Incentives & Benefits

The Best Solar Incentives, Tax Credits, & Rebates in Louisiana

Incentive

Federal Solar Tax Credit (ITC)

Summary

  • Louisiana offers a 30% state tax credit for residential solar energy systems installed between 2024 and 2032, which can be combined with the 30% federal Clean Energy Credit (ITC). Additionally, a 100% property tax exemption is available for solar systems, enhancing the financial benefits for homeowners.
  • State Credit: A 30% state tax credit is available for solar systems installed between 2024 and 2032, often for systems up to $25,000.
  • Federal Credit: The 30% federal solar tax credit (ITC) applies to installations completed between 2022 and 2032, reducing federal income tax liability.
  • Combining Credits: Homeowners can potentially combine state and federal incentives for significant savings.
  • Eligibility: The credit is applicable to solar systems installed on residential, single-family detached homes.
  • Refundable Credit: Any state credit exceeding the tax liability can be treated as an overpayment and refunded by the Louisiana Department of Revenue.


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.

None

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.

None

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.

None

USDA Rural Energy for America Program (REAP)

Is REAP right for me?

If you can answer YES to these three questions, your project may be eligible:

1) Do you:

  • Earn at least 51% of your income from farming or ranching? OR
  • Operate a privately owned, for-profit small business located in a rural area or town of 50,000 people or less?

2) Are you looking for financial assistance to install one of the following at your business, farm, or ranch:

  • A system that will generate renewable energy? OR
  • Eligible energy efficiency measures that will reduce energy costs?

3) Is the project's technology readily available for purchase?

What funding is available?

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.

What are the limitations?

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.

Common Incentive & Benefits Questions

  • Solar tax credit and other incentives

    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. 

  • Lower operating costs through electric bill offset

    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: 


    • Protection against utility rate hikes: As you are producing and consuming your own power, you are less affected by any future electricity price increases.
    • Positive cash flow: Many organizations that go solar see this benefit from Month One as the loan repayments (if you financed the panels) can cost less than the bill savings. 
    • Free electricity: Once your solar panels are paid off, you’re essentially powering your organization for free.

  • MACRS depreciation

    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%.

  • Flexible purchase and finance options

    Organizations can choose to finance their solar panels through one of three ways: 


    • Solar loan: You take a loan to purchase the solar panels and make monthly repayments over 5-20 years
    • Solar lease (aka renting solar): You pay a solar company a fixed monthly rate (‘rent’) for the use of their solar panels

    Solar systems bought with a solar loan are eligible for the tax credit. 

  • Alignment of generation and consumption

    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:


    • Less need for energy storage - a good thing, as battery solutions increase solar’s upfront costs and payback periods
    • Increased savings in places where net metering (full retail rate for solar exports) is unavailable

    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. 

  • Quick payback period

    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.

  • Green credentials

    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:

    • 60% of U.S. adults believe that climate change is a major threat to the nation
    • 79% say they are changing their buying preferences based on environmental impact, social responsibility, or inclusiveness 

    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.