North Carolina does not have a state solar tax credit. The state’s 35% renewable energy tax credit expired for systems placed in service after January 1, 2016, and no replacement has been enacted.1Department of Energy. Expired, Repealed, and Archived North Carolina Incentives and Laws The 30% federal residential clean energy credit that many homeowners paired with their installations is also gone for new projects: the One Big Beautiful Bill Act, signed July 4, 2025, terminated it for any solar electric property placed in service after December 31, 2025.2Internal Revenue Service. Residential Clean Energy Credit What North Carolina homeowners still have is an 80% property tax exclusion on solar equipment, a Duke Energy rebate program for solar paired with battery storage, and statutory protection against most HOA restrictions.
The Expired State Credit
North Carolina’s renewable energy tax credit equaled 35% of the cost of qualifying renewable energy property. To claim it, the system had to be placed in service before January 1, 2016.1Department of Energy. Expired, Repealed, and Archived North Carolina Incentives and Laws The legislature allowed it to lapse and has not reinstated it. If a quote or sales pitch references a 35% state credit, it is out of date by nearly a decade.
The Federal Credit Is No Longer Available for New Systems
The Inflation Reduction Act had extended the federal residential clean energy credit at 30% through 2032, with step-downs scheduled for 2033 and 2034. The One Big Beautiful Bill Act cut that short. Any solar electric property placed in service after December 31, 2025 does not qualify.2Internal Revenue Service. Residential Clean Energy Credit
If you completed a solar installation and it became operational on or before December 31, 2025, you can still claim the 30% credit on your 2025 federal return. The credit covers panels, inverters, mounting hardware, labor, and battery storage with a capacity of at least 3 kilowatt-hours.3Department of Energy. Solar Investment Tax Credit: What Changed? It is nonrefundable, so it can reduce your tax liability to zero but will not generate a refund beyond what you owed; any unused amount carries forward to future years. For a $30,000 system, the credit is $9,000.
One wrinkle for people claiming it: utility rebates for buying or installing the equipment must be subtracted from your qualified expenses before you calculate the credit. A $3,000 utility rebate reduces your eligible basis by $3,000. Net metering payments for excess electricity sold back to the grid do not reduce the basis.2Internal Revenue Service. Residential Clean Energy Credit
A great deal of marketing material and installer paperwork still references the 30% credit as if it were ongoing. For any system you plan to place in service in 2026 or later, it is not. Ask when a quote was last updated, and recalculate based on the full purchase price.
The 80% Property Tax Exclusion
The most valuable state-level benefit still on the books is a property tax exclusion. North Carolina law requires local tax assessors to exclude 80% of the appraised value of a solar energy electric system from the property tax base.4North Carolina General Assembly. North Carolina General Statutes 105-275 The statute defines a solar energy electric system as all equipment used directly and exclusively for converting solar energy to electricity.
What that means in practice: if your installation adds $25,000 in appraised value to your home, only $5,000 of that is taxed. The other $20,000 is excluded. Without this protection, a sizable installation could add hundreds of dollars to your annual property tax bill. The exclusion is applied through the county’s regular reappraisal process. It is worth confirming with your county tax assessor that the solar equipment has been classified correctly, because the dollars at stake over the life of the system are real.
Duke Energy PowerPair Rebate
Duke Energy’s PowerPair pilot pays residential customers a one-time incentive for installing rooftop solar paired with battery storage. The program provides up to $9,000 per home: up to $3,600 for the solar panels and up to $5,400 for the battery.5NC Clean Energy Technology Center. New Duke Energy PowerPair Pilot Program Approved by NC Utilities Commission Enrollment is first-come, first-served and the program has limited capacity.6Duke Energy. PowerPair – Solar + Battery Incentives
You apply through a Duke Energy Trade Ally, who designs a system that meets program specifications. Duke Energy typically reviews a submitted application within 10 business days. If capacity is full, you may be placed on a waitlist. A recently installed system may still qualify if you apply within 90 days of its operational date.6Duke Energy. PowerPair – Solar + Battery Incentives
Two boundaries to keep in mind. PowerPair requires both solar and a battery; panels alone do not qualify. And it is a Duke Energy program. If your electricity comes from a municipal utility or an electric cooperative, contact that provider directly to ask what incentive or net metering options apply in your service area.
If you take a PowerPair rebate and also claim the federal credit for a 2025 installation, remember to subtract the rebate from your eligible basis before calculating the 30% credit.
HOA Restrictions on Solar Panels
If you live under a homeowners association, state law limits how much the HOA can block. Under N.C. Gen. Stat. ยง 22B-20, any deed restriction, covenant, or similar agreement that would prohibit or effectively prohibit a solar collector on residential property is void and unenforceable.7North Carolina General Assembly. North Carolina General Statutes 22B-20
HOAs retain some authority. They can adopt reasonable rules about placement and screening, provided those rules do not prevent reasonable use of the system. An HOA could ask that panels be mounted on a less visible roof face, for example, but it could not force a location that would gut the system’s output. The association may also require you to accept financial responsibility for damage caused by installing, maintaining, or removing the panels.
One carve-out matters: condominiums in multi-story buildings created under Chapter 47A or 47C of the General Statutes are not covered. Associations for those buildings may restrict solar installations on shared or common roof areas.7North Carolina General Assembly. North Carolina General Statutes 22B-20
What the Numbers Actually Look Like Now
With the federal credit gone and no state credit to fall back on, the arithmetic for North Carolina solar in 2026 looks different than it did last year. A system that would have cost $25,000 after the 30% federal credit now costs the full amount up front. The property tax exclusion keeps your annual tax bill from jumping, and a PowerPair rebate can take up to $9,000 off a solar-plus-battery installation, but neither matches the scale of what the federal credit used to deliver.
Solar can still make financial sense. Panel prices have dropped substantially over the past decade and electricity rates keep rising. The payback period is simply longer than it was when both state and federal credits were in play. When you compare quotes, look at your current electricity costs, your roof’s sun exposure, and the compensation your utility offers for excess energy sent to the grid. Those three factors drive the long-term return more than any single incentive on the table today.