Solar Tax Credit In North Carolina
North Carolina homeowners installing a qualifying solar energy system in 2025 are eligible for the federal Residential Clean Energy Credit, which provides a 30 percent credit on the full cost of the installation against federal income tax. Qualifying equipment includes solar photovoltaic panels, solar water heaters, and battery storage systems installed at a primary or secondary residence. The credit is claimed on IRS Form 5695.
North Carolina previously offered a state tax credit for solar energy installations, but that credit expired and is no longer available for new installations. North Carolina does exempt solar energy equipment from state sales tax, reducing the purchase cost of a system. The state also has a property tax exemption for the appraised value added by a solar energy electric system, meaning your property tax assessment should not increase solely because of a solar installation.
North Carolina utilities are required to offer net metering to residential solar customers, allowing homeowners to earn bill credits for excess electricity generated. Retaining your installer's itemized invoice, proof of payment, and equipment certifications is important for claiming the federal credit accurately. If the 30 percent federal credit exceeds your tax liability in the installation year, the unused portion carries forward to offset taxes in subsequent years.