Factors such as system size, equipment, and local incentives and rebates can impact your total cost when going solar.
If you are interested in learning more about solar system costs, you can use our solar calculator to determine pricing in your area.
Solar System Size
The primary factor that determines solar installation costs is system size, which depends on your energy needs. The more energy you use, the bigger the solar system you will need to cover your consumption.
A home solar system with a higher energy output requires more solar panels, which requires more racking equipment, wires and a larger inverter. As a result, prices increase the more material and labor you require. Adding other equipment can also increase your price — a solar battery can add more than $10,000 to your final system cost.
Financing Options
How you pay for your system can also influence costs, regardless of the size. You can save the most money over time by purchasing a system in cash or with a solar loan. Keep in mind that you will have to pay an interest rate on a loan, which will add to your overall cost.
If you are looking to avoid upfront costs, you may opt for a solar lease or power purchase agreement (PPA). However, these financing options result in the least amount of savings over time since you will never own the solar system and cannot claim certain incentives.
Solar Panel Type
Solar customers choose between three types of solar panels:
- Monocrystalline solar panels are the most common type of solar panel, featuring the highest efficiency ratings and cost.
- Polycrystalline panels have intermediate efficiency and a lower cost than monocrystalline options.
- Thin-film panels have low to moderate cost and efficiency.
The brand of solar panel you select can also influence cost. While some companies charge more than others, you can opt for cheaper solar panels to save money.
However, solar panels only represent around 18% of system costs in residential applications, according to a study by the National Renewable Energy Laboratory (NREL). Although your solar panel selection affects total system costs, it’s not the biggest price factor. We recommend speaking with a solar installer to determine which type of solar panel is best for your home.
Solar Tax Credits and Tax Exemptions
Louisiana residents who install solar panels may qualify for tax incentives, depending on where they live in the state. Common solar incentives include:
- Tax credits you can claim after purchasing solar equipment to lower your state or federal income tax burden.
- A tax exemption, whether in the form of sales or property taxes, on products and services related to renewable energy systems.
- Cash rebates that are provided by your utility company or other organization for installing solar.
The Investment Tax Credit (ITC) is a nationwide incentive that allows you to claim 30% of your solar system cost on your tax filing after purchasing panels. You can use the credit to decrease what you owe in federal taxes for that year and roll over any remaining amount for up to five years.
Depending on where you live, other Louisiana solar incentives may be available. For example, the state offers a property tax exemption for homeowners who install solar panels. You can check with your solar installer to see if you are eligible for other state or local incentives.
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