Solar Energy, Small Hydropower, and Geothermal Tax Credit (Personal)

March 08, 2024


In South Carolina, taxpayers may claim a credit of 25% of the costs of purchasing and installing a solar energy system or small hydropower 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.

Program Overview

Implementing Sector: State
Category: Financial Incentive
State: South Carolina
Incentive Type: Personal Tax Credit
Web Site:
Administrator: South Carolina Department of Revenue
Start Date: 1/1/2006
Eligible Renewable/Other Technologies:
  • Solar Water Heat
  • Solar Space Heat
  • Solar Photovoltaics
  • Geothermal Heat Pumps
  • Hydroelectric (Small)
Incentive Amount: 25% of eligible costs
Maximum Incentive: In any given tax year a maximum of $3,500, or 50% of taxpayer's tax liability for that taxable year, whichever is less. If the amount of the credit exceeds $3,500 for each facility, the taxpayer may carry forward the excess for up to ten years.
Equipment Requirements: Solar-thermal systems must be certified by SRCC or a comparable entity endorsed by the S.C. Energy Office
Carryover Provisions: Excess credit may be carried forward up to 10 years


This program has 1 incentives
Technologies: Solar Water Heat, Solar Photovoltaics, Geothermal Heat Pumps, Hydroelectric (Small)
Sectors: Commercial, Residential
Parameters: The incentive is 25.00 %


Name: S.C. Code § 12-6-3587
Date Enacted: 6/22/2006
Effective Date: 1/1/2006


Name: Taxpayer Assistance
Organization: South Carolina Department of Revenue
Address: 301 Gervais Street
Columbia SC 29214
Phone: (803) 898-5709

This information is sourced from DSIRE; the most comprehensive source of information on incentives and policies that support renewables and energy efficiency in the United States. Established in 1995, DSIRE is operated by the N.C. Clean Energy Technology Center at N.C. State University.