Solar Energy, Small Hydropower, and Geothermal Tax Credit (Corporate)
Administered by South Carolina Department of Revenue
You can claim a 25% tax credit on the cost of installing solar, small hydropower, or geothermal systems (for water heating, space heating, cooling, or electricity generation) in a building you own, up to $3,500 per facility per year or 50% of your tax liability, whichever is less. Unused credits carry forward for 10 years, but the credit is non-refundable and only reduces taxes you owe. Contact the South Carolina Department of Revenue or a tax advisor to apply and confirm eligibility for your system type.
The program covers 25% of customer installation costs for solar thermal (must be SRCC-certified unless installed before June 19, 2007), solar electric, geothermal heat pumps and electric systems, and small hydropower systems installed after July 1, 2009. You should inform customers that the annual credit cap is $3,500 per facility or 50% of tax liability (whichever is less), that the credit is non-refundable, and that unused credits roll forward 10 years. Customers must have sufficient tax liability and should consult a tax professional to maximize benefit.
South Carolina's corporate tax credit allows a 25% deduction on purchase and installation costs for solar energy, small hydropower, and geothermal systems across residential, commercial, and industrial sectors. The credit maxes at $3,500 per facility annually or 50% of tax liability (whichever is less), with 10-year carryforward for excess credits. Solar-thermal systems require SRCC or comparable certification (except pre-June 2007 installations); the Department of Revenue administers claims and distributes forms. The program targets taxpayers with sufficient liability and aims to reduce renewable energy adoption costs across multiple technology types.
Program details
- Program ID
- 1804
- Effective
- 1/1/2006
- Last updated
- 3/23/2026
Eligibility
- Sectors
- commercial industrial residential
- Technologies
- solar water heat solar space heat geothermal electric 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 offers 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.
