In 2007, the State of Louisiana really embraced the addition of solar electricity systems for Louisiana homeowners.
The Federal Government offers a tax credit for 30% of the labor, parts, and all associated installation costs for a Solar Electricity System. This credit is nonrefundable. However, the credit can be carried forward to future years until the entire amount is realized. On a solar electric system in the price range of $25,000, this credit would result in a reduction in tax of $7,500. For tax years prior to 2009 this credit was limited to $2,000. However, for 2009 and going forward, the credit cap is removed.
The State of Louisiana has taken the Federal credit and gone one better. The State of Louisiana offers a 50% credit for the addition of the same solar system as covered by the Federal law. This state credit is in addition to the Federal credit resulting in a total 80% tax rebate towards the purchase price of a new solar electric system for Louisiana residence. The State credit is only limited to the first $25,000 of the cost of the system. However, most systems in the state run in that price range.
Therefore, a Louisiana resident can install a $25,000 solar system, receive a $7,500 Federal tax credit, get a $12,500 State tax credit, and only be out-of-pocket $5,000 in the end. Also, remember that in the State of Louisiana, the electric company is required to purchase any electricity you produce in excess of the electricity you use for a given month - in other words, your meter can run backwards. So the overall tax savings and savings towards your electric bill can help pay for the system in no time at all.
It is a wonder that more taxpayers have not taken advantage of this program. But, who knows, in the near future every other house in Louisiana could have solar panels planted on the roof.
