Climate change is real, and it’s a problem everyone is facing. The need for evasive and transformative action is paramount. We must do something to change course immediately so that we can save our planet. This is becoming widely accepted as not just conjecture but a moral imperative.
That’s why many people in our society are focused on taking action to fix it. Whether it’s recycling, reducing waste, or exploring alternative energy, many people are taking it upon themselves to contribute to our planet’s future.
A solution to this widespread problem that is growing in popularity is solar power. Whether we’re talking about individual homes, neighborhoods, communities, or statewide mandates, it’s becoming increasingly easier to do and well worth the investment. At this point, states are even incentivizing the use of solar power. This is especially true in South Carolina, where the rebates and financial benefits of switching to solar energy are tremendous.
How Do Solar Panel Systems Work?
Before we get into the financial benefits of choosing solar power over other electricity sources, we should spend a little time discussing how solar installation and solar energy work.
The best way to understand how solar panels work is by understanding the math. There are a few things we must know in order to understand how solar power works.
First, you need to know how much electricity can be generated from a solar panel. Energy production typically depends on the model, but modern solar panels sold in 2020 typically generate within 260 to 400 watts of energy, depending on the number of cells in the solar panel.
Second, you need to know how much electricity you need to generate. You can easily figure out the amount of electricity required to power your home by looking at the kW usage on your electricity bill.
Third, you need to talk to a solar panel installer. Professional installers will be able to calculate how much sun your home receives, how many solar panels you need, and the ultimate cost of that installation. Price varies, depending on many different factors, so it’s often best to explore your options with a trained solar panel system installation expert.
What is Net Metering?
To answer this question, we must further examine how solar panel systems work. To understand this, we first need to know where the newly created energy is stored. So, we naturally begin with the grid system.
The grid system is a relatively simple concept to understand, but there’s still a bit of confusion about how solar power grids work. Every home located “on the grid” has a utility meter connected to their home that electricity providers use to provide and measure the electricity doing into your home. When a home utilizes solar power, the energy collected will automatically connect to that meter.
All of the energy you created goes into the grid. That means that every bit of solar energy collected by your home, your neighborhood, and your state is collected and stored or routed through the grid before being distributed to homes. If you have a solar battery installed, then your process is different.
Whenever you produce more electricity than you use with your solar panel system, the extra energy is stored in the grid, and that’s where net metering comes into play. In many states, you get a financial credit every month for the extra energy you use.
In South Carolina, instead of providing you with an immediate financial kickback, they roll over all the extra energy you create to the next month and then pay you on an annual basis. This is incredibly useful because it allows you to build up energy during peak production times to be used in times when you need it most.
Customers who use South Carolina Electric & Gas (SCE&G) get to utilize this program just the way we described, in the form of credits for the solar energy they create. If your panels aren’t producing enough electricity to cover your energy needs, then those credits will kick in and allow you to cover the extra cost you might accrue. SCE&G provides energy for a 22,000 square mile territory in western, southern, and central South Carolina.
For customers who use Duke Energy, the process is similar. Customers are given a bill credit for the additional unused energy they produce in a given month, carrying over to the next month, allowing customers to use that credit when their energy needs are too great. Duke Energy covers many states, including South Carolina, and allows all the states they cover the same net metering benefits.
Why Is This Important?The grid systems and net metering programs are essential tools that essentially allow solar customers to bank all the extra electricity they produce so that they can use it later. This system was essentially created to solve the “rainy day” issue. Many people were worried about getting solar power because they thought they wouldn’t have electricity on rainy days or other inclement weather periods. With the grid system storing all of the extra power and the net metering programs allowing customers to save the extra energy they produce, you’ll always have energy available, even on those “rainy days.” This program is especially beneficial during peak hours when electricity companies charge more for energy because people with extra electricity stored won’t have to pay those peak prices.
The Cost of Solar Installation in South CarolinaAnother thing we should discuss is how much it costs to have solar panels installed in South Carolina. In 2019, the average cost of solar installation in South Carolina was between $13,345 and $18,055, while the cost per watt was between $2.67 and $3.61 per watt. The average time required to recoup that investment, also known as the “payback period,” is a little under eight years. The best way to learn how much it would cost to get solar energy for your home is to speak with a solar installer. They will provide a consultation and give you a more precise estimate of the cost of solar installation.
The Federal Tax Credit for Choosing Solar EnergyThe federal solar tax credit, officially called the Federal Investment Tax Credit (ITC), is a federal program that incentivizes solar energy installation and utilization. Originally established in 2005 and extended through 2021, the program allows commercial and residential solar users to deduct a percentage of the cost of the solar system from their taxes. This percentage has changed over the years. From 2016 to 2019, it was a 30% credit. In 2020, new solar customers get a 26% credit. In 2021, new solar customers will get a 22% credit. And in 2022 and all subsequent years, new commercial and residential solar customers will get a 10% tax credit based on the cost of your solar system installation.
How Do You Claim the Solar Federal Tax Credit?To be eligible for the Federal Investment Tax Credit, you need to have a new solar energy system installed on your property. The installation has to be paid for in full using cash or a loan. If you’re just leasing the solar panel system, you aren’t technically the system owner and can’t claim the tax credit. To utilize the credit, you’ll just need to claim in your tax return.
The South Carolina State Tax CreditWhile all United States citizens are eligible for a federal income tax credit, some citizens are also eligible for a state income tax credit. Thankfully, South Carolina is one of those states. This tax credit allows customers who install a new solar panel system to claim up to 25% of their purchase and installment costs for their state’s taxes. The highest credit a customer can claim in any one tax year Is $3,500 or up to 50% of what they owe that year, whichever amount is lower.
Solar Rebates in South Carolina
If you live in South Carolina, your energy company may also reward you with a rebate to cover the cost of your solar system installation. It depends on which utility company you use.
Duke Energy Process
Duke Energy is a utility company in South Carolina. Customers who use this company are allowed to claim one dollar ($1) for every watt of solar energy they install on their commercial or residential property. For instance, with a 6-kW (kilowatt) system, that’s an additional $6,000 consumers get to take home to cover the cost of their solar panel system installation.
Santee Cooper is another utility company in South Carolina. This company has an incentive program that allows customers to claim $1.30 per watt of solar energy installed on their homes or businesses. The maximum amount a customer can claim is $5,200.
We’ve discussed many things about solar energy today, including how solar power works and how that energy is stored. We’ve also covered the financial benefits of using solar energy, from federal tax credits to state tax credits to localized and statewide solar incentives.
Providing solar rebates is just another example of how states are growing more aware of solar energy power. South Carolina is a leader in incentives because they understand how vital solar energy is for our planet’s future. With all of these rebates and credits, solar customers in South Carolina can save thousands of dollars on their installations.
It’s our responsibility to change course and positively affect our planet. Solar power is just one ingredient in making those great changes. For some, it’s their first step to making a responsible and positive impact on our climate.