Louisiana residents enjoy the highest state tax credit in the country for the purchase and installation of solar hot water, solar electric, solar pool heaters, wind generators, and wind energy systems. The amount of the credit is equal to 50% of the first $25,000 of the cost of each system. This includes installation costs (unless the taxpayer is installing the system). You can put as many systems on one home until 100% of your home’s energy comes from solar, and still receive the state tax credit on each system. This of course, is only for residential homes and apartment buildings.
The state tax credit may be combined with any federal tax incentive, but it may not be combined with any other state tax incentive. Whenever additional incentives such as cash rebates, prizes or gift certificates are offered in addition to the tax credit, the eligible cost must be reduced by the value of the incentive received.
There is also a 30% Federal tax credit incentive for installing these alternative energy systems. That’s 80% combined tax credits for Louisiana residents interested in investing in clean energy. Even with these incredible savings, most homeowners still can’t afford alternative energy systems.
In July 2009, the law was extended to allow for solar leasing. Basically, the tax credit can go to another person or business that purchases the system rather than property owner. Then, the person who owns the system rents it to the property owner. This law helps low income folks afford a clean energy system.
The tax credit may be applied both to solar-electric systems (photovoltaic systems) and solar-thermal systems, when the energy is used for space heating, space cooling or water heating. Solar thermal systems must be used for the primary purpose of heating water (including pool heating), space heating or space cooling. The credit must be fully claimed in the taxable year in which the system is installed and placed in service. Any excess credit which exceeds the taxpayer’s liabilities for that year shall be treated as an overpayment, and the Louisiana Department of Revenue will issue a refund for the remaining amount within one year of receiving the claim.