Louisiana - Energy tax credit, solar rebates and incentives
Louisiana Renewable and Solar Energy Incentives
Tax Credit for Residential Solar and Wind Energy Systems (Residential)
- The state of Louisiana offers a tax credit for homeowners who buy and install solar or wind energy units.
- To be eligible for this tax credit, renewable energy units must be installed at either a residential apartment building or a private residence.
- The tax credit can be used for personal, franchise or corporate tax purposes.
- Credit is applicable to all PV systems and solar thermal systems in which the energy is consumed for water heating, space cooling or space heating.
- Tax credit is equivalent to 50% of the initial $25,000 of expenses pertaining to each individual system. This includes installation and equipment fees.
- The tax credit must be stated in the same taxable year that the system is installed.
- Surplus credit that surpasses the liability of the customer during that year will be requited by the Louisiana Department of Revenue. A reimbursement for the excess amount will be sent to the taxpayer within one year.
- For solar electric systems, credit may be employed for AC or DC-producing systems that are either grid-tied, net metered or independent.
- For solar thermal systems to be eligible, they must serve as generators for water heating, space heating or space cooling.
- Solar thermal systems must follow SRCC standards and abide by relevant building and plumbing regulations.
Solar Energy System Exemption (Residential)
- All solar devices and equipment are completely exempt from property taxes.
- Any solar installation connected to either a swimming pool or residential building that is inhabited by the owner is regarded as a solar energy network. The property is therefore exempt from property tax in proportion to the value of the system.
- Qualifying renewable energy systems: solar panel (PV), solar space heating, solar pool heating, solar water heating and passive solar heating.
Home Energy Loan Program (Residential)
- This program run by the Louisiana Department of Natural Resources (DNR) offers residents a 5-year loan to make conservation energy improvements to their residences.
- The Department of Natural Resources funds 50% of costs for home conservation energy improvements with low rates of interest.
- Subsidies by the DNR are limited to a maximum of $6,000
- In order to be eligible for this program, residential owners must either undergo an energy audit conducted by Energy Home Rater, or select validated conservation energy improvements delineated by the HELP program.
Net Metering (Residential)
This option allows residential units to have their systems linked to the grid, which establishes a two-way energy transfer system. Energy can be either consumed by personal use, or sold to utility companies.
- Qualifying systems include solar, small hydropower, wind and fuel cells. Systems must not exceed a 25 kW capacity for eligibility.
- If there is any net excess generation (NEG) produced by a renewable energy system, the homeowner will be given credit on their monthly bill the following month.
Federal Tax Credit (Residential/Commercial)
Taxpayers are granted a personal tax credit of 30% of the total expenses, which include installation of residential solar-electric systems, solar thermal systems, fuel cells and labor expenses. Residential wind energy installations and geothermal pumps are also subject to a tax exemption.
- Solar electric systems and solar thermal heaters have no maximum incentive.
- If there is excess federal tax credit, it may be carried over to the subsequent taxable year only if it surpasses tax liability.
- The Federal Energy Tax Credit is in force through 2016.
Federal Energy Conservation Subsidy Exclusion (Residential)
- Public utilities provide residential purchasers with an exemption of 100% of energy conservation subsidies.
- The overall worth of an installation or renewable utility regardless of the energy conservation capacity, will be excluded from the buyer’s gross income.
- Customers who participate in a utility company’s energy conservation program may be given a reduced rate of electricity utilized or a nonrefundable credit of the price of electricity on the customer’s monthly electric bill.
Energy-Efficient Mortgages (Residential)
With this federal loan program, homeowners may utilize energy-efficient mortgages (EEM) to either supplement or completely fund renewable energy systems.
Example: 4KW System – Residential Installation Cost
Average Electric Bill: $250/mo
Projected Annual Bill Escalation: 5%
Cost Per Watt: $6.50
- Estimated System Cost: $26,000
- Federal/State Tax Credit: $20,800
- State/Utility Rebate: $0
- Net Cost: $5,200
- Cumulative Lifetime Savings (25 Years): $24,390
- Investment Return: 11.1%
Savings of 66% on the total cost of your solar system through incentives