South Carolina Solar Tax Credits

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    An individual or business can take a state income tax credit equal to 25% of the costs of solar equipment per facility which may be used for heating water, space heating, air cooling, or the generation of electricity in or on a facility in South Carolina and owned by the taxpayer.

    The credit also applies to controls, tanks, pumps, heat exchangers, and other equipment used directly and exclusively for the solar energy system. The term ?system? does not include any land or structural
    elements of the building such as walls and roofs or other features ordinarily contained in the structure.

    The maximum state tax credit for an individual or business is equal to 25% of the costs of installing a solar system equal to $3,500 or fifty percent of the taxpayer’s tax liability for that taxable year, whichever is less. If the amount of the credit exceeds $3,500 for each facility, the taxpayer may carry forward the excess for up to ten years for a maximum of $35,000.

    The maximum federal tax credit for a business is 30% of the total cost of the solar system. However, deductions to the credit could apply in certain situations.

    For both the state and federal tax credit, the solar water heating equipment must be certified for performance by the Solar Rating Certification Corporation, or an equivalent organization approved by the South Carolina Energy Office.

    • For a residential application to qualify for a federal tax credit, the energy saving product must be installed in the taxpayer’s primary residence. This means that a taxpayer cannot take a tax credit for products installed in a rental home, for example. For houses that are jointly occupied, there are special rules on how to allocate the tax credit.

    No federal tax credit is allowed for purchase and installation of solar equipment for heating water for swimming pools and hot tubs.

    • The state tax credit must not be claimed before the installation is completed.

    Be sure to save those receipts that show where and when the product was purchased and how much was paid. Save any promotional literature that warrants that the product is eligible for a tax credit.

    Disclaimer: This information is not intended to provide advice on legal interpretations of the law. This information should not be relied upon in taking or refraining from taking any action related to the topics covered. The best source of information is guidance provided by the Internal Revenue Service and the South Carolina Department of
    Revenue

    South Carolina Energy Office, 1201 Main Street, Suite 430, Columbia SC 29201
    803-737-8030, Toll Free: 800-851-8899. www.energy.sc.gov

    This information is received from www.energy.sc.gov

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