South Carolina Laws and Incentives

Listed below are the summaries of all current South Carolina laws, incentives, regulations, funding opportunities, and other initiatives related to alternative fuels and vehicles, advanced technologies, or air quality. You can go directly to summaries of:

State Incentives

Battery Manufacturing Tax Incentive

For taxation purposes, the taxable fair market value of manufacturing machinery and equipment purchased for use at a renewable energy manufacturing facility may be reduced by 20% of the original cost. Qualified renewable energy manufacturing facilities include those manufacturing batteries for hybrid electric, fuel cell, or other motor vehicles the South Carolina Energy Office has certified. Qualified facilities must invest at least $100 million in the project and create at least 200 new full-time jobs with an average compensation level of 150% of the annual per capita income in South Carolina or the county where the facility is located, whichever is less. Additional restrictions apply. (Reference South Carolina Code of Laws 12-6-3377, 12-10-30, 12-15-20, 12-15-30, 12-37-930)

Alternative Fueling Infrastructure Tax Credit

An income tax credit is available for 25% of the cost to purchase, construct, and install qualified alternative fueling infrastructure. Qualified property includes equipment used to distribute, dispense, or store alternative fuel. Eligible fuels include natural gas and propane. The entire credit must be taken in three equal annual installments beginning with the taxable year in which the facility is placed into service. Unused credits may be carried forward for up to ten succeeding taxable years. A taxpayer may transfer the tax credit to eligible agencies after notifying the South Carolina Department of Revenue. This tax credit expires January 1, 2026. (Reference South Carolina Code of Laws 12-28-110, 12-37-2820, and 12-6-3695)

Biofuels Distribution Infrastructure Tax Credit

A taxpayer that purchases, constructs, or installs, and places into service a qualified commercial facility for distributing or dispensing biofuels is eligible for an income tax credit of up to 25% of the purchase, construction, and installation costs. Eligible property includes pumps, storage tanks, and related equipment used exclusively for distributing, dispensing, and storing biofuels. A qualified facility must clearly label the equipment used to store or dispense the fuel as being associated with the biofuel. The credit must be taken in three equal annual installments beginning with the taxable year in which the facility is placed into service. Qualifying fuels include blends containing at least 70% ethanol (E70) dispensed at the retail level for use in motor vehicles, and pure ethanol or biodiesel fuel dispensed by a distributor or facility that blends these non-petroleum liquids with gasoline or diesel fuel for use in motor vehicles. (Reference South Carolina Code of Laws 12-6-3610)

Biofuels Production Facility Tax Credit

A taxpayer that constructs and places into service a commercial facility for the production of biofuel is eligible for a tax credit of up to 25% of the cost of constructing or renovating a building and equipping the facility. Production of biofuel includes intermediate steps such as milling, crushing, and handling feedstock and the distillation and manufacturing of the final product. The entire credit must be taken in seven equal annual installments beginning with the taxable year in which the facility is placed into service. Qualifying fuels include liquid non-petroleum based fuel that can be placed in motor vehicle fuel tanks and used to operate on-road vehicles, including all forms of fuel commonly or commercially known or sold as biodiesel and ethanol. (Reference South Carolina Code of Laws 12-6-3610)

Hydrogen and Fuel Cell Tax Exemption

The following are exempt from state sales tax: 1) any device, equipment, or machinery operated by hydrogen or fuel cells; 2) any device, equipment, or machinery used to generate, produce, or distribute hydrogen and designated specifically for hydrogen or fuel cell applications; and 3) any device, equipment, or machinery used predominantly for manufacturing, or research and development involving hydrogen or fuel cell technologies. (Reference South Carolina Code of Laws 12-36-2120(71))

Natural Gas Vehicle (NGV) Weight Exemption

A vehicle powered primarily by natural gas may exceed the state's gross, single axle, tandem axle, or bridge formula weight limits by an amount equal to the difference of the weight of the natural gas tank and fueling system and the weight of a comparable diesel tank and fueling system, up to 2,000 pounds. Upon request, the vehicle operator must provide documentation that verifies the weight of the natural gas fueling system. (Reference South Carolina Code of Laws 56-5-4160(M))

Idle Reduction Weight Exemption

Any motor vehicle or combination of vehicles equipped with idle reduction technology is allowed to exceed the maximum gross vehicle and axle weight limits by up to 550 pounds to compensate for the added weight of the idle reduction technology. The vehicle operator must provide documentation that the vehicle is equipped with fully functional idle reduction technology. (Reference South Carolina Code of Laws 56-5-4160(L))

Alternative Fuel Vehicle (AFV) Revolving Loan Program for Public Entities

The South Carolina Energy Office (SCEO) provides low interest loans for a variety of energy efficiency improvements, including AFV conversions and incremental costs, with qualified project payback periods. Eligible recipients include state agencies, local governments, public colleges and universities, school districts, and private non-profit organizations. Private non-profit organizations and local government entities may be eligible for loans of up to 100% of eligible project costs ranging from $25,000 to $500,000 per state fiscal year. For state agencies and public educational institutions, SCEO will provide 70% of each project's funding as a loan and entities may also be eligible for ConserFund Plus grant of up to 30% project cost. For more information, see the ConserFund website. (Reference South Carolina Code of Laws 48-52-650)

Alternative Fuel Vehicle (AFV) Revolving Loan Program for Private Entities

The South Carolina Business Development Corporation provides low interest loans for a variety of energy efficiency improvements, including AFV conversions and incremental costs, with qualified project payback periods. Eligible recipients include business and industries; utilities, non-profit organizations, and government entities may be eligible under special conditions. The loan may cover up to 100% of the project costs ranging from $50,000 to $1 million and must be repaid after one and one half times the projected payback period of the loan. For more information, including application deadlines, see the Energy Efficiency Revolving Loan website. (Reference South Carolina Code of Laws 48-52-650)

Alternative Fuel Vehicle and Infrastructure Financing

The SouthCarolinaSAVES (SCSAVES) Green Community Program provides low cost financing to eligible government entities, institutions, and commercial and industrial entities for qualified conservation measures, including natural gas and propane vehicle conversions, incremental costs of eligible vehicles, and alternative fueling infrastructure. Financing is available for up to 100% of the project cost ranging from $500,000 to $5 million. Projects must have a payback period of no more than 15 years. The low cost financing is made possible through Qualified Energy Conservation Bonds allocated by the South Carolina Energy Office and issued by the South Carolina Jobs-Economic Development Authority. For more information, see the SCSAVES website.

Laws and Regulations

Biofuel Blending Capability Requirements and Liability

Terminal operators and other entities involved in the bulk transfer of gasoline or diesel, including suppliers and refiners, must offer all grades of petroleum products not already pre-blended with ethanol and biodiesel, and ensure that the motor fuel is suitable for subsequent blending with biofuels. Terminal operators and other bulk suppliers are not liable for fines, penalties, injuries, or damages resulting from subsequent blending of fuel sold at retail locations. Furthermore, no individual or entity can deny a distributor and retailer from blending biofuels for sale in South Carolina, as long as the individual or entity is registered with the U.S. Internal Revenue Service. (Reference South Carolina Code of Laws 39-41-235)

Plug-In Electric Vehicle (PEV) Cost Recovery

A public electric utility may seek recovery of the costs associated with programs and resources related to distributed energy resources and load management technologies, including PEV charging, as part of a rate case filing through the South Carolina Public Service Commission. (Reference South Carolina Code of Laws 58-39-120 and 58-39-130)

Hydrogen Fueling Infrastructure Permitting and Safety

Individuals or entities must submit an application and pay a $10 fee to the State Fire Marshall or a certified designee before renovating or constructing a facility to store or dispense hydrogen fuel. The South Carolina State Fire Marshall must ensure that the state laws governing hydrogen fueling infrastructure are executed faithfully; require compliance with nationally recognized fire prevention and protection standards for hydrogen fueling infrastructure; develop training and certification requirements for county and municipal officials to permit hydrogen fueling infrastructure; develop minimum requirements for the design, construction, location, installation, and operation of equipment for storing, handling, and dispensing hydrogen; and perform random inspections of licensed fueling infrastructure. When a codes and standards organization that is certified by the American National Standards Institute develops a standard procedure for training and certifying officials for permitting on hydrogen fueling infrastructure, the State Fire Marshall may adopt this procedure. (Reference South Carolina Code of Laws 23-9-20 and 23-9-510 through 23-9-570)

Alternative Fuel Vehicle Fee

Beginning January 1, 2018, owners of plug-in electric vehicles and fuel cell electric vehicles must pay a biennial fee of $120, in addition to standard registration fees. Hybrid electric vehicle owners must pay a biennial fee of $60. (Reference House Bill 3516, 2017, and South Carolina Code of Laws 56-3-645 and 12-28-110(39))

Idle Reduction Requirement

Vehicle operators may not idle any commercial diesel vehicle with a gross vehicle weight rating of more than 10,000 pounds for more than 10 minutes in any one-hour period. Exemptions apply for the following: traffic conditions; prevention of safety or health emergencies; emergency or law enforcement; maintenance, service, repair, or diagnostic purposes; state or federal inspections; power work-related operations; loading or unloading; sleeper berth temperature control during 1) rest or sleep periods, 2) times when the ambient outside air temperature is less than 40 degrees Fahrenheit or greater than 80 degrees Fahrenheit, or 3) at rest areas, terminals, truck stops, or legal parking locations greater than 500 feet from homes, schools, hospitals, or daycare facilities. Violators are subject to a $75 fine for each offense. A portion of the fine will go towards the Diesel Idling Reduction Fund operated by the South Carolina Department of Health and Environmental Control to develop an idling awareness program. (Reference South Carolina Code of Laws 56-35-10 to 56-35-80)

Biodiesel Blend Distribution Mandate

All state-owned diesel fueling facilities must provide fuel containing at least 5% biodiesel (B5) at all diesel pumps. (Reference South Carolina Code of Laws 12-63-30)

State Agency Preference for Alternative Fuel and Advanced Vehicles

State agencies purchasing motor vehicles must give preference to hybrid, plug-in hybrid electric, all-electric, biodiesel, hydrogen, fuel cell, or flexible fuel vehicles when the performance, quality, and anticipated life cycle costs are comparable to other available motor vehicles. (Reference South Carolina Code of Laws 1-11-310)

Biodiesel Use in School Buses

The South Carolina Department of Education must fuel state school bus fleets with biodiesel when feasible. (Reference South Carolina Code of Laws 59-67-585)

Propane Safety and Liability

An individual involved in installing liquefied petroleum gas (propane) systems or manufacturing, distributing, selling, storing, or transporting propane is immune from the civil liability associated with injury or damage associated with these activities, as long as the individual was exercising reasonable care and took steps to warn the end user of the misuses of the propane system. Any individual that alters or modifies propane equipment must notify the licensed propane dealer that will use the system of the repairs or modifications. The state propane board must ensure that the laws of South Carolina affecting propane are executed faithfully, institute proceedings for law violations relevant to propane, and declare and enforce regulations relating to propane and related equipment. (Reference South Carolina Code of Laws 15-3-690, 40-82-20, and 40-82-270)

Low-Speed Vehicle Access to Roadways

A low-speed vehicle is defined as a four-wheeled motor vehicle, other than an all-terrain vehicle, that is capable of reaching speeds of at least 20 miles per hour (mph) but not greater than 25 mph, has a gross vehicle weight rating of less than 3,000 pounds, and meets the safety standards in Title 49 of the U.S. Code of Federal Regulations, section 571.500. A low-speed vehicle may operate only on secondary highways with a posted speed limit of up to 35 mph, but may cross a highway with posted speed limits over 35 mph at an intersection. A low-speed vehicle must be registered and licensed in the same manner as a passenger vehicle and is subject to the same insurance requirements applicable to other motor vehicles. Homemade low-speed vehicles, retrofitted golf carts, or any other similar vehicles do not qualify as low-speed vehicles. (Reference South Carolina Code of Laws 56-1-10, 56-2-100 to 56-2-130, and 56-5-820)