Solar power in North Carolina has been increasing rapidly, from less than 1 MW in 2007 to nearly 470 MW in 2013, due to declining panel costs, a 30 percent federal grant known as a 1603 grant, available through December 31, 2011, and a 30 percent tax credit available through 2016. The 30% credit is in addition to any local incentives, and pays for 30% of the cost of installation through a tax credit, which can be rolled over if less taxes are owed that year. The difference between a tax deduction and a tax credit is substantial, as a deduction depends on your tax rate to determine your savings, but a tax credit is directly available to repay the cost of installation. A 2012 estimate indicates that a typical 5 kW solar array will pay for itself in 6 years, and thereafter generate a substantial profit.
In addition to federal incentives, the state has a Renewable Portfolio Standard of 12.5% by 2021 and a state renewable energy tax credit, both of which have been credited with boosting solar installations.