A pier on Myrtle Beach
South Carolina is home to waterfalls, lakes, and the Blue Ridge mountains as well as amazing beaches and coastal resorts. The Palmetto state is also filled with historical sites dating back to the Civil War and the Revolution. Using clean energy will keep the waters clear and the skies above blue. Read on to see what the state legislature has done to promote solar and other renewable power sources.
South Carolina’s (Lack Of A) Renewable Portfolio Standard
A Renewables Portfolio Standard (“RPS”) is a law or other piece of regulation that mandates that a certain percentage of at state’s energy production comes from renewable resources by specified target dates. If you keep up with renewable energy policy, you already know that a great many states have passed such Standards. Many of the RPS’ mandate goals as high as 30%, even 40% production in the not-that-distant future.
South Carolina currently lacks an RPS. We need to get on board with Colorado, California, New York, New Jersey, Connecticut, Rhode Island, Oregon, Washington, Arizona, and so many more states that have already passed strong RPS’s to ensure a bright future for solar power and other renewable energy. And believe me, a strong RPS is integral to that bright future. Nobody wants to give you free money – least of all the utilities. Without a strong RPS pushing them, the fat-cat politicians and businessmen have no incentive to give you incentives. Incentives for more solar power, that is!
Solar Performance Payments in South Carolina
Despite the lack of an RPS, there are two performance payment plans supporting solar power here, though only one is really worth writing about. The first, a Duke Energy program designed to help the utility meet its North Carolina RPS goals, offers a measly five dollars per megawatt-hour of solar power produced. That will net you about $30 per year with the average residential system. While thirty bucks is thirty bucks, it’s certainly nothing to write home about.
The other performance payment option here is much stronger. The Palmetto Clean Energy (PaCE) Program encourages green power here in the The Palmetto State. Incentives vary over time, but currently the PaCE Program is offering a very strong $0.10 premium for every kilowatt-hour of solar power produced by systems less than 6 kilowatts (“kW”) in size (the average residential system, is about 5 kW, so that solar power system you’re thinking about should qualify). That’s about $100 per megawatt-hour, twenty times the offer from Duke Energy.
South Carolina Utility Solar Power Rebates
Here’s where you really start to see the lack of an RPS kick in. South Carolina’s utility companies currently do not offer any rebates to reduce the out of pocket cost of a solar power system, and this time there are no green power advocating non-profits coming to the rescue, like the PaCE program did for statewide performance payments. If we had a strong RPS in place here, you can bet that the utilities would have their own programs like solar power rebates to incentivize solar power. There’s a good reason we’re so sure: that’s the way it’s worked every where that a top-notch Standard has been implemented.
South Carolina Solar State Tax Credits
While the state legislature has dropped the ball on the RPS, they’ve scored a slam dunk with South Carolina’s Solar Energy Tax Credit. When you install a residential solar power system here, you’re entitled to claim a state tax credit of 25% of the purchase and installation costs. That’s a whole lot of taxes you won’t be paying in April. The maximum credit that can be applied in a single tax year is $3,500 or 50% of your state tax liability, whichever is less. Unused credit may be carried forward for 10 years.
Solar Tax Exemptions in South Carolina
Unfortunately the lawmakers down in Columbia didn’t follow up that excellent tax credit with tax exemptions. The sales taxes exemption that we’ve seen in lots of other states would save you 6% on the cost of a solar power system here. A property tax exemption would save you even more. When you install a solar power system, your home goes up in value. We’ll go over just how much in a minute, but we’re talking thousands, and usually double digits at that. Not paying property taxes on that value is like a gift that keeps on giving, and passing a statewide exemption for assessed home value from solar power systems would help you make the switch without ever taking a dime out of the state’s bank account. Sounds like a win-win to us.
Utility Prices in South Carolina
South Carolina pays an average of 12.22 cents per kilowatt-hour (“kwh”) of electricity. That’s nearly a cent more than the national average of 11.43 cents/kwh. That’s pretty good. Yes we said good. Electricity is too cheap almost everywhere. Cheap, and dirty. Fossil-fuel backed, smog-spewing, greenhouse gas emitting, earth-killing dirty.
When all those fossil fuels really start to bite us in the butt, or start to run low … or both … electricity rates are going to rise, and fast. When that happens you’re going to be really, really happy you switched early to all that efficient, clean solar power that will be in high demand. In the meantime, solar power will still save you a chunk of change here. We’ll go over just how much in a minute.
South Carolina Net Metering and Interconnection
South Carolina lacks the clear net metering law and regulations that we’ve seen elsewhere, but in 2009 the Public Service Commission did approve a standard net metering program for all three investor-owned utilities here (SCE&G, Progress Energy, and Duke Energy”). All of your surplus energy generation is credited to the your next bill at the retail rate, and then surrendered to the utility annually on either May 31 (Progress Energy) or June 1st SCE&G / Duke Energy). That’s a pretty standard net metering program. Unfortunately there are built-in charges here that you don’t see in the best net metering programs. In order to start net metering here, you have two select from one of two plans: 1) opt for a time-of-use (TOU) tariff that incorporates potentially high demand charges into its fee structure; or 2) pay an additional monthly fee to net meter. Both tariffs involve additional charges that do not apply to customers who do not net meter.
The overall net metering score is dragged down to failing levels because, in addition to a far below average residential program, small system size limits prevent larger customers from generating all of their on site energy needs, and small circuit capacity loads can prevent people from getting onto the grid and taking advantage of net metering savings.
Interconnection receives a failing grade here as well. The $100 application fee isn’t wallet-breaking, but it’s $100 more than most states for small residential systems. You’ll also be required to install a redundant external disconnect switch, and to carry homeowner’s insurance with a minimum of $100,000 in coverage. No separate insurance on top of your homeowner’s policy is required. Considering the small system sie limit and low aggregate capacity limit, that’s a pretty abysmal interconnection program. And residential systems have it easy here. Commercial and industrial customers face higher charges and insurance requirements.
5kW Example Return on Investment in South Carolina
What do all the numbers add up to for you? Let’s check:
Installing a typical 5kW solar system should start at about $25,000. Don’t freak – that’s gonna drop fast!
- We start with the South Carolina solar tax credit. You get 25% of costs back, but the cap is $3,500 in each year. So subtract that $3,500 for a new price of $21,500. And remember you have another $2,750 in state tax credits coming next year!
- The feds calculate the 30% federal solar tax credit from out of pocket costs. Since the state tax credit doesn’t reduce those out of pocket expenses, you get 30% of the full $25,000. Subtract $7,500 for a new price of $14,000.
- Next subtract those SREC payments via the PaCE Program. That’s another $624 back, for a new price of $13,376.
- Finally we subtract your first year’s energy savings, which we estimate to be about $763. That brings your final cost after the first year to $12,163. That’s already less than half of where we started
- With a conservative estimate for the future rise of electricity prices, you can expect your new solar power system to pay for itself in just 8 years.
- In addition to those direct wallet-fattening savings, you also increased your home value by more than 15 grand.
- Best of all, on top from all that green in your pocket, you’ve created a bunch of green for the planet; 110 trees worth, every year your solar power system is humming, and you’re not buying fossil-fuel based electricity.
Like we said, the best way to know exactly how much money solar power can save you is to talk to one of our partners on the ground. Just grab your free quote one of then will be more than happy to go over all those details and help you craft a plan to get the absolute most out of a solar power system in your home. Your quote is 100% free (yes, that’s right, 100% free) and you can get as many of them as that smart shopper in you desires!
South Carolina Solar Consensus
Solar policy is a bit stop and go here. The missing RPS continues to be a tremendous worry, and the abysmal net metering and interconnection standards make the entire foundation of support for solar power look shaky. Despite the cracks in the foundation however, the combination of the PaCE back performance payments, the big state tax credit, and above-average energy prices drive initial costs to adequate levels, and payback timeframes to well past average. Given that 8 year payback timeframe, we gave The Palmetto State a solid “B.” Careful though; we can’t rest on those laurels here. With all those cracks in the foundation, one slip and solar policy can go backwards fast.