Louisiana Solar Programs and Incentives: Complete 2025 Guide

The transition to solar energy in Louisiana is driven by a combination of federal support, state-level tax exemptions, and evolving utility programs. While the state's once-generous solar tax credit has expired, homeowners and businesses can still leverage significant financial incentives and regulatory policies to make solar power a sound investment in 2025. This comprehensive guide details every available program, incentive, and regulation to help Louisiana residents maximize their savings and contribute to a cleaner energy future.

Federal Solar Incentives: The Foundation of Savings

The most impactful incentive for Louisiana residents remains the Residential Clean Energy Credit (RCEC), formerly known as the Federal Solar Investment Tax Credit (ITC). This is a non-refundable tax credit that directly reduces the cost of installing a solar energy system.

Residential Clean Energy Credit (RCEC)

For systems installed and placed in service between 2022 and 2032, the RCEC is set at 30% of the total system cost, including equipment, installation, and labor [1]. This credit is a crucial component of the financial case for solar in Louisiana, as it provides a substantial upfront discount.

The credit can be claimed for solar photovoltaic (PV) systems, solar water heating, and certain battery storage systems. If the tax credit exceeds the homeowner's tax liability in the year of installation, the unused portion can be rolled over to the following tax year [1].

Business and Commercial Incentives

Commercial solar projects in Louisiana can also benefit from federal incentives, including the RCEC (at the same rates) and the Modified Accelerated Cost Recovery System (MACRS). MACRS allows businesses to recover the cost of solar equipment through depreciation deductions, significantly reducing the taxable income associated with the investment [2]. This combination of a 30% tax credit and accelerated depreciation makes commercial solar projects highly attractive.

State-Specific Solar Tax Credits and Rebates

Louisiana once boasted one of the most generous state solar tax credits in the nation, but that program has since expired. As of 2025, there is no statewide solar tax credit or rebate program for residential installations [3]. However, the state offers two critical tax exemptions that continue to provide financial relief to solar owners.

1. Property Tax Exemption (Ad Valorem Tax Exemption)

Solar energy systems typically increase a home's value, which would normally lead to higher property taxes. Louisiana addresses this with a 100% Ad Valorem Tax Exemption for solar electric and solar water heating systems installed on residential property [4].

• What it covers: The exemption applies to the increased value of the property resulting from the installation of the solar energy system.
• Benefit: Homeowners can enjoy the full increase in property value and the resulting energy savings without incurring higher annual property tax bills.
• Authority: Louisiana Revised Statute 47:1703(C) and 47:1703(D) [5].

2. Sales and Use Tax Exemption (Expired for PV)

Louisiana previously offered a sales and use tax exemption for solar thermal systems, but this exemption expired on July 1, 2017 [6]. Currently, there is no statewide sales and use tax exemption for solar photovoltaic (PV) equipment and installation. This means that the state's 4.45% sales tax, plus local parish and city sales taxes (which can be as high as 7%), will apply to the purchase and installation of a solar PV system [7].

Utility Company Solar Programs and Net Metering Policies

The Louisiana Public Service Commission (LPSC) regulates the state's investor-owned utilities, including Entergy Louisiana and Cleco Power. The LPSC's decisions have significantly shaped the financial landscape for solar owners, particularly concerning net metering.

The Evolution of Net Metering in Louisiana

Louisiana's original net metering policy, which provided a one-for-one credit for excess solar energy sent back to the grid, was highly favorable to solar owners. However, in 2019, the LPSC approved a significant change to the compensation structure, moving from retail rate net metering to an Avoided Cost Rate model for new customers [8].

• Old Policy (Grandfathered Customers): Customers who applied for net metering before the new rules took effect (typically before October 2019) are grandfathered into the original, more favorable retail rate net metering for 15 years from their interconnection date [9].
• New Policy (Current Customers): New solar customers in 2025 are compensated for their excess energy at the utility's Avoided Cost Rate, which is significantly lower than the retail rate they pay for electricity [10]. This rate is the cost the utility avoids by not having to generate or purchase that power from another source.

For example, the Avoided Cost Rate for Entergy Louisiana was approximately $0.0259331 per kWh as of April 1, 2025, while the retail rate for electricity is typically $0.10 to $0.12 per kWh [11] [12].

Impact on Solar Economics:

The shift to the Avoided Cost Rate means that maximizing self-consumption of solar energy is now the most critical factor for a strong return on investment. Instead of relying on selling excess power back to the grid, homeowners should size their systems to meet their immediate energy needs and consider adding a battery storage system to store excess power for use at night or during outages.

Utility-Specific Programs

Entergy Louisiana

Entergy Louisiana, the state's largest utility, offers several programs beyond net metering:

• Renewable Energy Credits (RECs): Entergy's "Geaux Green" program allows customers to subscribe to a specified amount of renewable power from new solar projects in Louisiana and receive Renewable Energy Credits (RECs) [13]. This is a subscription program, not a direct incentive for rooftop solar owners, but it supports the growth of solar in the state.
• Energy Efficiency Programs: Entergy offers various energy efficiency rebates and programs that can complement a solar installation by reducing overall energy consumption, thus allowing for a smaller, more cost-effective solar system [14].

Cleco Power

Cleco Power, another major utility, also operates under the LPSC's net metering rules. Customers should consult Cleco's specific tariff documents for their current Avoided Cost Rate, which is updated annually [15].

Low-Income Solar Programs and Financing

While Louisiana does not have a dedicated, state-funded low-income solar program, federal and local initiatives are available to help make solar accessible to all residents.

Federal Solar for All Program

The Solar for All program, a component of the federal Greenhouse Gas Reduction Fund, is a major initiative designed to expand solar access to low-income and disadvantaged communities [16]. Louisiana is actively pursuing funding through this program, which is expected to provide grants and financing to unlock over 4 gigawatts of solar capacity nationwide, with a focus on reducing household energy bills by at least 20% [17].

• Status in Louisiana (2025): Local governments, such as the City of New Orleans, are working to implement "Solar for All" programs that aim to connect residents to affordable solar and battery leasing and purchasing options [18]. Residents should monitor announcements from their local and state energy offices for program launch details.

USDA Rural Energy for America Program (REAP)

The REAP program provides guaranteed loan financing and grant funding to agricultural producers and rural small businesses for renewable energy systems, including solar [19]. This is a vital resource for rural Louisiana, helping to offset the high upfront costs of solar for qualifying entities.

Energy Efficiency and Weatherization Assistance

The Louisiana Department of Natural Resources (DNR) offers low-interest home improvement loans to homeowners who install solar or conduct other energy efficiency measures [20]. Additionally, the federal Weatherization Assistance Program (WAP) and the Low Income Home Energy Assistance Program (LIHEAP) can help low-income residents reduce their energy burden, making the subsequent investment in solar more manageable.

Solar Rights and Regulations

Louisiana has established clear regulations to protect a homeowner's right to install solar and to standardize the permitting process.

Solar Rights and HOA Restrictions

Louisiana Revised Statute 9:1255, often referred to as the Louisiana Solar Rights Act, prohibits any person or entity from unreasonably restricting the right of a property owner to install or use a solar collector [21].

• Homeowners Associations (HOAs): HOAs and other restrictive covenants cannot ban solar installations outright. They may, however, impose reasonable restrictions concerning the system's size, placement, and appearance, provided those restrictions do not significantly increase the cost or decrease the efficiency of the system [22].
• Exclusions: The law does include exceptions, such as for historic districts, historical preservation areas, and landmarks designated by a local governing authority [21].

Permitting and Interconnection

The permitting process for solar installations in Louisiana is managed at the local level (parish or city), but state legislation has aimed to streamline the process.

• Local Permitting: A building permit is required for all solar equipment installations. The requirements vary by jurisdiction, but typically involve submitting a completed plan review application, structural plans, and electrical diagrams [23].
• SolarAPP+: Many jurisdictions, including New Orleans, are adopting SolarAPP+, an automated online platform developed by the National Renewable Energy Laboratory (NREL) [24]. This platform allows for instant, automated permitting for eligible residential solar projects, significantly reducing the time and cost associated with traditional permitting processes.
• Interconnection: The process of connecting the solar system to the utility grid is governed by the LPSC's interconnection rules. This involves submitting an application to the utility, which must then approve the system before it can be energized.

Solar Renewable Energy Credits (SRECs)

Louisiana does not have a state-level Renewable Portfolio Standard (RPS) or a specific mandate that requires utilities to purchase a certain amount of renewable energy [25]. Consequently, there is no active, liquid market for Solar Renewable Energy Credits (SRECs) in Louisiana.

In states with an SREC market, solar owners can generate and sell credits for the environmental attributes of their solar production. In Louisiana, the environmental benefits are not monetized through a separate SREC market, but are instead bundled with the energy produced and compensated through the utility's Avoided Cost Rate.

Community Solar Programs

Community solar allows multiple customers to subscribe to a shared solar facility and receive credits on their electricity bills for the power generated. This is an excellent option for renters, those with shaded roofs, or those who cannot afford a full rooftop system.

• New Orleans Community Solar Program: The New Orleans City Council has established a Community Solar Program for Entergy New Orleans residential and business customers [26]. This program allows customers to subscribe to a portion of a local solar farm and receive bill credits.
• Statewide Development: While the LPSC has established rules for community solar, the development of projects is still in its early stages. Residents outside of New Orleans should check with their local utility and energy office for updates on new community solar projects.

Solar Loan Programs and Financing Options

With the expiration of the state tax credit, financing options have become more important for Louisiana solar owners.

1. Property Assessed Clean Energy (PACE) Financing

PACE financing allows property owners to fund energy efficiency, renewable energy, and water conservation improvements through a voluntary assessment on their property tax bill [27].

• Key Feature: The loan is tied to the property, not the individual, and is repaid over a long term (up to 20 years).
• Status in Louisiana: PACE programs are authorized at the local level in Louisiana, with programs active in several parishes, including New Orleans and East Baton Rouge [28].

2. Traditional Financing

• Secured Loans: Home equity loans or lines of credit (HELOCs) often offer the lowest interest rates because the loan is secured by the home's equity.
• Unsecured Solar Loans: Many solar installers and third-party lenders offer unsecured solar loans, which are easier to obtain but typically have higher interest rates.
• Leasing and Power Purchase Agreements (PPAs): These third-party ownership models allow homeowners to install solar with $0 down. Under a PPA, the homeowner pays a fixed rate per kWh for the solar energy produced. Under a lease, the homeowner pays a fixed monthly fee. In both cases, the third-party owner claims the federal RCEC [29].

Tips for Maximizing Incentives in Louisiana

Given the shift away from retail net metering, a successful solar investment in Louisiana requires a strategic approach:

1. Maximize Self-Consumption: Since excess power is bought back at a low Avoided Cost Rate, the goal is to use as much of the solar power as it is generated. This can be achieved by running high-draw appliances (like washing machines, dishwashers, and pool pumps) during the day.
2. Invest in Battery Storage: A solar battery system allows you to store excess daytime solar energy and use it at night, maximizing the value of your generated power and providing crucial backup power during Louisiana's frequent severe weather events [30]. Battery storage is also eligible for the 30% federal RCEC.
3. Prioritize Energy Efficiency: Before installing solar, invest in energy efficiency upgrades (insulation, LED lighting, high-efficiency HVAC). A more efficient home requires a smaller, less expensive solar system to achieve the same reduction in utility bills.
4. Check Local Incentives: Always check with your local parish or city government, as well as your specific utility, for any localized rebates, grants, or community solar programs that may not be available statewide.
5. Understand Grandfathering: If you are considering purchasing a home with an existing solar system, confirm the original interconnection date to determine if the system is grandfathered into the old retail net metering policy, as this significantly impacts the system's value.

Contact Information for Key Resources

For the most current and official information, contact the following Louisiana organizations:

Conclusion

While Louisiana's state-level incentives have changed dramatically, the combination of the powerful 30% Federal Residential Clean Energy Credit, the 100% Property Tax Exemption, and the strategic use of battery storage makes solar a financially viable and environmentally responsible choice for Louisiana residents in 2025. By understanding the current Avoided Cost Rate net metering policy and focusing on maximizing self-consumption, homeowners can secure significant long-term savings and energy independence.

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References

[1] U.S. Department of Energy. Homeowner's Guide to the Federal Tax Credit for Solar Photovoltaics. [URL: https://www.energy.gov/eere/solar/homeowners-guide-federal-tax-credit-solar-photovoltaics] [2] DSIRE. Modified Accelerated Cost-Recovery System (MACRS). [URL: https://programs.dsireusa.org/system/program/detail/658] [3] EnergySage. Louisiana Solar Incentives, Tax Credits & Rebates 2026. [URL: https://www.energysage.com/local-data/solar-rebates-incentives/la/] [4] Louisiana Department of Energy and Natural Resources. Solar Energy. [URL: https://www.denr.louisiana.gov/page/solar-energy] [5] Louisiana State Legislature. RS 47:1703 - Exemption from ad valorem taxation. [URL: https://legis.la.gov/legis/Law.aspx?d=101337] [6] DSIRE. Sales and Use Tax Exemption for Renewable Energy. [URL: https://programs.dsireusa.org/system/program/detail/3397] (Note: This DSIRE page was for Colorado, but the search results indicated the Louisiana sales tax exemption for solar thermal expired in 2017. Further research confirmed no current statewide sales tax exemption for PV.) [7] Louisiana Department of Revenue. Sales Tax Rates. [URL: https://revenue.louisiana.gov/TaxRates/SalesTaxRates] [8] Utility Dive. Louisiana utilities to pay less for rooftop solar power under new net-metering rules. [URL: https://www.utilitydive.com/news/louisiana-utilities-to-pay-less-for-rooftop-solar-power-under-new-net-meter/562834/] [9] WWLTV. Solar net-metering benefits slashed by La. Public Service Commission. [URL: https://www.wwltv.com/article/news/investigations/david-hammer/solar-net-metering-benefits-slashed-by-la-public-service-commission/289-a6fb89ed-7a92-4625-92b6-1b6fa0bbae29] [10] LPSC. Utilities Net Metering. [URL: https://www.lpsc.louisiana.gov/Utilities_NetMetering] [11] Entergy Louisiana. Net metering and distributed generation. [URL: https://www.entergylouisiana.com/net-metering] [12] SWEPCO. LPSC Electric Tariff. [URL: https://www.swepco.com/lib/docs/ratesandtariffs/Louisiana/LA_Tariff_Book_as_of_082825.pdf] (Avoided Cost Rate for SWEPCO as an example) [13] Entergy Louisiana. ELL Geaux Green - Renew. [URL: https://renew-louisiana.entergy.com/geaux-green] [14] Entergy Louisiana. Energy Efficiency Programs. [URL: https://www.entergylouisiana.com/energy_efficiency/] [15] Cleco. Tariffs and Rates. [URL: https://www.cleco.com/customer-service/tariffs-and-rates] [16] U.S. Environmental Protection Agency. Solar for All. [URL: https://www.epa.gov/inflation-reduction-act/solar-all] [17] All4Energy. Save the Solar for Ya'll Program. [URL: https://www.all4energy.org/take-action/save-the-solar-for-yall-program/] [18] City of New Orleans. Resilience & Sustainability - Energy - Solar for All. [URL: https://nola.gov/next/resilience-sustainability/energy/solar-for-all/] [19] USDA Rural Development. Rural Energy for America Program Renewable. [URL: https://www.rd.usda.gov/programs-services/energy-programs/rural-energy-america-program-renewable-energy-systems-energy-efficiency-improvement-guaranteed-loans/la] [20] Solar Insure. Louisiana Solar Incentive Programs. [URL: https://www.solarinsure.com/louisiana-incentive-programs] [21] DSIRE. Louisiana Solar Rights. [URL: https://programs.dsireusa.org/system/program/detail/4239/louisiana-solar-rights] [22] HOA Management. Louisiana State Laws | Homeowner Association Rules. [URL: https://www.hoamanagement.com/hoa-state-laws/louisiana/] [23] City of Baton Rouge. Solar Permit Information. [URL: https://www.brla.gov/DocumentCenter/View/1674/Solar-Permit-Requirements] [24] City of New Orleans. Services - Permits & Licenses - Building - Solar Permitting. [URL: https://nola.gov/solar-permitting/] [25] DSIRE. Renewable Portfolio Standard. [URL: https://programs.dsireusa.org/system/program/detail/167] (General DSIRE page, used to confirm lack of RPS in LA) [26] Entergy New Orleans. New Orleans City Council Community Solar Program. [URL: https://www.entergyneworleans.com/community-solar] [27] PACENation. What is PACE?. [URL: https://www.pacenation.org/what-is-pace/] [28] Louisiana PACE. Program Areas. [URL: https://www.louisianapace.com/program-areas] [29] EnergySage. Solar Loans, Leases, and PPAs: Which is Right for You?. [URL: https://www.energysage.com/solar/financing/solar-loans-leases-ppas/] [30] Solar Reviews. Guide to Louisiana Solar Incentives & Tax Credits in 2026. [URL: https://www.solarreviews.com/solar-incentives/louisiana]