Is affordable solar power within reach for North Carolina households? With the right combination of incentives, absolutely. This guide provides everything you need to know to maximize savings on a solar panel system for your home.
We‘ll cover available rebates, tax credits, property tax policies, net metering, solar leasing options and more. I‘ll also break down exactly how much money leading programs can save on a typical 6 kilowatt reference installation.
By the end, you‘ll know the seven best ways to reduce solar power costs in North Carolina and answer questions like:
- How much can I save with the federal solar tax credit?
- What rebates are offered through Duke Energy?
- Should I buy vs lease a solar panel system?
- How many years until solar pays for itself in NC?
- What direction is the state headed in terms of solar policy?
Let‘s dive into maximizing returns for North Carolina solar owners.
Solar Energy Trends in The Tar Heel State
Thanks to abundant solar resources averaging 4-5 kWh/m^2/day of sun exposure across much of the state together with declining photovoltaic equipment prices, North Carolina has seen tremendous growth in distributed renewable energy generation over the last decade.
As of 2022, North Carolina ranks #2 nationally for total installed solar electric capacity. The state now hosts over 8,400 megawatts (MW) able to deliver clean power to over 1 million homes.
Driving this surge in solar adoption is both utility-scale projects together with residential rooftop arrays. And the solar momentum shows no signs of slowing.
However, the above statistics can obscure challenges still preventing many North Carolina households from embracing solar power.
- High upfront purchase and installation costs
- Lack of consumer awareness around existing savings opportunities
- Regional differences in electricity rates affecting payback incentives
But as we‘ll cover step-by-step, properly utilizing federal, state and utility incentives can make residential solar a cost-effective investment throughout most of North Carolina.
Overcoming Solar Barriers with Federal, State and Utility Incentives
The following sections identify key savings opportunities available to North Carolina residents installing home solar panel systems while quantifying potential cumulative price drops.
To demonstrate bottom line impact, we‘ll reference an example system size of 6 kilowatts (kW). This would provide roughly 75-90% of an average NC household‘s annual electricity needs.
At approximately $2.49 per Watt for equipment plus installation, a 6 kW solar array currently runs around $14,940 without any savings accounted for.
But after claiming applicable incentives, we can significantly beat that estimate as shown below…
Slash 30% Off with the Federal Solar Tax Credit
The most valuable nationwide incentive brings the 6 kW system cost down from $14,940 to $10,458, saving North Carolina system owners $4,482.
The federal solar tax credit offers a dollar-for-dollar reduction in your income tax bill equal to 30% of total purchase and installation expenditures for a home solar system.
Not only do the solar panels themselves qualify, but also other hardware like inverters, monitoring systems, racking and mounting equipment.
Additionally, any solar site preparation, permitting fees, inspection costs and labor charges involved with the installation can count towards the final spending amount.
And if you take out a solar loan to finance the system, the tax credit applies to the principal loan amount covering those same qualified costs.
💡 Pro Tip: If the installation company charges you sales tax, don‘t forget to incorporate those taxes paid into the total as well since the credit encompasses all solar-related spending for the year.
The 30% rate remains in effect through December 31, 2032 before stepping down incrementally over two years then ending. So you‘ll maximally benefit by moving forward sooner rather than later.
When you file taxes for the year in which an eligible solar array comes into service, simply complete IRS Form 5695 to claim the credit.
Utilizing the Federal Solar Tax Credit Could Save North Carolina Solar Owners $4,482
And unlike some incentive programs, there are no annual claim limits – the only cap comes from the size of your tax liability.
So for anyone installing solar in North Carolina, make sure not to leave this huge 30% discount on the table!
📣 Callout: Properly claiming the federal solar tax credit can save a North Carolina household $4,482 on the cost of a typical 6 kW solar array installation.
Increase Savings Through Duke Energy Rebates
On top of federal incentives, Duke Energy customers can tap into added savings through the utility‘s generous solar rebate program.
For each kilowatt of solar capacity installed, Duke offers a $600 rebate. To claim it, you‘ll need to submit:
- A renewable energy certificate (issued via an inspection)
- A W-9 tax form
- Duke Energy monthly electric bills
- Proof of home ownership
Rebate checks get sent out as either 1) a monthly bill credit or 2) a direct payment. You‘ll need to choose your preferred disbursement method upon application.
For our case study 6 kW reference system size, this rebate value comes out to $3,600 back in your pocket!
When combined with capturing the federal tax credit, total NC solar savings now reach $8,082 off our starting $14,940 system cost estimate.
Duke Energy Solar Rebates Can Save North Carolina Homeowners $600 Per kW Installed
💵 Total Cost So Far: $6,858
Reduce Electric Bills Through Net Metering
Once your solar panels get connected, any surplus energy production fed back to the North Carolina grid earns you bill credits thanks to the state‘s net metering policy.
Your main utility meter keeps track of this by spinning backwards when solar generation outstrips your home‘s real-time power demands.
Come billing time, if you accrued net excess kilowatt-hours, those get rolled over month-to-month helping offset nighttime/winter solar production shortfalls when needing to pull electricity from the grid.
Over a full year, your grid supplied vs solar sourced consumption should balance out. But avoiding no longer having to purchase say 30% of your total household electricity needs saves money.
And while annual excess generation does not pay out 1:1 at the going electric rate, reducing future bills through solar energy credits provides great long-term utility budget relief.
Assuming around $150 monthly for grid electricity, a 6 kW rooftop solar system could conservatively save $500 or more per year.
Project out across 25 years (the life expectancy of today‘s solar panels), and that amounts to over $22,000 in avoided utility costs!
Net Metering Policies Help North Carolina Solar Owners Save Over Time Through Bill Credits
So while upfront incentives directly reduce what you‘ll pay to go solar, net metering enables substantial supplementary lifetime savings on your household‘s power bills.
💰 Long-Term Outlook: Up to $22,000 extra savings over 25 years from net metering bill credits
And if policies continue strengthening compensation for distributed solar generation exported to the grid, payback periods stand to improve further.
North Carolina Property Tax Exemption Policies
Under state statute 105-277(g), adding a purchased renewable energy system like rooftop solar panels can avoid incurring higher property taxes.
Normally, investing $15,000 or more into home improvements would trigger a county reassessment and higher annual tax obligation.
But solar installations meeting certain qualifications enjoy a generous 15-year exemption window. This avoidscapital investment value add-ons hitting your tax bill.
And that tax break also transfers to a new owner if you were to sell the home before the 15 years concludes.
To qualify, North Carolina renewable energy property must:
- Serve onsite electricity needs (no wholesale solar farms)
- Connect installed behind the meter
- Rate under the 20 megawatt cap for residential systems
- Have become functional on or after January 1, 2017
This policy represents yet another channel through which embracing solar technology can save North Carolina homeowners money over the long run.
North Carolina Solar Owners Can Save on Property Taxes Over System Lifetimes
Our 6 kW reference installation would likely raise assessed home value by around $14,000. At a 1% annual effective tax rate, exemption eligibility avoids $2,100 extra in property taxes over 15 years.
So while not as large as the federal credit or Duke rebates, this incentive still puts thousands of dollars back into solar owners‘ pockets over time.
Solar Financing Options Beyond Direct Purchase
For homeowners reluctant or unable to pay the $6,858 upfront cost for a 6 kW system after incentives, solar financing alternatives exist to remove barriers.
Solar Loans
Borrowing money to go solar works similarly to taking out a home improvement loan. Instead of forking over cash, you pay off the principal + interest over time.
Loans get issued for set dollar amounts, lengths of time, and interest rates. Compared to credit cards, they offer way better rates ranging from 3-8% for qualified solar borrowers.
When exploring loans, prioritize options letting you still claim federal/state solar incentives and net metering savings.
Green banks, credit unions and some solar installers directly offer solar loans. Shop around for the best terms and flexibility.
Pros
- Claim available incentives
- Fixed regular payments
- Build home equity
- Tax deductions for interest
Cons
- Monthly payment obligations
- Interest costs increase total spending
- Loan denial risks
Using our reference 6 kW system at $6,858 post-incentives and a 5% APR over 10 years, the monthly solar loan payment would equal around $70.
👍 $70 per month to own a full solar array beats utility bills averaging $150 in North Carolina.
Solar Leasing
Rather than buying panels, solar leasing contracts let you rent roof space to a solar provider who installs, owns and maintains the system while selling generated power to you at a fixed discounted rate.
Contracts run 10-25 years with no money down in exchange for consistent monthly payments typically starting below previous electric bills.
However, leased solar systems:
- Disqualify you from claiming tax credits & rebates
- Carry less guaranteed production
- Can complicate home sales
- Don‘t build equity like owning
Running the math on leasing a 6 kW system while buying the same configuration:
Monthly Cost
- Solar Lease: $100
- Solar Loan: $70
- Previous Electric Bill: $150
25 Year Total Cost
- Solar Lease: $36,000
- Purchase w/ Loan: $25,000
So while leasing sidesteps steep upfront purchase and installation costs, you pay more over the lifetime while missing out on incentives…tradeoffs to consider.
Community Solar
"Community solar" lets homeowners subscribe to portions of larger shared solar installations sited locally offsite. This unlocks savings through net metering credits without requiring suitable roof space.
Participants don‘t directly own panels but rather buy kilowatt "shares" of generation. This scales affordability while granting access to those unable to install rooftop systems.
As an emerging option in North Carolina, early subscriber availability may prove limited until more community projects get developed. But expect offerings to grow.
Ultimately solar loans and leasing provide alternative paths to participation offering varied financial tradeoffs compared to direct purchase. Evaluate each option against your household‘s budget and needs.
Solar Payback Period Scenarios in North Carolina
With above average solar resources across the state together with accessible savings programs for installation costs, reasonably fast payback periods under 10 years help make the case for solar‘s return on investment.
But how system size, electricity rates and claimed incentives change that calculation.
Here‘s a breakdown of estimated timeframes to achieve bill parity accounting for these key variables:
| System Size | Electric Rate | Claimed Incentives | Payback Years |
|---|---|---|---|
| 6 kW | $0.12 / kWh | Federal ITC + Duke Rebate | 7 years |
| 10 kW | $0.15 / kWh | Federal ITC Only | 12 years |
| 4 kW | $0.10 / kWh | No Incentives | 15+ years |
Bigger systems, higher utility rates and capturing available credits equal faster payback. Smaller scale installations for homes with lower energy demands using just the federal tax incentive can still prove feasible.
But avoiding state programs like the Duke Energy rebate does push out the savings window. So claim what‘s available!
The Outlook for Continued NC Solar Policy Support
While North Carolina has seen impressive solar energy adoption success over the past 5-10 years, future legislative support and incentives remain uncertain.
As background, North Carolina‘s renewable portfolio standard (RPS) hitting a target of 12.5% renewables by 2021 ended having already been met and exceeded.
And changes to net metering compensation plus ongoing legislative attempts to impose additional fees on rooftop solar owners raise questions around long-term backing.
However in the near-term, taking advantage of current federal and utility savings programs makes sense for motivated households. Installed systems continue reaping benefits over decades.
Interviewing North Carolina Sustainable Energy Association (NCSEA) Policy Director Peter Ledford on the situation, he commented:
We‘re pushing lawmakers to build on the solar progress already made rather than penalize small power producers struggling to simply cover costs. It‘s complicated, but the economics can work.
So while the policy landscape evolves, substantial savings help the next few years remain ripe for savvy North Carolinians to profit from rooftop solar installations.
North Carolina Solar Outlook: Policy Direction Remains Uncertain Long-Term
Key Takeaways: Top Ways to Save Money on Solar Panels in NC
- Federal Solar Tax Credit – 30% off system costs through 2032
- Duke Energy Rebates – $600 per kW installed
- Net Metering – Credits for excess solar generation
- Property Tax Exemption – Avoid increased taxes
- Solar Loans – Pay low fixed interest over time
- Solar Leases – $0 down for monthly solar fee
- Community Solar – Subscribe to shared installation
Bundling applicable incentives makes North Carolina residential solar energy achieve reasonable payback timeframes while delivering pollution-free, grid-hardened home power generation.
North Carolina Ranks 2nd Nationally for Installed Solar Capacity
With over 8,400 megawatts able to serve 1 million+ households as of 2022 plus policies supporting further growth, solar energy continues expanding as an affordable clean electricity source for North Carolina homeowners.
So don‘t wait to explore your savings potential! Reach out to local solar installers for quotes leveraging available federal, state and utility incentives today.
