South Carolina is a growing Southeast solar market, and typical payback in 2026 lands in the 10–11 year range. What makes SC stand out isn't sun (most of the Southeast has plenty); it's the state tax credit — one of the strongest in the US — which partially offsets the loss of the federal credit.
The catch: how well solar pays in SC depends on which utility serves you. Dominion Energy SC customers get nominal 1:1 net metering with an important fine-print caveat. Duke Energy customers get materially worse terms. Get the right utility before you trust any quote.
What changed
The federal Residential Clean Energy Credit (§25D) — the 30% homeowner credit — was repealed for systems installed after December 31, 2025. For 2026 SC buyers, the federal credit on solar is $0. The same applies to home batteries purchased outright. The §48E commercial credit (30%) still exists, but only for leased or third-party-owned systems — the lessor claims it, not you. Full federal context here.
VERIFIED 2026-06 · irs.govSC's state credit: the strongest part of the deal
This is the headline for South Carolina. Under S.C. Code §12-6-3587 (TC-38), residential solar gets:
- 25% of system cost as a state income tax credit.
- $3,500 per-year cap — you can take up to $3,500 per tax year.
- 10-year carryforward for any unused portion.
- $35,000 lifetime maximum per taxpayer.
- Also capped at 50% of your annual SC tax liability — high earners can use it quickly; lower earners may need most of the 10 years.
In practice: a ~$15,000 system generates a $3,750 credit (25%). You take $3,500 this year and roll $250 to next year. A larger system spreads over more tax years.
This is what makes SC noticeably better for solar than its no-state-income-tax neighbors (Texas, Florida, Nevada) — those states have no state credit at all because they have no state income tax. SC's credit is meaningful and partially offsets the dead federal credit.
VERIFIED 2026-06 · S.C. Code §12-6-3587 (TC-38)Net metering: depends on your utility
This is where SC quotes get confusing. The state allows 1:1 retail-rate net metering, but the actual deal depends on who delivers your power.
Dominion Energy SC (the main residential utility we model). Nominal 1:1 retail-rate net metering, but with a real-world catch:
- You're required to be on a time-of-use (TOU) plan.
- Credits do not roll over between TOU periods or month-to-month — over-production in any period is effectively lost.
- The annual true-up in November pays out any leftover credits at avoided-cost, around ~3¢/kWh — far below retail.
The bottom line: Dominion's "1:1" understates how much value most homeowners actually capture. If your system over-produces in a TOU window, that energy doesn't bank for later — it's gone. Real-world value is often lower than a clean 1:1 model would suggest.
Duke Energy (parts of the Upstate). Duke ended retail-rate net metering in 2021. Duke now credits exports at roughly 2.6–4¢/kWh — materially worse than Dominion. If your home is on Duke, the math changes substantially. Our calculator models the Dominion case, not Duke.
SC retail is currently ~14–15¢/kWh and trending up — both Dominion and Duke raised rates in 2026.
VERIFIED 2026-06 · eia.govWhat we don't model: sales tax
There's persistent confusion online about whether South Carolina exempts residential solar from its 6% sales tax. Sources conflict. Some say residential solar is exempt; others say only certain equipment categories or only commercial installs qualify; some say the exemption doesn't apply to residential at all. The status is unclear enough that we don't assume an exemption in our numbers.
If you're budgeting carefully, call the South Carolina Department of Revenue before relying on a sales-tax exemption claimed in a quote.
For comparison, property tax is on solid ground: South Carolina exempts the added home value from solar at 100% for residential systems (effective 2025).
Battery in South Carolina
A home battery makes sense when the retail-export gap is large — you store solar that would have exported cheaply and use it instead of buying retail later. In SC the situation is unusual:
- Self-consumed kWh: ~14.5¢ (retail).
- Mid-period Dominion export: 1:1, also ~14.5¢ — gap zero within the period.
- Credits lost to non-rollover (TOU/monthly): worth zero.
- November true-up payout: ~3¢ — large gap vs. retail.
So a battery in SC can help you capture credits you'd otherwise lose to the non-rollover rule, rather than the simple "avoid expensive grid imports" story other states tell. The economics aren't as obvious as California (NEM 3.0) but they're not as flat as a pure 1:1 net-metering state either.
What you don't have working in your favor: there is no federal credit on the battery purchase in 2026 (§25D repealed), and South Carolina has no general state battery rebate. Duke's PowerPair program is Duke-specific (and not modeled here). Run your own numbers; don't assume battery pays off automatically.
The honest picture
South Carolina solar in 2026:
- Federal credit: $0 — not 30%.
- SC state credit: 25%, up to $3,500/year, 10-year carryforward, $35,000 lifetime. Partially fills the federal gap.
- Net metering: utility-dependent. Dominion nominal 1:1 with TOU non-rollover catch and ~3¢ November true-up. Duke materially worse (~2.6–4¢, ended 1:1 in 2021).
- Retail rate: ~14–15¢/kWh, rising.
- Property tax: 100% exempt (residential).
- Sales tax: status unclear — sources conflict, don't assume an exemption.
- Battery: can help with non-rollover credits on Dominion, but no federal credit and no general state rebate.
- Typical payback: ~10–11 years.
The case for SC solar is real, but it's specific. It rests on the state credit doing real work against the dead federal credit, plus self-consumption value rising as utility rates climb. The 1:1 net metering headline is partly true and partly misleading on Dominion, and largely irrelevant on Duke. Get your utility right, get the state credit modeled correctly, and don't bake in a sales-tax exemption you can't verify.
Run your real South Carolina payback →Estimates only — net metering and credits depend on your utility (Dominion vs. Duke). Verify with your utility and a licensed installer. This is not financial advice.