Louisiana Financial Incentives for Going Green

renewable energy system

Louisiana homeowners who want to install a renewable energy system at home, such as solar or wind, can take advantage of a state tax credit to help offset the upfront cost.

Through net metering you can get credit for the excess energy you generate. There is also a property tax exemption on renewable energy systems.

You may qualify for rebates and low-interest loans for energy efficiency improvements you make in your home. There are many loan companies in Louisiana offering short-term loans from $100 to $35,000.

Tax credit for residential solar and wind energy systems

According to the Louisiana Clean Tech Network, a state tax credit for residential renewable energy systems went into effect on January 1, 2008.

If you install a residential solar photovoltaic, solar space heating, solar water heating, solar pool heating, or wind system you may qualify for a tax credit of 50% of the first $25,000 of the cost of materials and installation, for a total credit of up to $12,500. You can apply the credit against your Louisiana state income tax and if the credit exceeds your tax liability, you can receive a refund for the difference.

A solar system can be AC or DC generation and can be either connected to the grid and net metered or stand alone. Wind systems that qualify for the tax credit include AC or DC electric generation and mechanical systems.

The electrical equipment must be UL certified and the installation must meet all applicable building and electrical codes. You can qualify for the credit if you use a licensed contractor, a person who has received certification by a technical college for installing these systems, or if you install the system yourself.

Solar energy property tax exemption

The Database of State Incentives for Renewables & Efficiency points out that solar energy equipment attached to a residence or swimming pool in Louisiana is considered personal property exempt from the ad valorem tax.

The value of the solar energy system is not included in the property tax assessment. This includes passive and active solar space heating, solar water heating, solar pool heating, and solar photovoltaic systems.

Net metering

When you install a renewable energy system at home or at your business and are connected to the grid, you can take advantage of net metering to receive a credit on your electric bill for the net excess electricity you generate.

Qualifying systems include solar photovoltaic, wind, hydroelectric, geothermal electric, biomass, and fuel cells or micro-turbines that use renewable fuels.

The net excess is credited to your next bill at the utility’s retail rate and is carried over indefinitely. You must notify the utility company 90 days before the interconnection date. The utility company must provide you with a meter that can measure the flow of electricity in both directions.

The utility company bears the cost of the meter, but you will have to pay a one-time charge for having it installed.

Home energy rebate

The Louisiana Department of Natural Resources offers cash rebates when you make energy efficiency improvements to an existing home. New homes are no longer eligible. The rebate is 20% of the resulting energy savings, referred to as the Energy Efficiency Premium, up to a maximum of $2,000.

To apply for the rebate, you must first contact a Louisiana Home Energy Rater to have an evaluation of your home’s energy efficiency, before making the improvements.

You can find a list of qualified Home Energy Raters on the Louisiana Department of Revenue website under Home Energy Rebate Option. The website indicates that the cost of a rating is generally between $300 and $600, depending on the size and complexity of your home.

The rater proposes the energy efficiency improvements you can make. Once they are completed, a verification rating is done, and if you have improved energy efficiency by at least 30% you will receive a rebate based on the calculated energy savings – the Energy Efficiency Premium.

Home energy loan

Through the Louisiana Department of Energy’s Home Energy Loan Program (HELP) you can obtain a 5-year, low-interest loan to finance the cost of making energy efficiency improvements including appliances, dehumidifiers, ceiling fans, water heaters, air conditioners, furnaces, boilers, heat pumps, programmable thermostats, building insulation, and windows. The Louisiana Department of Energy finances 50% of the cost at 2% interest to the lending institution, up to a maximum of $6,000.

There are two ways to qualify for the loan. You can have an energy rating done on your home by a qualified home energy rater. The cost of the rating can be financed as part of the loan.

Or you can choose from a list of pre-approved improvements posted on the Louisiana Department of Energy website. You must use one of the participating lenders from the list on the website.

You are going to rely on a tax refund to pay off your loans

One thing that stood out from your post was that you are going to rely on a tax refund to pay off your loans to friends and then next year, pay off your loans to CC’s with your refund.

I know some people like to get a nice big check every spring, but it’s actually the equivalent to allowing the government to have more of your money than is required. Essentially, you are floating them a loan all year long.

From what I’ve read (I am no expert believe me ;-)) and I’m sure others would confirm, is that it would be better for you to have your refund money up front and working for you for 52 weeks out of the year. To get this done, you would adjust your withholding on your W-4.

Now you may thinking…”But, I might owe something at the end of the year.” Well, the IRS website has a tool to calculate the appropriate amount of withholdings you should adjust to so that you are as close to having no refund or charge at the end of the year.

Would anyone else confirm or agree in principle with this plan? I’m sure your friends and the creditors would rather have their money up front rather than after you have saved it up for a year by over paying your taxes.

The problem with this for us is that we get back double of what we pay in. We have lots of child tax deductions ;o) LOL

I do agree with you that we could have our money working for us all year long IF we were diligent enough to do that. My mother is an accountant. I’ve had her figure up all the different ways we could go about this. If we were to get back more through out the year it would only *work* if we put it directly into a savings. My dear husband would never let it get to the savings….he would order a pizza or something with the little extra we would get each week. Also, next time consider this better alternative to payday loans. Yes, I am talking about installment loans.

I know many people do this and I think it’s great. It just is better for us to get a lump sum at one time. Normally we don’t have problems keeping our finances on track and use the tax refund for big things we need. Pay our property taxes, car ins for the year, home owners stuff like that.

Thanks for the advice!