Business and property owners stand to receive a wealth of benefit beyond just the generation of clean energy for their facility. State and Federal Tax Credits, advanced depreciation, PR value, and the future potential for REC income all factor into decision-making for commercial projects.
Louisiana Residential Property owners have the most to gain from the current incentive structure at this time, with a potential for 80% or more in system costs covered by State and Federal Investment Tax Credits. See the Federal Energy Credit and Louisiana Solar and Wind Energy Credit below for more information, and contact an advisor to discuss options for your facility.
The Energy Investment Credit for Renewable Energy property provides a 30% convertible credit for Solar Electric and Solar Water Heat installations. Systems involving swimming pools are not eligible. This credit can be converted from a tax credit to treasury grant through an application process, reducing the wait time for reimbursement substantially. Contact staff for more information.
The New Market Tax Credit program provides funding for investment in certain underserved areas. This credit is equal to 39% (30% Net Present Value) of a project’s costs, and is delivered over a seven-year period. See the Department of Treasury’s NMTC page for more information.
The IRS allows advanced depreciation for qualified Solar Energy systems, including Solar Electric and Solar Water Heat installations. Certain Solar and Geothermal systems are considered 5-year property for MACRS depreciation purposes, allowing a substantial deduction for the first five years after project installation. See IRS Form 4562 and instructions.
A Production Tax Credit is available for Solar and Renewable Energy installations, and may be preferable to the Investment Credit above. Only one of these credits can be claimed for a system, and the financial benefits vary depending on application. See form 8835 for more information. This credit is also convertible.
Other credits are also available for specific applications, including homebuilding and agricultural applications. The DSIRE database is a good reference for current incentives and status.
Louisiana currently has one of the nation’s best incentive programs for Solar Energy investment on residential property. Any commercially owned residential property is eligible to receive the credit of 50% of installed system costs for any Solar Water Heat, Solar Electric, or Solar Pool Heat system. There is effectively no cap to the credit, since the $12,500 cap is per-system, with an unlimited number of systems and shared components allowed per property.
Solar Energy Systems installed on Louisiana residential property, regardless of ownership, is exempt from state and local property tax assessment, providing additional savings from the investment. See theFiles page for documentation related to these credits.
