina

Solar Power Rocks: North Carolina

NC GreenPower

Tenessee Valley Authority