Solar Panel Pricing and Incentives in South Carolina

Solar power generation in South Carolina has grown by almost 140% since the beginning of 2020, due in part to a growing number of residential solar panel installations

South Carolina residents use more electricity per month than other states, driving up monthly energy bills. According to CNET's sister publication SaveOnEnergy, South Carolinians paid 12% more in energy bills in September 2022 than the national average. 

According to the Energy Information Administration, South Carolina residents paid an average of $139 a month in 2021. By powering your home with a solar panel system that covers your entire energy usage, you could save around $1,674 each year. You can estimate your potential savings with solar panels by checking your electricity bill to discover how much energy you use each month. This is the starting point for determining your solar system's size. Electricity rates in South Carolina have increased 13% since September 2021, and with energy prices predicted to soar, the potential savings with solar could also rise.

While traditional energy prices have increased in recent years, the cost of residential solar panels has decreased by more than 64% since 2000, according to a Lawrence Berkeley National Laboratory report. Federal, state and local tax credits and incentives can lower the cost of solar panels even more.

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South Carolina solar panel costs

The cost of a residential solar panel system depends on installation costs, how many panels you need and whether you include components like solar batteries. According to Find Energy and consulting firm Wood Mackenzie, the average cost per watt is $4.03 which is higher than the national average. 

As solar panels become more popular in South Carolina, the number of solar panel installers in the state has increased. The SEIA estimates there are just over 80 solar companies in South Carolina, giving residents a variety of options to choose from. Here's a breakdown of the average cost of solar panels in South Carolina compared to the nationwide average using data from Find Energy and the Lawrence Berkeley National Laboratory report.

How to pay for solar panels in South Carolina

As with any major purchase, you will want to think about how to finance the cost of solar panels. Keep in mind, the money from the tax credit won't be yours until after you've filed your taxes for the year the panels are installed. It's also important to factor in the solar payback period, which is the time it takes to recoup your upfront investment and when savings begins. 

Here are some ways to pay for solar panels:

Cash: This approach only works if you happen to have thousands of dollars sitting around in a bank account. If you don't have that yet, but you want solar panels in the future, consider saving money in a high-yield savings account. Interest rates are high right now, and this can help you save faster.

Solar loan: Your solar installer likely has a relationship with a bank or other financial institution to offer a loan designed for solar panels. This can be a great deal, but you'll want to get multiple offers to ensure the rates and terms are the best.

Lease or power purchase agreement: Some solar companies allow you to lease your system or enter a power purchase agreement. If you choose to lease, you won't own the solar system, you'll just pay for use of the equipment. Entering a power purchase agreement means you'll buy solar energy generated from the solar company to power your home. The price you'll pay is usually lower than the retail rate from your local utility company. Note that not all incentives are available with a lease or power purchase agreement.

Personal loan: You can also borrow the money through a personal loan. The main difference between a personal loan and a home equity loan is that a personal loan is typically unsecured. That means your house isn't at risk. The downside is they tend to have shorter terms and higher interest rates than home equity products.

Home equity: You don't have to use a loan from your solar company. Financial institutions offer home equity loans and lines of credit (or HELOCs) that are commonly used for home improvement projects. These loans can be used for basically any purpose, and they may be a good fit for your solar project. Shop around and make sure you're getting the best deal.

South Carolina solar panel incentives or rebates

While the average cost of a solar panel system in South Carolina is higher than the national average, there are solar tax incentives, rebates and credits to make solar more affordable.

The Residential Clean Energy Credit is a federal solar tax incentive offered in all 50 states that credits 30% of the total cost of a solar system to consumers who purchase solar panels. Previously known as the Investment Tax Credit, this incentive was increased and extended when the Inflation Reduction Act was passed in August 2022. There is no cap on how much you can claim with this tax credit, so you can receive the full 30% no matter how much your solar panel system costs.

If you purchase solar panels, you can apply for the Residential Clean Energy Credit by following the instructions provided by the IRS and filling out IRS form 5695 (PDF). Once your application is approved, you will receive 30% of the cost of your system in credit when you file your annual federal tax return.

There are also various state and local solar tax credits and financial incentives available in South Carolina. The Database of State Incentives for Renewables and Efficiency offers a comprehensive list of South Carolina solar incentives. Here are a few you should know about.

South Carolina solar panel companies

Choosing a solar panel installer can feel overwhelming, given the growing number of solar companies in South Carolina. We've compiled a list of solar panel installation companies that set themselves apart in the industry. Here are a few of the top South Carolina solar installers to consider.

Palmetto Solar

Founded in 2010, Palmetto Solar has become one of the largest solar companies in the US and offers solar panels for purchase or through a solar lease or PPA. Currently, most of Palmetto's customers buy its solar panels.

Palmetto offers a subscription model of support called Palmetto Protect. With this service, you'll receive system monitoring and tiered levels of support if your solar panels underperform, fail or are damaged. Solar panels from Palmetto have an efficiency rating above 19.8% and the installer offers a minimum 12-year product warranty and a 25-year performance warranty. 

Solar Energy World

Solar Energy World was founded in 2009 and operates across 10 states, including South Carolina. This installer offers solar panels from several manufacturers, as well as solar batteries and live system monitoring. With Solar Energy World, you can buy your solar panel system outright or sign a lease or PPA.

Solar Energy World's warranty terms are excellent. This installer offers a 30-year manufacturer warranty on panels and inverters and a labor warranty for all service-related issues. It also provides a one-year production warranty that guarantees the system will generate at least 90% of its estimated production within the first year of installation. Solar Energy World has a satisfaction guarantee and its warranties are transferable if you sell your home.

SunPower Solar

SunPower Solar offers some of the best panels in the industry, with an efficiency rating of 22.8%. SunPower Solar also excels in terms of its warranty options, guaranteeing its panels will produce 92% capacity or higher for 25 years. It also offers a 12-year roof warranty, which covers roofing issues after installation, and a 10-year equipment warranty.

SunPower provides an impressive lineup of solar products, including panels and batteries. If you choose SunPower as your installer, you can purchase your solar system or sign a lease or PPA. SunPower's Equinox package includes Maxeon solar panels, Enphase microinverters and necessary mounting hardware.

Sunrun

Sunrun is the largest solar company in America and offers top-tier solar panels, batteries and inverters. While you can buy solar panels from Sunrun, most of Sunrun's customers sign a lease to rent their solar panels for a monthly fee. While solar leases can significantly lower the upfront cost of a solar panel system, it's important to note that you won't own your solar panels. Therefore, you won't qualify for most solar incentives and the savings you will experience will be lower in the long run than if you owned your system.

Sunrun offers "bumper-to-bumper" coverage on system monitoring, maintenance and repairs if you sign a lease or PPA. Customers who buy their system will rely on the manufacturer's warranty terms, which can vary. Sunrun offers a 10-year quality warranty to cover roof damage or installation issues. 

Installation factors to consider

Purchasing or leasing solar panels is a big decision. Before you sign a contract, you must consider the investment from all angles. Here are some installation aspects to think about beforehand.

• Your roof's condition: The age, shape and slope of your roof will affect how much electricity a solar system can generate. For example, the Department of Energy says solar panels will be most efficient (and produce more power) on roofs sloping between 15 and 40 degrees. If your roof is old or needs repairs, you may have to replace it before installing solar panels.
• Your HOA or neighborhood requirements: HOAs cannot ban solar panel installations in South Carolina. However, your neighborhood may have specific requirements or approval processes. Be sure to check before installing solar panels on your property.
• Your insurance policy: Once your solar panels are installed, you should contact your homeowner's insurance agency to update your policy to include the panels. Most standard home insurance policies can include solar panels, so you shouldn't need a separate policy. However, you should check with your agency to confirm the details.
• Your location: While solar panels can generate electricity in indirect sunlight, they will be much more efficient when they get at least 4 hours of direct sunlight per day. South Carolina has more sunny days each year than the national average. However, if your roof has a lot of shade coverage, this is an important factor to consider before deciding.
• Your living situation: If you rent your home, you may not be allowed to install solar panels. Check with your landlord or property manager to confirm whether you can install rooftop solar. If not, community solar is another option. With community solar programs, you can subscribe to solar power produced at another location and get a credit on your energy bills. The amount you pay for this subscription should be lower than the value of the credits.

South Carolina solar power FAQs