Solar Energy, Small Hydropower, and Geothermal Tax Credit (Personal)
Administered by South Carolina Department of Revenue
You can claim a state tax credit equal to 25% of the cost to install solar, geothermal, or small hydropower systems—up to $3,500 per year per facility or 50% of your tax liability, whichever is less. Unused credits carry forward for 10 years. To qualify, solar-thermal systems installed after June 19, 2007 must be certified by SRCC or an entity endorsed by the South Carolina Energy Office. Note that this is a non-refundable credit, so you must owe enough in taxes to benefit.
This 25% tax credit (capped at $3,500 annually per facility) makes customer projects more affordable and can be a key selling point for solar, geothermal, and small hydropower installations. Your customers should provide you with proof of system cost and installation details to claim the credit; solar-thermal systems installed after June 19, 2007 must carry SRCC certification or equivalent endorsement from the South Carolina Energy Office to qualify.
South Carolina offers a 25% personal income tax credit (maximum $3,500 per facility per year or 50% of tax liability, whichever is less) for solar thermal, solar electric, geothermal, and small hydropower systems installed in taxpayer-owned buildings. Unused credit carries forward 10 years. The program was expanded in 2009 to include small hydropower and in 2016 to include geothermal; solar-thermal systems installed after June 19, 2007 require SRCC or South Carolina Energy Office–endorsed certification. Administration falls under the South Carolina Department of Revenue, which has issued tax forms and instructions.
Program details
- Program ID
- 1803
- Effective
- 1/1/2006
- Last updated
- 3/23/2026
Eligibility
- Sectors
- commercial residential
- Technologies
- solar water heat solar space heat solar photovoltaics geothermal heat pumps hydroelectric (small)
Program summary
In South Carolina, taxpayers may claim a credit of 25% of the costs of purchasing and installing a solar energy system, small hydropower system, or a geothermal system for heating water, space heating, air cooling, energy-efficient daylighting, heat reclamation, energy-efficient demand response, or the generation of electricity in a building owned by the taxpayer. Effective July 1, 2009, SB 1141 expanded the scope of this credit to include small hydropower systems. Only hydropower systems installed after July 1, 2009 are eligible for the tax credit. HB 3874 of 2016 expanded the scope again to include geothermal energy projects.
The maximum credit a taxpayer may take in any one tax year is $3,500 for each facility or 50% of the taxpayer's tax liability for that taxable year, whichever is less. Unused credit, or credit that exceeds the annual cap, may be carried forward for 10 years.
The term "system" includes "all controls, tanks, pumps, heat exchangers, and other equipment used directly and exclusively for the solar-energy system." The term "system" does not include any land or structural elements of the building, such as walls and roofs, or other equipment ordinarily contained in the structure.
Solar-thermal systems must be certified by the Solar Rating and Certification Corporation (SRCC) or a comparable entity endorsed by the South Carolina Energy Office to qualify for the credit, unless the system was installed before June 19, 2007.
The South Carolina Department of Revenue has issued forms and instructions for claiming the tax credit.
Contact & resources
- Additional resources
Please verify current program details with the administering agency before making any financial decisions.
