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Recent federal actions cast uncertainty over the future of North Carolina’s solar industry. But people familiar with the history of rooftop solar in the state say uncertainty is nothing new.
Jesse Solomon is the sales director at NC Solar Now in Raleigh. He said that unpredictability is inherent in an industry that lies squarely at the intersection of interest rates, technological advancements and energy policy. He calls it the “solar coaster.”
“You can be cruising along thinking that you have a tax credit until after 2030 and then all of a sudden, it's stripped away,” Solomon said.
But the looming loss of the federal solar tax credit isn’t the first hurdle installers have had to clear this past decade. In 2015, North Carolina ranked first in the Southeast for solar capacity, with just over 1,000 megawatts. Then North Carolina eliminated the 35% state tax credit, but that didn’t sink the solar ship. New installations fell nearly 50% in 2016 before beginning a steady six-year climb.
“We lost the state tax credit in 2015, and then from 2016 on was our largest growth period,” Solomon said.
The success of solar is tied to its rate of return — how long it will take homeowners to make back the money they spent on the new system. In 2017, Duke Energy offered a state-mandated rebate program that gave homeowners up to $4,000 and businesses up to $30,000.
Solar installers received another economic boost when interest rates hit historic lows in 2020. The industry rode that low-APR and rebate wave, and North Carolina rocketed to fourth in the nation for solar by 2022, for total installed capacity.
2024 was a return to pandemic levels
August and September 2023 saw a big spike in solar registrations as homeowners hurried to file interconnection requests under Duke’s “Legacy Net Metering rate.” As a result, October installations spiked, but this left little work for folks to do by the beginning of the next year.
“Q1 of 24 was probably one of the hardest [quarters] for all solar companies in the history of the business,” Solomon said.
2024 was the first full year under Duke Energy’s new net metering system. Homeowners were no longer strictly earning a 1:1 rate on the solar energy they returned to the grid. Instead, the utility valued energy based on time-of-use, with customers earning more for solar during peak hours and less during periods of low demand. The utility also started charging a flat fee to solar owners to pay for grid services.
2024 was the state’s lowest performing year in five years. By contrast, this past year presented many unexpected — if short-term — boons to the solar industry. In western North Carolina, companies received requests from homeowners looking to shore up their energy supply after Hurricane Helene wiped out power for weeks. Duke Energy’s new battery incentive programs brought down the cost of pairing battery storage with new solar systems.
“We kind of ramped up these crews in anticipation of this tax credit going away,” Solomon said, reflecting on 2025 so far. “But we were doing a higher volume in general.”
Some clouds on the horizon for solar
There are a few storms on the horizon that North Carolina’s solar industry might weather in 2026. North Carolina still offers an 80% property tax abatement for solar systems. A House bill earlier this session, called The Farmland Preservation Act, took aim at the abatement. The bill’s supporters wanted to recapture the lost county revenue that the tax breaks forfeited; however, others argued that the tax breaks led to project construction that otherwise may not have materialized.
Duke Energy’s PowerPair program is a three-year pilot program that offers homeowners up to $9,000 to cover the cost of rooftop solar installations that include battery storage. The availability of that incentive depends on the service territory; Duke Energy Progress has already reached capacity. The company started a waitlist for customers in the event that some installations fall through. About one-third of Duke Energy Carolinas’ capacity remains.
- Read more: Solar installers ‘booked’ through 2025 as homeowners rush to get expiring federal tax credits
Despite these possible challenges, Solomon is optimistic about 2026. He said he’s already “selling pretty heavily” into the year without the tax credit. Duke Energy’s battery control incentives have also buoyed customer interest,
“Most people are going to pivot towards the solar plus one battery, because you get the security of power in the event of an outage, and then you also have the bill elimination aspect of it,” Solomon said.
Battery storage allows solar panels to continue running during blackouts when they would otherwise shut off to avoid electrifying lineworkers. They allow a home to form a kind of energy island.
Aaron Davis, CEO of South Carolina’s Firefly Solar, decided to hedge his bets. He’s expanding into general construction to fill any business holes left by the federal tax credit.
“We're getting into general construction: HVAC, generators and different things like that,” Davis said.
Even lacking support from the Trump administration, rising electricity rates make the case for solar stronger as homeowners search for ways to cut monthly expenses. The price of electricity is lower in the Carolinas than the national average, but it still outpaced inflation last year, according to numbers from the U.S. Energy Information Administration.
“The elephant in the room is data centers and [artificial intelligence] centers and so on that are being developed all over the country,” Davis said. “They require a huge amount of energy and and the infrastructure is just not there to support that, which means that rates are going to go up significantly.”
