Federal Solar Tax Credit (ITC)
Louisiana residents and business owners can take advantage of the Federal Solar Tax Credit and get a credit of up to 30% (60% for businesses) applied to their tax returns. If you purchase $20,000 worth of solar, you can get a credit for more than $5,000 on your next tax return. Remember, this does require you to come out of pocket first.
End Date
December 31st, 2033
Net Metering
Net metering allows homeowners that create excess energy to use it as a credit on their next electric bill. Net metering in Louisiana is a strong program allowing people the retail rates of electricity when they bank excess.
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Property Tax Exemption
The state of Louisiana does not increase property taxes for those that have a solar panel installation. This can save thousands in property taxes through the years.
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HELP Financing
Homeowners can receive up to $12,000 in low interest financing for their solar installation in the state of Louisiana. Part of this is funded by the DNR.
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If you can answer YES to these three questions, your project may be eligible:
1) Do you:
2) Are you looking for financial assistance to install one of the following at your business, farm, or ranch:
3) Is the project's technology readily available for purchase?
Grant: may cover up to 50% of a project's eligible costs.
Renewable energy systems: $2500 minimum grant request; $1,000,000 maximum grant request.
Loan Guarantee: We may guarantee up to 85% of a commercial loan. Rates and terms are negotiated between you and your lender, subject to USDA approval.
Combination Loan Guarantee and Grant: You may combine assistance to cover up to 75% of eligible project costs.
Our energy programs do not support residential energy projects, agricultural tillage equipment, used equipment, vehicles, or grant writing assistance.
Project technology must be commercially available.
Assistance under these programs is available to applicants in areas designated as "rural". Under law, the definition of "rural area" is different for each program.
The federal investment tax credit (ITC) - more commonly known as the solar tax credit - is equal to 30% of the cost of installing a solar panel system.
So if you pay $50,000 to install a solar power system, your organization will receive a $15,000 credit when it files its taxes. You can learn more about using the solar tax credit for commercial solar installations in this guide from the Department of Energy.
States, utilities, and local governments may provide additional incentives for organizations that go solar. Make sure to check what incentives are available in your area.
Commercial solar power systems can be designed to offset 100% of an organization’s electricity bill.
Full electric bill offset is particularly easy if you install a grid-tied system, which allows you to export surplus power to the grid and import power to meet shortfalls when needed. Further, if net metering is available, you’ll even earn the full retail rate for the power you export!
Full electric bill offset means:
The cost recovery period for solar energy equipment under modified accelerated cost recovery system (MACRS) is just five (5) years.
This means that businesses will benefit from a large reduction in their tax liabilities in their first five years of owning the asset; this is extremely favorable considering solar panels have a warranted life of at least 25 years.
MACRS can be used in conjunction with the solar tax credit. The project’s cost basis is reduced by half the value of the solar tax credit. So, if you use the 30% tax credit (the rate available starting in 2023), you’ll reduce the asset’s cost basis to 85%.
Organizations can choose to finance their solar panels through one of three ways:
Solar systems bought with a solar loan are eligible for the tax credit.
Solar power generation and electricity consumption tend to align closely in commercial solar panel installations. That’s because most organizations consume electricity during the day when the sun is out and solar panels are generating power.
This alignment results in a higher degree of solar power self-consumption. This means that in commercial solar, there is generally:
This is in marked contrast with what happens in homes and the grid in general, which see a major spike in electricity consumption after sunset, exactly when solar panel output drops. This imbalance is known as the Duck Curve, and often needs to be addressed with expensive battery solutions.
The combination of incentives, utility bill savings, and the MACRS depreciation tax benefits means that commercial solar payments can offer a great return on investment - in some cases as short as just 2-3 years.
That is a very short payback period, especially considering how long solar panels are designed to last. You can expect your solar panels to last at least 25-30 years, which is the amount of time most performance warranty periods are offered on current solar panel models.
It’s well-known that businesses that listen to what their consumers want thrive - and, conversely, those that don’t are doomed to fail. And when it comes to climate change and the well-being of our planet, the majority of consumers feel very strongly:
Companies need to show that they’re responsive to these concerns by demonstrating their commitment to clean energy and sustainability. A great way to achieve this is by installing shiny, new solar panels to power their operations, which depict direct and visible positive change.
Corporate giants like Apple, Amazon, Google, Target, and Walmart have caught on to this fact, and are installing massive amounts of solar capacity while announcing ambitious plans to completely transition to clean energy.
Your solar project doesn’t need to be as big as those of the tech and retail giants in order to make a difference. The image below, for example, shows a plant nursery with a small solar array, ingeniously designed to produce clean energy while offering shade to plants and customers alike.
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