SC SCH.TC-38 - Solar Energy, Small Hydropower System, or Geothermal Machinery and Equipment Credit

Sep 19, 2026

Solar energy, small hydropower, or geothermal machinery and equipment credit form for South Carolina. The credit equals 25% of qualifying installation and purchasing costs, subject to system-type timing requirements and certification standards. It provides a solar energy credit computation worksheet with lines for costs, carryforward, annual limits, per-facility caps, and current-year credit. Instructions explain eligibility, the carryforward period up to 10 years, and document review requirements for SRCC and other federal standards.

LanguageEnglish

CategoryForms

FormatPDF

Pages3

Reading Time1 min

AccessFree to download

Instructions

Credit computation (Solar Energy Credit Computation)

Eligibility by system type

Credit limitations and carryforward

Certification and definitions

| 1350
[dor.sc.gov](dor.sc.gov) |
STATE OF SOUTH CAROLINA
DEPARTMENT OF REVENUE
SOLAR ENERGY, SMALL HYDROPOWER SYSTEM, OR GEOTHERMAL MACHINERY AND EQUIPMENT CREDIT | SC SCH.TC-38
(Rev.3/28/22) 3430
20 | | --- | --- | --- | | Name | | SSN or FEIN | Street address (Location of the property where the system was installed) | City | State | ZIP | | --- | --- | --- | Type of system installed (check one) Solar energy system (must be certified for performance by the SRCC or a comparable entity endorsed by the State Energy Office) Small hydropower system (must be installed on or after July 1, 2009) Geothermal machinery and equipment (must be installed on or after January 1, 2016) Solar Energy Credit Computation 1. Cost of installing qualifying solar energy system, small hydropower system, or geothermal machinery and equipment placed in service during the tax year . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. Maximum credit amount (multiply line 1 by 25%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3. Amount carried forward from previous tax years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . If you are claiming the credit in a carryforward year, begin with this line. 4. Total credit available (add line 2 and line 3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5. Annual credit limit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6. Maximum single-year credit amount (multiply line 5 by the number of facilities) . . . . . . . . . . . . . . . 7. Credit available (lesser of line 4 and line 6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8. Current year tax liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9. Current year credit limit (multiply line 8 by 50%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10. Current year credit (lesser of line 7 and line 9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Individuals enter on the SC1040TC. Corporations enter on the SC1120TC. 11. Credit carryforward (subtract line 10 from line 4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Unused credits may be carried forward for up to 10 years. 1. $ 2. $ 3. $ 4. $ 5. $ 3,500 6. $ 7. $ 8. $ 9. $ 10. $ 11. $ INSTRUCTIONS A corporate or individual taxpayer who owns 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 can claim an Income Tax credit of 25% of the cost of purchasing and installing that system. The credit for a small hydropower system may be claimed only if the system was installed on or after July 1, 2009. Beginning January 1, 2016, an individual taxpayer who owns geothermal machinery and equipment for use in their residence may claim an Income Tax credit of 25% of the cost of purchase and installation of the machinery and equipment. The credit for geothermal machinery and equipment will be repealed on January 1, 2032. For more information about the credit, see SC Code Section 12-6-3587, [available at](available at dor.sc.gov/policy)[ dor.sc.gov/policy](available at dor.sc.gov/policy). The taxpayer may not claim the credit before installation is complete. The amount of the credit in any year may not exceed $3,500 for each facility or 50% of the taxpayer’s tax liability for that year, whichever is less. The taxpayer may carry forward any excess credit for up to 10 years. 34301036 The Solar Energy or Small Hydropower System Credit: • i

FAQs

What credit percentage does South Carolina offer for qualifying systems?

The credit is 25% of the cost of purchasing and installing the qualifying solar energy system or small hydropower system, and also 25% of the cost for qualifying geothermal machinery and equipment.

What are the key date requirements for claiming the credit?

Small hydropower systems must be installed on or after July 1, 2009. Geothermal machinery and equipment must be installed on or after January 1, 2016.

How are credit limits and carryforward handled?

The amount of credit in any year cannot exceed $3,500 for each facility or 50% of the taxpayer’s tax liability for that year, whichever is less. Excess credit may be carried forward for up to 10 years.

Sep 19, 2026

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