Article: 50455

Overview 

The Solar Energy System Credit is a nonrefundable income tax credit available to South Carolina residents who purchase and install qualifying solar energy systems on their property. This incentive supports renewable energy use and helps offset the cost of installation. 

Eligibility Requirements 

You may qualify for this credit if: 

• You are a South Carolina taxpayer who owns a solar energy system, 

• The system was purchased and installed in South Carolina on or after January 1, 2006, 

• The system is used to produce heat, hot water, cooling, electricity, or energy for another purpose, and 

• It meets the state’s qualifications as a solar energy system, including solar panels and certain solar water heaters. 

Note: Leased solar systems do not qualify. The system must be owned and installed by the taxpayer. 

Credit Amount and Limits 

• The credit is 25% of the total eligible system costs (including equipment and installation). 

• The credit is nonrefundable, meaning it will reduce your tax owed but will not increase your refund. 

• Carryforward: Any unused portion may be carried forward for up to 10 years. 

How to Report 

1. Navigate to the State Taxes section on the left-hand side of the screen. 

2. Click the link: I’d like to see the forms I’ve filled out or search for a form.

3. In the dropdown menu, select South Carolina. 

4. Click on the Credits tab. 

5. Click on Solar Energy System Credit to open the form. 

6. Enter all applicable information.  

7. Click Save once complete. 

Additional Resources 

 For further information see:  https://dor.sc.gov/forms-site/Forms/TC38.pdf