Tax Credit for Solar Energy Systems on Residential Property (Personal)

March 01, 2018

Summary

NOTE: This credit has expired. Prior to its expiration, by March 2016 all $25 million of credits were granted to taxpayers, meeting the entire budget cap for the life of the credit. Qualifying taxpayers who were unable to claim the credit due to the cap, and who installed their systems on or before December 31, 2015, were given an opportunity to the claim the credit through H.B. 187 of 2017.

Louisiana provides a tax credit for solar photovoltaic (PV) systems purchased and installed on or after January 1, 2008 and before January 1, 2018. The credit may be applied to personal, corporate or franchise taxes, depending on the entity which purchases and installs the system, but the system must be installed at a single-family residence to be eligible (systems installed at residential rental apartments were made ineligible by HB 705 of 2013). Only one credit may be taken per system, so if the property is sold, the taxpayer who originally claimed the credit must disclose this, as the new owner will not be eligible for another tax credit on the same system. Each residence is limited to just one credit. A second system installed at the same residence is ineligible for a credit. The tax credit can be applied only for solar photovoltaic (PV) systems. Effective June 19 2015, solar-thermal systems are ineligible for the tax credit.

Customer Owned Systems

For systems purchased between January 1, 2014 and July 1, 2015, the credit is equal to 50% of the first $25,000 of the cost of each system, including installation costs. Any systems purchased or installed after July 1, 2015 and before January 1, 2018 will equal the lesser of $2 per watt (DC), 50% of the cost, or $10,000.

The credit must be fully claimed in the taxable year in which the system is installed and placed in service. Equipment added at a later date cannot utilize any existing system components in order to qualify for the tax credit. Any excess credit which exceeds the taxpayer's liabilities for that year shall be treated as an overpayment, and the DOR will issue a refund for the remaining amount within one year of receiving the claim.

For photovoltaic (PV) systems, the tax credit applies to AC or DC generation systems which are grid-connected, net-metered systems (with or without battery backup) and stand-alone systems.

Electrical equipment must be tested and certified by a Federal Occupational Safety and Health Administration (OSHA) nationally recognized testing laboratory and installed in compliance with all applicable building and electrical codes.

This 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 additional incentive received.

Leased Systems

Systems leased by a third party and used at a residence can qualify for a tax credit, but there are additional provisions in the law that apply to these systems. For leased systems that are installed before January 1, 2014, the value of the credit will be reduced to 38% of the first $25,000 of the cost of each system. Systems installed after January 1, 2014 and before January 1, 2018, will receive credit of $38% of the first $20,000 of the cost of the system.

Additionally, leased systems can be no larger than 6 kilowatts (kW). The law also sets maximum system costs for leased systems. A leased system can claim system costs that do not exceed these limits depending on the year it is placed in service:

• Placed in service between 7/1/13 - 6/30/14: $4.50 per watt with $12,500 limit

• Placed in service between 7/1/14 - 6/30/15: $3.50 per watt with $9,500 limit

• Placed in service between 7/1/15 - 12/31/17: $2.00 per watt with $4,560 limit

HB 779 (Act 131) passed in 2015 adds a $10 million annual cap for all credits in FY 2016 and FY 2017. For FY 2018, the cap is reduced to $5 million. Credits will be granted on a first-come, first-served basis. If the total amount of credits applied for in a fiscal year exceeds the annual cap for that year, excess credits will be treated as having been applied for on the first day of the subsequent year.

Program Overview

Implementing Sector:	State
Category:	Financial Incentive
State:	Louisiana
Incentive Type:	Personal Tax Credit
Web Site:	http://www.revenue.louisiana.gov/
Administrator:	Louisiana Department of Revenue
Start Date:	01/01/2008
Eligible Renewable/Other Technologies:	Solar Photovoltaics
Incentive Amount:	Customer owned systems Systems purchased and installed after January 1, 2008 and before July 1, 2015: - 50% of the first $25,000 of the cost Systems purchased and installed on or after July 1, 2015 before January 1, 2018, will be the lesser of: - $2 per Watt (DC) - 50% of the cost of purchase and installation - $10,000 Leased systems Systems installed before January 1, 2014 - 50% of the first $25,000 of the purchase of the system Systems installed after January 1, 2014 and before January 1, 2018 - 38% of the first $20,000 of the cost of purchase
Maximum Incentive:	$10,000 per installed system (Customer owned) $7,600 (leased) 1 installed system per residence,
Eligible System Size:	Leased systems: 6 kW maximum Installer financing of the system is prohibited System should serve electrical needs of homeowners primary residence.
Equipment Requirements:	Electrical equipment must be UL-listed. Solar-thermal equipment must be SRCC-certified. All systems must be compliant with the requirements of the federal American Recovery and Reinvestment Act (ARRA)
Installation Requirements:	Systems must be sold by and installed by a person who is licensed by the Louisiana State Licensing Board for Contractors
Carryover Provisions:	Excess credit is refundable

Incentives

This program has 1 incentives

Technologies:	Solar Photovoltaics
Sectors:	Residential
Parameters:	The incentive has a minimum of 50.00 % of cost, The incentive has a minimum of $10000.00, The incentive is 2.00 $/W-DC

Authorities

Name:	La. R.S. 47:6030
Date Enacted:	7/10/2007
Effective Date:	1/1/2008
Expiration Date:	12/31/2017

Name:	LAC 61:I.1907
Effective Date:	1/1/2008

Name:	HB 705
Date Enacted:	06/21/2013
Effective Date:	07/01/2013
Expiration Date:	12/31/2017

Name:	Louisiana Department of Revenue Information Bulletin No. 13-026
Effective Date:	09/24/2013

Name:	Act 131
Date Enacted:	06/19/2015
Effective Date:	06/19/2015
Expiration Date:	01/01/2018

Contact

Name:	Public Information
Organization:	LA Department of Revenue
Address:	PO Box 201 Baton Rouge LA 70821-0201
Phone:	(855) 307-3893

This information is sourced from DSIRE; the most comprehensive source of information on incentives and policies that support renewables and energy efficiency in the United States. Established in 1995, DSIRE is operated by the N.C. Clean Energy Technology Center at N.C. State University.