Harness the Power of the Sun with Louisiana Solar Incentives and Rebates
Investing in solar energy is an excellent choice for both residential and commercial properties. Not only are you reducing your reliance on traditional electricity sources, but you’re also contributing to a more sustainable future by generating renewable energy that helps mitigate the effects of climate change.
Did you know that Louisiana receives more sunshine than the national average in the United States? Despite this advantage, the state ranks 38th in installed solar capacity due to its relatively low electricity costs and limited solar incentives. According to the U.S. Energy Information Administration (EIA), Louisiana’s average electricity rate is 14.10 cents per kilowatt-hour, slightly higher than the previous year’s rate of 11.69 cents per kilowatt-hour. The Solar Energy Industries Association (SEIA) reports that less than 0.43% of the state’s energy is generated from solar power, with only 20,500 households powered by solar energy.
In 2016, Louisiana offered an attractive tax credit of 50%, which could result in savings of up to $12,500 for those who installed solar panels, even before applying for the federal tax credit. The combination of these incentives made it an easy decision for many property owners in Louisiana to switch to solar power and take advantage of the available rebates and incentives.
Today, the most significant solar incentive in Union, Justice, and Confidence, Louisiana, comes from the federal tax credit. Property owners can still enroll in net metering and utilize the state’s solar property tax exemption to keep costs low, even if their property’s value increases due to the solar installation. Continue reading to learn more about Louisiana solar incentives.
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Louisiana Solar Incentives, Rebates, and Benefits
Louisiana Net Metering
Initially, Louisiana had a mandatory net metering policy, but it was eliminated in 2019. Currently, utilities can provide net metering as part of their solar incentives, but it’s not required by law. Under the existing framework, only a few utilities offer net metering at a reduced buy-back rate.
For example, Entergy’s Louisiana customers who installed home solar after December 31, 2019, are charged under Rider Schedule DG. This tariff uses a two-channel billing approach, where customers pay the retail rate for all electricity (in kWh) purchased from the utility but only receive credit at the current avoided cost rate for excess energy exported to the grid. As of April 1, 2022, the current buy-back rate was approximately $0.0368.
Under the Entergy tariff, customers are still subject to a fixed customer charge or minimum bill, with any leftover bill credits carried over to the following month’s bill. Customers who have unused credits at the end of the annual billing cycle will be paid by the utility company for the credit balance at the avoided cost rate.
Louisiana Solar Property Tax Exemption
Adding a solar system to your home in Louisiana will not result in a reassessment of your property’s value. Thanks to the property tax exemption law, solar panels and heating equipment are considered personal property exempt from ad valorem taxation. As a result, assessors are prohibited from factoring in the value of solar arrays when determining a building’s taxable value. This means that your property taxes will remain unchanged, and you will continue to pay taxes based on the property’s value before the solar system was installed.
Don’t Forget About The Federal Tax Credit, Louisiana!
While Louisiana may lack state solar incentives for residential solar installations, property owners can still benefit from a property tax exemption and net metering compensation. On top of these incentives, a significant Federal tax credit is available. The Solar ITC or Investment Tax Credit is worth 26% of the system’s total cost and can be deducted from the taxpayer’s federal income tax. However, only those who purchase their system through cash or loan are eligible for this credit, not those who lease. If you lease a system, the incentives will go to the third-party owner. Therefore, purchasing a solar system rather than leasing one is a wise choice.
