South Carolina net metering runs on a two-track system. If you applied for interconnection before June 2021, your solar system earns credits at the full retail electric rate under grandfathered terms that last for a set number of years. If you apply now, you fall under a utility-specific solar choice tariff that pays for exported energy at the lower avoided-cost rate rather than the retail rate you pay as a consumer. Residential systems are capped at 20 kilowatts, and no credits accrue until your utility issues a formal Permission to Operate.
Who Qualifies and What Size System You Can Install
State law defines a “customer-generator” eligible for net metering or the solar choice tariff. For homes, the system cannot exceed 20 kilowatts AC.1South Carolina Legislature. South Carolina Code Title 58 Chapter 40 Section 58-40-10 – Definitions That 20 kW ceiling is the practical dividing line for residential solar in the state, and it also sets the threshold for the property tax exemption discussed below.
Nonresidential customers had been limited to the lesser of 1,000 kilowatts AC or 100% of contract demand. As of June 1, 2025, nonresidential customers on a time-of-use rate schedule can install systems up to 5,000 kilowatts AC, provided excess energy credits reset at the end of each monthly billing period. Systems above 5,000 kilowatts are possible only if the utility and customer agree and the Public Service Commission approves the arrangement.1South Carolina Legislature. South Carolina Code Title 58 Chapter 40 Section 58-40-10 – Definitions
Every system must be intended primarily to offset the customer’s own electricity use, not run as a small power plant. The South Carolina Energy Office recommends reviewing your utility bills from the past 12 months to size the system correctly, since most utilities will not provide full retail credit for generation that consistently exceeds your consumption.2South Carolina Energy Office. Select a System The equipment itself has to sit on a single premises you own or control, be interconnected in parallel with the utility grid, and meet safety standards from Underwriters Laboratories, IEEE, and the National Electrical Code.1South Carolina Legislature. South Carolina Code Title 58 Chapter 40 Section 58-40-10 – Definitions
Grandfathered Net Metering vs. Solar Choice Tariffs
Which side of the rules you land on depends entirely on when your interconnection application went in. The gap between the two rates is the single biggest factor in what your solar system is worth over time.
Grandfathered Customers
If you applied for net metering before May 16, 2019, your system receives credits at the full retail electric rate until December 31, 2025. If you applied between May 16, 2019 and May 31, 2021, you receive full retail credits until May 31, 2029.3South Carolina Office of Regulatory Staff. Duke Energy Solar Choice Rates Impact to Consumers Considering Solar These grandfathered terms transfer to subsequent owners of the property, so buying a home with a solar system enrolled before June 2021 preserves the favorable rate.4South Carolina Legislature. South Carolina Code Title 58 Chapter 40 – Net Energy Metering
Full retail rate credit means each kilowatt-hour you export is worth the same as each kilowatt-hour you import. Pay 14 cents per kWh on your bill, and your exported energy earns 14 cents per kWh. One for one. Once your grandfathered term expires, your system transitions to whichever solar choice tariff is in effect at that time.
Solar Choice Metering
Applications received after May 31, 2021 fall under utility-specific solar choice metering tariffs approved by the Public Service Commission.4South Carolina Legislature. South Carolina Code Title 58 Chapter 40 – Net Energy Metering These tariffs compensate exported energy based on an avoided cost methodology, which reflects what the utility would have spent to generate or purchase that power itself, rather than the retail rate you pay as a consumer.5Dominion Energy. Rate PR – Avoided Costs Methodology Avoided cost is almost always lower than retail rate, often substantially so.
This shift traces back to the South Carolina Energy Freedom Act (Act 62), signed May 16, 2019, which directed the Public Service Commission to design new tariffs balancing the interests of solar customers and non-solar ratepayers. The stated goal is eliminating cost shifts between the two groups “to the greatest extent practicable,” which is why credit rates for new enrollees came down.4South Carolina Legislature. South Carolina Code Title 58 Chapter 40 – Net Energy Metering6South Carolina Office of Regulatory Staff. South Carolina Energy Freedom Act
The Commission has to update the value of customer-generated energy annually and revisit the full methodology every five years. The tariff must also guarantee a minimum number of years under its approved terms, giving new solar customers some rate certainty even as the program continues to evolve.4South Carolina Legislature. South Carolina Code Title 58 Chapter 40 – Net Energy Metering One protection worth knowing: the law bars utilities from penalizing you for using your own solar-generated energy behind the meter. The compensation structure only touches energy that actually flows back to the grid.
How Your Credits Get Applied and Cashed Out
Under both grandfathered net metering and the solar choice tariff, credits for excess generation roll forward month to month. You build up credits during long summer days and draw them down in winter when production drops and heating loads rise. The important question is what happens to any balance still on your account at the end of the annual cycle.
At Dominion Energy South Carolina, the annual settlement happens in the November billing cycle. Any excess energy credits remaining at that point are paid out at the avoided cost rate, regardless of whether you are on a grandfathered plan or the solar choice tariff.7Dominion Energy. SC Residential Solar Programs Even grandfathered customers earning full retail credits month to month get the lower avoided cost rate for any leftover balance at true-up. Size your system to use most of what you generate over the year rather than consistently overproducing.
The true-up month and settlement terms vary by utility, so check your provider’s tariff schedule. Duke Energy and Dominion each administer their own version of the program with slightly different structures. The avoided cost rate itself changes annually based on the utility’s fuel mix and generation costs, so the per-kWh value of leftover credits is not fixed from year to year.
The Interconnection Steps Before You Get Credits
Your solar array cannot generate a single credit until it clears a formal interconnection process with your utility. This is where most delays happen.
You will need your current utility account number and recent billing statements to verify the service location. Your installer typically supplies the technical documentation: manufacturer and model numbers for the solar modules and inverters, an aerial site plan showing equipment placement, and a single-line wiring diagram from panels to the utility meter. Most utilities accept applications through online portals. While your installer prepares the diagrams, the account holder is ultimately responsible for the accuracy of the submission.
Interconnection fees vary. Santee Cooper, for example, requires a $500 non-refundable pre-application fee.8Santee Cooper. Generator Interconnection Standard Confirm the exact amount with your provider before submitting.
Once the utility has your request, it has a set number of business days to confirm whether the application is complete. At Dominion Energy South Carolina, the initial completeness review takes 10 business days, and if something is missing you typically get another 10 business days to provide it.9Dominion Energy. SC Generator Interconnection Procedures, Forms, and Agreements Other utilities follow similar but not identical timelines.
After preliminary approval from the utility, your local building authority must inspect the installation to verify it meets electrical codes. That municipal inspection is a prerequisite before the utility moves forward. Following a successful inspection, the utility may conduct a witness test or swap your meter for a bidirectional device that tracks energy flowing in both directions.
The final step is the Permission to Operate letter. This document formally authorizes your system to be energized and connected to the grid.10City of Georgetown. Residential Solar Do not turn the system on before receiving it. Energizing without a PTO can violate your interconnection agreement and create real safety hazards for utility workers who may not know your line is back-feeding the grid.
Property Tax Exemption for Home Solar
South Carolina exempts qualifying residential solar installations from property tax assessments. Under Section 12-37-220(B)(53), renewable energy property with a nameplate capacity of 20 kilowatts AC or less is excluded from your property’s assessed value. The exemption covers panels, inverters, battery storage configured to charge from onsite solar, and related interconnection equipment.11South Carolina Legislature. South Carolina Code Title 12 Chapter 37 – Assessment of Property Because the residential system cap under net metering is also 20 kW, virtually every home installation that qualifies for net metering also qualifies for the exemption. You get the resale value boost without the annual tax hit.
What Happened to the Federal Tax Credit
The federal Residential Clean Energy Credit under 26 U.S.C. Section 25D, which had covered 30% of solar installation costs, expired for expenditures made after December 31, 2025.12Office of the Law Revision Counsel. 26 USC 25D – Residential Clean Energy Credit If you own your solar system outright and it was placed in service in 2026 or later, you cannot claim this credit. A $25,000 installation that would have returned $7,500 on your 2025 federal taxes now returns nothing from the residential credit.
Third-party owned systems, such as leased panels or power purchase agreements, may still generate tax benefits under the separate commercial clean energy credit (Section 48E), but that credit belongs to the system owner, not the homeowner. You might see indirect savings through lower lease or PPA rates if the solar company passes some of the tax benefit along, but you will not be filing for the credit yourself.
South Carolina also offers a state-level solar energy tax credit. The South Carolina Energy Office lists both federal and state tax credit information for residents considering solar.13South Carolina Energy Office. Tax Credits, Incentives, and Net Metering Check with a tax professional or the Energy Office directly for current eligibility and dollar caps, since state credit terms can change with legislative sessions.