Discover all the financing options available for solar energy in North Carolina, including federal tax credits, state incentives, loan programs, and real ROI calculations to maximize your investment.
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Solar Financing Options in North Carolina: A Comprehensive Guide
When you’re considering making the switch to solar energy in North Carolina, understanding your financing options is just as important as selecting the right panels. With the right financial approach, you can transform what seems like a significant upfront investment into an affordable path to energy independence and long-term savings.
North Carolina residents have access to numerous incentives that can reduce solar costs by 30% or more, making 2025 an excellent time to invest in renewable energy. Whether you’re a homeowner in Asheville or a business owner in Greenville, the financial landscape for solar has never been more favorable.
In this guide, we’ll walk you through every financing option available to North Carolina solar customers, helping you find the path that best aligns with your financial goals and energy needs.
What You’ll Learn
Federal Tax Credits for Solar
The federal government offers substantial tax incentives that significantly reduce the cost of going solar. These incentives form the foundation of most solar financing strategies in North Carolina.
The Investment Tax Credit (ITC)
The federal solar Investment Tax Credit allows you to deduct 30% of your solar energy system’s cost from your federal taxes. This credit was recently extended through 2032 as part of the Inflation Reduction Act, providing long-term certainty for solar investments.
For a typical North Carolina home installation costing $20,000, the federal tax credit would reduce your effective cost by $6,000. This credit applies to both residential and commercial installations, making it valuable for all types of property owners.
How the Federal Tax Credit Works
The tax credit is applied when you file your annual federal tax return. To qualify, you must own your solar system (rather than lease it) and have sufficient tax liability to claim the credit. If your tax liability in the installation year is less than the credit amount, you can carry the remaining credit forward to future tax years.
The credit covers the complete solar energy system, including panels, inverters, mounting equipment, and battery storage if installed simultaneously with the solar system. Labor costs for installation are also included in the calculation.
Claiming the Credit
To claim the federal solar tax credit, you’ll need to complete IRS Form 5695 as part of your tax return. We recommend consulting with a tax professional to ensure you maximize this benefit, though the process is straightforward for most taxpayers.
The federal tax credit creates an immediate reduction in your solar investment cost, effectively serving as a 30% discount that makes all other financing options more attractive.
North Carolina-Specific Solar Incentives
Beyond federal incentives, North Carolina offers several state-specific programs that further reduce the cost of solar installations and improve the return on investment for local residents.
Property Tax Exemption
North Carolina provides an 80% property tax exemption for the appraised value of residential solar systems. This means that while solar typically increases your home’s value, you won’t face significantly higher property taxes as a result.
For example, if your solar installation adds $20,000 to your home’s value, only $4,000 of that amount would be subject to property tax. This exemption helps preserve the long-term financial benefits of your solar investment.
Duke Energy’s Solar Rebate Program
While Duke Energy’s popular solar rebate program for residential customers has reached capacity, the utility continues to offer various net metering options that provide credit for excess energy your system produces.
Under net metering, when your solar panels generate more electricity than you’re using, that excess power is sent to the grid, and you receive credits on your utility bill. These credits can offset the cost of electricity you draw from the grid when your system isn’t producing enough, such as at night or during cloudy weather.
NC GreenPower
NC GreenPower, a nonprofit organization, offers production-based incentives for renewable energy generators in North Carolina. Their Solar Schools program provides grants and educational resources for installing solar at K-12 schools.
Local Incentives
Some municipalities and counties in Western North Carolina offer additional incentives for renewable energy. These can include expedited permitting, reduced permit fees, or local tax incentives. The availability of these programs varies by location, so check with your local government or a solar consultant to identify opportunities in your area.
The combination of state and local incentives creates a particularly favorable environment for solar investment in North Carolina, often reducing payback periods by several years compared to states without such incentives.
Solar Loan Options and Partnerships
With the 30% federal tax credit reducing upfront costs, many North Carolina homeowners choose to finance the remaining investment through solar-specific loan programs. These specialized loans are designed with renewable energy projects in mind, offering terms that align with the long-term nature of solar investments.
Clean Energy Credit Union
Sundance Power Systems partners with Clean Energy Credit Union to offer solar loans with competitive interest rates and terms specifically designed for renewable energy projects. These loans typically feature:
– Terms ranging from 12 to 20 years, allowing you to match monthly payments to expected energy savings
– Interest rates that are generally lower than personal loans or credit cards
– No prepayment penalties, giving you flexibility to pay off your loan early
– Simple online application processes with quick approval decisions
SustainableHome™ Program by Credit Human
The SustainableHome™ program offers another financing option for North Carolina solar customers. This program provides unsecured loans specifically for renewable energy and energy efficiency improvements, with competitive rates and flexible terms.
Home Equity Options
Many homeowners leverage the equity in their homes to finance solar installations through Home Equity Loans or Home Equity Lines of Credit (HELOCs). These options often offer lower interest rates than unsecured loans and may provide tax advantages, as interest on home equity loans used for home improvements can sometimes be tax-deductible.
Power Purchase Agreements (PPAs)
Though less common in North Carolina’s residential market, Power Purchase Agreements allow you to host a solar system owned by a third party on your property. You purchase the electricity generated by the system at a predetermined rate, typically lower than utility rates, without owning the equipment. This option requires no upfront investment but provides less long-term financial benefit than ownership.
Choosing the Right Financing Option
The best financing approach depends on your financial situation, tax liability, and long-term goals. During our consultation process, we’ll help you compare different financing scenarios and identify the option that maximizes your return on investment while meeting your monthly budget requirements.
Return on Investment Calculations
Understanding the financial return of your solar investment involves analyzing several factors unique to your situation. Here’s how to calculate the real value of going solar in North Carolina.
Determining Your Payback Period
The payback period represents how long it takes for your energy savings to equal your initial investment. In North Carolina, typical payback periods range from 7-12 years, depending on your electricity usage, system size, and available incentives.
To calculate your specific payback period, we need to consider:
– Your current electricity costs and usage patterns
– The size and cost of your proposed solar system
– Available tax credits and incentives
– Your financing method and associated costs
– Projected electricity rate increases from your utility
Long-Term Savings Analysis
While the payback period tells you when your investment breaks even, the long-term savings reveal the true value of solar. In North Carolina, where electricity rates have historically increased about 3% annually, the 25+ year lifespan of quality solar panels creates substantial savings over time.
For many Western North Carolina homeowners, the lifetime savings from a solar system range from $20,000 to $60,000, depending on system size and energy consumption patterns.
Considering Home Value Increases
Research by Zillow indicates that homes with solar energy systems sell for approximately 4.1% more than comparable homes without solar. For a $300,000 home in Asheville or Hendersonville, that represents a potential $12,300 value increase—another financial benefit to include in your ROI calculations.
Sample ROI Scenario
Let’s examine a typical scenario for a North Carolina homeowner:
– 8 kW solar system cost: $24,000
– Federal tax credit (30%): -$7,200
– Net system cost: $16,800
– Annual electricity savings: $1,800
– Simple payback period: 9.3 years
– 25-year savings (accounting for inflation): $57,000
– Home value increase: $12,300
– Total financial benefit: $69,300
This example demonstrates why solar is increasingly viewed as a sound financial investment, not just an environmental choice. Our team can create a detailed ROI analysis specific to your home during your solar consultation.
Solar Financing Case Studies
Real examples from Western North Carolina homeowners and businesses demonstrate how different financing approaches work in practice. These case studies represent actual Sundance Power Systems customers (with names changed for privacy).
Case Study 1: The Cash Purchase Approach
The Johnson family in Asheville decided to purchase their 10 kW solar system outright, investing $30,000. With the federal tax credit, their net cost was $21,000. Their system generates approximately $2,400 in electricity value annually.
Financial outcome:
– Payback period: 8.75 years
– 25-year savings: $81,000
– First-year return on investment: 11.4%
The Johnsons appreciated the simplicity of the cash purchase and the absence of financing costs. They viewed their solar investment as significantly outperforming many traditional investment options, with the added benefit of energy independence.
Case Study 2: The Solar Loan Strategy
The Martinez family in Hendersonville installed an 8 kW system costing $24,000. They financed the full amount through a 12-year solar loan at 5.5% interest, with a plan to apply their $7,200 tax credit to the principal once received.
Financial outcome:
– Monthly loan payment: $240
– Monthly electric bill savings: $160
– Net monthly cost during loan term: $80
– After loan payoff: $160 monthly savings
– 25-year savings (after loan costs): $38,000
This approach allowed the Martinez family to go solar with no money down. While their savings during the loan period were modest, they still achieved positive cash flow over the system’s lifetime without any upfront investment.
Case Study 3: Commercial Installation with Accelerated Depreciation
Greenleaf Market, a small grocery store in Waynesville, installed a 30 kW commercial system for $75,000. Beyond the 30% federal tax credit, they utilized the Modified Accelerated Cost Recovery System (MACRS), which allowed them to depreciate the system’s value over five years.
Financial outcome:
– Net cost after tax credit: $52,500
– Additional tax benefit from depreciation: approximately $15,750
– Effective total investment: $36,750
– Annual electricity savings: $7,200
– Payback period: 5.1 years
– 25-year savings: $221,000
This case demonstrates how commercial solar installations often achieve faster payback periods due to additional tax benefits not available to residential customers.
Each of these real-world examples illustrates how different financing approaches can be tailored to specific financial situations and goals. During your consultation with Sundance Power Systems, we’ll help you identify which approach best suits your circumstances.
What Our Customers Say
“Sam R. & Alex P. were out to service my 10 year-old solar array this morning – what great guys! Explained everything I asked about, seemed competent & knowledgeable, and friendly, which I especially appreciate. They replaced 2 optimizers & checked the entire array for other issues. Very grateful. I highly recommend Sundance!”
– Robert Lundquist
“Sundance Power is my “go to” company to service my solar assisted radiant floor heating system. Sundance responds immediately to my requests and their technicians are professional and courteous. Most recently, Jordan and Alex provided “same day” response to my service request diagnosing the issue and resolving it within minutes. Last year, Sundance completely renovated my aging radiant unit with a new tankless system which will provide reliable heating for years to come. I highly recommend this company and am very pleased with their commitment to providing superior service at a reasonable price.”
– Jeff & Nancy Kueffer
“It was finally time to go solar. I’ve batted the idea around for a while now, and after a lot of research, quotes, phone calls and in person meetings from several companies, we went with Sundance Power Systems. What set them apart is that they really listened to my needs for the system and followed through. So many others just want to upsell you with more than you need. They also made me an offer with high quality equipment that I couldn’t refuse.”
– Blair Els
Frequently Asked Questions
Can I really afford to go solar in North Carolina?
With the current 30% federal tax credit and flexible financing options, most North Carolina homeowners find that solar is more affordable than expected. Many financing arrangements can be structured so that your monthly loan payment is similar to or less than your current electric bill, creating immediate positive cash flow. During your consultation, we’ll help you determine if solar makes financial sense for your specific situation.
How does weather in Western North Carolina affect my solar investment?
Western North Carolina receives approximately 213 sunny days per year—more than enough to make solar a worthwhile investment. Modern solar technology performs effectively even in partial cloud cover, and our system designs account for local weather patterns to ensure optimal performance. We analyze your specific location’s solar access to provide accurate production estimates before you commit to installation.
What happens to my solar financing if I sell my home?
If you’ve purchased your system outright, it typically adds value to your home (about 4.1% according to Zillow research). If you’ve financed your system with a solar loan, you have several options: pay off the loan from the proceeds of your home sale, transfer the loan to the new homeowner (if they qualify and your loan allows this), or move the system to your new home (though this is less common due to the costs involved). Most home buyers appreciate the value of reduced or eliminated electric bills, making solar homes attractive in the real estate market.
Do solar panels work during power outages?
Standard grid-tied solar systems shut down during power outages for safety reasons. However, adding battery storage to your system allows you to maintain power during outages. Battery solutions can be included in most solar financing packages, though they add to the overall system cost. We can design a system that provides the level of backup power you need, whether that’s running just essential appliances or powering your entire home.
How do I know if my home is suitable for solar?
Several factors determine solar suitability, including roof orientation, shading from trees or structures, roof condition, and electrical system capacity. Our team conducts a comprehensive site assessment to evaluate these factors before recommending a system. We use advanced design tools to analyze your property’s solar potential and provide realistic production estimates based on your specific location in Western North Carolina.
Start Your Solar Journey Today
Since 1995, Sundance Power Systems has helped thousands of Western North Carolina and Upstate South Carolina residents achieve energy independence through thoughtfully designed solar solutions. Our experienced team approaches each project as a unique opportunity, creating customized systems that maximize both energy production and financial returns.
The current combination of generous federal tax credits, state incentives, and favorable financing options makes 2025 an ideal time to invest in solar energy. By understanding the full range of financing options available, you can make an informed decision that aligns with your financial goals and values.
Ready to explore how solar can work for your home or business? Contact our team of renewable energy consultants to schedule your free solar assessment. We’ll analyze your energy needs, evaluate your property’s solar potential, and create a detailed proposal that includes production estimates, system costs, and financing options tailored to your situation.
Start your journey toward energy independence and long-term savings by calling us today at (828) 645-2080 or filling out our online contact form. Together, we can create a cleaner, more sustainable future while making a sound financial investment in your property.