The solar incentive landscape looks a bit different in 2026. With recent policy changes for new solar projects, homeowners and businesses may be wondering: What incentives are still on the table?

The good news is that South Carolina has some serious solar savings to offer! With businesses able to claim a federal tax credit through 2027, and both residential and commercial projects qualifying for state income tax credit, making the switch to solar is still a viable investment.

Navigating tax credits, eligibility requirements, and changing policies can feel hard to digest. In this guide, Sugar Hollow Solar will break down the South Carolina solar incentives currently available, how they work, and what you should know before going solar!

For Homeowners: Residential Tax Credit

While federal solar tax credits are no longer available for new residential projects in 2026, South Carolina homeowners can still take advantage of the state’s solar tax credit. Understanding the incentives available can help you plan for the cost of your system and see how solar fits into your long-term energy goals. And who doesn’t want some money back on an investment?

This tax credit allows individuals to claim up to $3,500 per year, or 50% of their tax liability, whichever is less. Additionally, if you can’t claim the full amount in the first year, you can carry forward the unused portion for up to ten years, providing significant financial relief for investing in solar energy.
South Carolina has a little advantage over other states where solar incentives have been reduced or allowed to expire. For South Carolina homeowners, the state tax credit remains an opportunity to offset a portion of the cost of going solar and make this long-term investment in clean energy more affordable

If you’re considering going solar, Sugar Hollow can walk you through the numbers and help you understand how the tax credit will apply.

For Business Owners: Commercial Tax Credits

Commercial solar incentives can look a little more complicated as several different tax benefits may apply depending on the project and type of business. Federal incentives, state tax credits, depreciation, project size, and construction timelines all play a role, but we firmly believe in the long-term benefits and ROI of solar energy for most businesses and nonprofits.

South Carolina businesses alongside homeowners, can also take advantage of the state’s 25% Solar Energy Tax Credit when they purchase and install a qualifying solar energy system. Like the residential tax credit, the state credit is limited to $3,500 per facility or 50% of the taxpayer’s SC tax liability for the year, whichever is less, with unused credits eligible to be carried forward for 10 years. (to a maximum of $35,000 tax benefit)

Businesses may also benefit from 100% bonus depreciation for qualifying property acquired and placed in service after January 19, 2025. Unlike a tax credit, which directly reduces the amount of tax you owe, bonus depreciation allows businesses to deduct the full eligible cost of qualifying property from their taxable income. This can help reduce the business’s overall tax liability in the year the property has solar commissioned.

Federal incentives can make commercial solar even more valuable! Qualifying businesses can receive a 30% federal tax credit through the Clean Energy Investment Credit, with an additional 10% Domestic Content Adder available for projects that meet the requirements. Together, that can bring the total federal tax credit to 40% of the eligible solar system cost.

Are You a Nonprofit or House of Worship?

Eligible nonprofit organizations and houses of worship may qualify for up to 40% Direct Pay on a qualifying solar project, paid directly by the IRS. This can include the 30% Base Investment Tax Credit (ITC) + 10% Domestic Content bonus, and you don’t need a federal tax liability to qualify.

Timing Matters

Under recent federal changes, solar projects that begin construction after July 4, 2026, need to be fully installed by December 31, 2027 to remain eligible for the federal credit.

This timeline may seem daunting, but Sugar Hollow Solar has already helped many businesses take advantage of the available solar incentives and can do the same for yours. Our team can help you understand which incentives apply to your project, and see how they can add up to significant savings. From navigating the available credits to getting your system operational, we’ll work with you every step of the way to help you meet the end-of-2027 deadline and take advantage of the incentives available to your business.

Real Sugar Hollow Solar Client Example

Tax incentives can be easier to understand with a real-world example. Here’s an example of a South Carolina manufacturing facility that installed a 82.6 kW solar system:

Gross System Cost: $143,788 (82.6 kW System)
40% Federal Tax Credit (ITC + Domestic): -$57,515
25% SC State Tax Credit (Capped): -$35,000
Bonus Depreciation Tax Benefit: -$34,509
Net Out-Of-Pocket System Cost: $16,764 (*88% Total Savings!)
Financial ROI: 3.6-Year Payback | 22.7% Internal Rate of Return

(40% ITC + 24.3% SC Tax Credit + 24% Depreciation Tax Benefit)

As this example shows, the right combination of incentives can make a significant difference in the overall cost of a solar investment. With the help of Sugar Hollow Solar commercial experts, businesses can better understand the incentives available to them and how they will help shorten the payback period on the solar investment.

How to Claim for Your Home or Business

The South Carolina Solar Energy Tax Credit is claimed after your qualifying solar system has been installed, and you’ll need to complete the appropriate SC tax forms when filing your state taxes. Because tax incentives can depend on the taxpayer, project structure, and installation/construction dates, we recommend working with Sugar Hollow Solar and your tax professional to determine which incentives apply to your project.

The bottom line is, when it comes to incentives for going solar, now is always the best time to make the transition. Incentives and rebates are continually decreasing, not the other way, and when you can start saving money now, why wait?

Sugar Hollow Solar is here to help you make the most of your solar investment. Whether you’re a business, nonprofit, or homeowner looking to make the switch to clean energy, we are here to help you navigate available incentives and find the right solar solution! Click HERE for more information or simply give us a call to get started today! 864.668.5620