Questions & Answers

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

The Solar Energy or Small Hydropower System Credit:
  • includes a system installed in or on a facility in South Carolina owned by the taxpayer
  • includes costs of installing systems that generate electricity without cooling or heating
  • includes the cost of purchasing a system and installation costs
  • is limited to $3,500 in any tax year for each facility
  • must be certified for performance by the Solar Rating and Certification Corporation (SRCC) or a comparable entity endorsed by the State Energy Office
  • may only be claimed for a small hydropower system if installed on or after July 1, 2009
The Geothermal Machinery or Equipment Credit:
  • includes machinery or equipment owned by the taxpayer for use at the taxpayer's residence
  • includes the cost of a heat pump that uses the ground or groundwater as a thermal energy source to heat a structure or as a thermal energy sink to cool a structure
  • includes the cost of machinery or equipment that uses the internal heat of the earth as a substitute for traditional energy for water heating or active space heating or cooling
  • is for machinery and equipment that, on the date of installation, meets or exceeds applicable federal Energy Star requirements
  • may only be claimed if the system is installed on or after January 1, 2016
  • is limited to $3,500 in any tax year
Certification:
  • The SRCC certifies solar hot water systems.
  • Any solar interconnection agreement between a utility and a taxpayer is certification the system has been reviewed by an appropriate entity.
  • Taxpayers with a solar energy system not connected to the grid must complete the Certification for PV Systems form found at energy.sc.gov .
  • For all other equipment, the manufacturer certifies the equipment meets applicable federal standards.
  • Keep all system, machinery, and equipment certifications with your tax records.

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