North Carolina Solar Cost: Tax Credits & Rebates Guide 2023
Key takeaways
- According to Find Energy data, the average cost of solar in North Carolina is $3.51 per watt with an average system size of 9 kilowatts (kW).
- North Carolina is one of the top five solar markets in the nation.
- The 30 percent Residential Clean Energy Credit lowers the average cost of solar panels in North Carolina to $22,113, which is nearly $10,000 in savings.
Solar power in North Carolina
As one of the top five solar markets in the nation, North Carolina offers a favorable environment for homeowners and businesses searching for renewable energy options. Increasing electricity rates makes the transition to solar energy more attractive for saving money on energy. Learn more about the cost of solar panels in North Carolina, solar incentives and financing options.
Can solar panels save you money?
Cost of solar in North Carolina
Solar panel systems are tailored to your home’s individual characteristics and your energy usage. As a result, the cost of solar panel installation will vary based on these factors. For example, if you want to cover your entire energy need with solar, your system will require more panels than a homeowner only covering a portion of their energy. The price per watt will decrease if you install more panels, however, the total cost will be higher. To maximize solar savings, we recommend covering the majority of your energy usage if it fits within your budget.
According to Find Energy data, the average cost of solar in North Carolina is $3.51 per watt with an average system size of 9 kilowatts (kW). Before applying any solar incentives, a 9 kW solar panel system in North Carolina will cost about $31,600. The following table displays the total price for solar for a range of system sizes.
| System size | Total cost |
|---|---|
| 7 kW | $24,570 |
| 9 kW | $31,590 |
| 11 kW | $38,610 |
How much can you save by installing solar panels?
Your chosen financing method impacts your total solar savings. Buying your solar system outright through a cash purchase results in the most significant savings. Paying upfront is not ideal for every budget, so you may consider solar loans. Remember that loans often come with additional costs like interest and fees, which hinder your overall savings.
Thanks to solar incentives, you can save money by installing solar panels whether you choose to finance with a loan or pay upfront. For example, the 30 percent Residential Clean Energy Credit lowers the average cost of solar panels in North Carolina to $22,113, which is nearly $10,000 in savings.
Buying solar panels is a costly purchase. Calculating the payback period of your solar system helps you understand when your investment will start to pay off in terms of bill savings. Based on the average monthly electricity bill in North Carolina ($139.79), it will take about 13.2 years to recoup the cost of a 9 kW solar system. Use the following equation to calculate your payback period.
(Total cost – 30 percent tax credit) / (Average monthly bill x 12 months) = payback period
Solar panel cost breakdown
In the past 10 years, the cost of solar in North Carolina has dropped by a significant 43 percent. When it comes to pricing, the cost for your home will vary based on the solar company you choose, your location, energy usage and specific equipment. The two main price components included in solar quotes are hardware and soft costs.
Hardware refers to the physical components, including panels, solar batteries, inverters and racking gear. Soft costs are associated with permitting, inspections, installation labor and the solar company overhead. To ensure the best value for your money, we recommend obtaining quotes from multiple companies to compare the price, hardware options and warranty terms.
North Carolina solar incentives and rebates
Federal and local incentives are available to make the transition to solar energy more economically feasible. The following table details solar incentives in North Carolina.
| Program | Description |
|---|---|
| Net Metering | You can sell excess solar energy to your utility company to offset your energy bill. |
| Residential Clean Energy Credit | A 30 percent federal tax credit is applied to the total cost of your solar installation. The credit decreases to 26 percent in 2033, 22 percent in 2034 and expires in 2035. |
| Property Tax Abatement | The state exempts at least 80 percent of the value of your system from your property taxes. |
| Duke Energy Renewable Advantage | Duke Energy customers can support renewable energy efforts in the state by subscribing to 250 kWh blocks for an additional $4 to your monthly bill. Duke Energy donated 50 cents per block to support solar developments at schools in North Carolina. |
Solar incentives in Fayetteville
The city of Fayetteville is one of the few cities in North Carolina with a community solar program. Community solar is a subscription-style service where members receive renewable energy credits on their energy bill for supporting solar developments.
- All Fayetteville Public Works Commission (PWC) retail electric customers, including homeowners, business owners and renters, are eligible.
- You can subscribe to up to five panels and cancel your subscription anytime.
- If you move to a new address within the PWC electric region, you can continue or transfer your service. If you move outside the PWC’s service area, the panels become available to another PWC customer.
Solar incentives in Raleigh
Receiving permits and approvals usually takes at least 30 days, but the city of Raleigh offers a streamlined permitting process to accelerate approvals. Using the online permit portal, you can receive same-day permits for installation. To apply, you must submit the following documents.
- A residential permit application for development activity in your home.
- Your solar project plans include each hardware component.
- The technical specification sheets and manufacturer installation instructions for each component.
- A signed and sealed inspection document.
- The owner exemption affidavit, if required.
- Unless exempt, you must provide a Notice of Lien Agent.
Solar financing options in North Carolina
If the upfront cost of solar has kept you from investing in renewable energy, there are several financing options to fit any budget. Review the following to find a solution that meets your needs.
- Personal loans: A flexible and trustworthy choice with options for fixed and variable-rate payment plans. All loan options are eligible for financial incentives.
- FHA, Fannie Mae and Freddie Mac Loans: If you plan to purchase or renovate your home while installing solar panels, FHA, Fannie Mae and Freddie Mac Loans are worth considering. These mortgage loans offer a convenient way to finance your home and solar array together. Each type has its own unique features: FHA 203(k) loans cover remodels, repairs and purchases, while Fannie Mae HomeStyle loans combine refinancing and mortgages. The Freddie Mac CHOICERenovation mortgage loan caters to home renovations.
- Home equity loan and home equity line of credit (HELOC): Tap into your home’s value with a home equity loan or HELOC. Your rate is variable and will fluctuate monthly, but the interest paid is tax-deductible, potentially reducing your overall tax burden.
- Solar lease or power purchase agreement (PPA): If you’re not interested in owning solar panels, a solar lease or PPA may be the right fit for you. Under these agreements, a solar company owns the panels and you pay a monthly fee. These options provide low or no cost to start, but you’re bound to a long-term contract and ineligible for incentives.
- Community solar: If you’re a renter or do not want to install solar panels on your property, community solar is a sustainable alternative. You can support the development of solar farms in your area by subscribing to a community solar service. In exchange, you receive renewable energy credits to lower your monthly energy bill.
Thanks to solar incentives and various financing options, the cost of solar panels in North Carolina is more affordable and accessible. Investing in solar power helps reduce reliance on fossil fuels while providing you with long-term financial benefits. As more homeowners adopt solar energy, the state moves closer to achieving a more sustainable future.
