Incentives
South Carolina's 25 percent solar credit.
The federal credit for homeowners ended in December 2025. South Carolina's did not. Here is exactly how it works, including who it does not help.
Last reviewed: 2026-08-05
The South Carolina Solar Tax Credit at a Glance
You get a credit equal to 25% of your qualified solar project costs.
Your credit for any one tax year is limited to $3,500.
Total credits you can claim over time are limited to $35,000.
Unused credit can be carried forward for up to 10 years.
The federal residential solar tax credit expired Dec 31, 2025.
How It Works
South Carolina offers a nonrefundable income tax credit of 25% of qualified solar project expenses. The credit helps reduce the state income tax you owe. Any unused credit can be carried forward for up to 10 years, subject to the annual and lifetime caps.
If your state tax owed is less than your available credit, you can only use up to the amount of tax you owe. The remaining amount carries forward.
Key Details
- Credit equals 25% of qualified solar energy system costs.
- Annual credit limited to $3,500 per tax year.
- Total credit limited to $35,000 over your lifetime.
- Unused credit may be carried forward for up to 10 years.
- Credit offsets South Carolina income tax only.
- If you owe little or no state tax, you cannot benefit until you have tax liability to offset.
- The federal residential solar tax credit expired on Dec 31, 2025.
This page is for general information only and is not tax advice. Rules can change and individual situations vary. Consult a tax professional for guidance about your specific circumstances.
Who Is Eligible?
Use this checklist to see if the credit may apply to you.
- You are a South Carolina resident.
- You own the solar energy system.The system must be installed at a home you own in South Carolina.
- The system is new.This credit applies to new solar energy systems.
- The system is used for the home.It must generate electricity for your residence.
- You have South Carolina taxable income.You must owe SC income tax to use the credit.
- You keep good records.Save invoices, contracts, and any documents showing system costs.
Carryforward Timeline
Unused credit can be carried forward for up to 10 years.
- Year 1Use up to $3,500 of credit. Any unused amount carries forward.
- Year 2Apply available credit up to $3,500 or your tax owed, whichever is less.
- Year 3–9Continue using available credit each year, subject to the annual cap.
- Year 10Final year to use any remaining credit. Any amount left after Year 10 expires.
Frequently Asked Questions
Is this a federal tax credit?
No. This is South Carolina's state income tax credit (Form TC-38). The federal residential solar credit ended December 31, 2025.
What happens if I owe little or no state tax?
The credit is nonrefundable, so it only offsets tax you actually owe. With little SC tax liability it may help slowly through the carryforward, or very little. We will tell you honestly before you spend a dollar.
Can a business claim this credit?
Business-owned systems follow different rules and may still qualify for federal commercial incentives through 2027. Ask us about commercial solar.
Does battery storage qualify?
Storage paired with solar can be part of qualified system cost in many cases. We document what qualifies for your specific project.
Do solar loans affect the credit?
You still claim the 25% credit when you finance, since you own the system. Factor the loan's interest into your overall return.
What counts as qualified costs?
Generally the equipment and installation for your solar energy system. Keep invoices and contracts; we help you organize the documentation.
See your potential savings
Every home and tax situation is different. Use our estimator for a personalized look at your potential solar savings.