Questions & Answers

The Solar Energy, Small Hydropower System, or Geothermal Machinery and Equipment Credit is a South Carolina credit that can be claimed by a taxpayer who owns either

• 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 or on a facility in South Carolina, or
• Geothermal machinery and equipment for use in their residence in South Carolina.

The credit is 25% of the cost of purchasing and installing that system. Note: The credit for a small hydropower system can be claimed only if the system was installed on or after July 1, 2009. The credit for geothermal machinery and equipment is available from January 1, 2016 and will be repealed on January 1, 2032.

You may not claim this credit before installation of the system is complete. The amount of the credit in any year may not exceed $3,500 for each facility or 50% of your tax liability for that year, whichever is less. We will calculate the amount of the credit you can take for this year, as well as the amount you can carry forward. Any excess credit can be carried forward for up to 10 years.

What systems qualify for the Solar Energy, Small Hydropower System, or Geothermal Machinery and Equipment Credit?