Here Comes the Sun: Tax incentives entice residential and commercial sectors to go solar

In 1966 four lads from Liverpool, also known as the Beatles, sat down to record their culturally loaded seventh album, Revolver, which opens with a track titled “Taxman.” As George Harrison so eloquently remarks, “If you get too cold, I'll tax the heat. If you take a walk, I'll tax your feet.” But much has changed since 1966 including the way we think about, produce, use and even tax energy.

The Emergency Economic Stabilization Act of 2008, otherwise referred to as the bailout of the U.S. financial system, recently extended the investment tax credit that gives homeowners and commercial businesses 30% off solar systems through the year 2016. The same legislation, specifically titled the Energy Improvement and Extension Act, also eliminated the $2,000 cap previously placed on the purchase and installation of residential solar systems and designated $18 billion in incentives for clean and renewable energy technologies, as well as for energy efficiency improvements. In addition, Louisiana residents are eligible for a 50% tax credit up to $25,000 when they purchase solar systems. This means that the state will pay up to $12,500 for each solar system installed; however, there is no maximum on how many solar systems may be needed to reach a net zero energy usage. The local tax credit has no expiration date, and unlike the federal tax credit which is applicable only for solar hot water and solar electric, the local credit covers solar hot water, solar electric, solar pool heaters, and wind and geothermal systems. A quick look at the math reveals a stunning 80% effective savings just by sourcing power from the sun.

Yet there still seems to be a misconception that oil is easier and solar power is cost prohibitive. The Louisiana Solar Energy Society specifically addresses the issue of cost by explaining that “solar costs about as much as a car. Period. You can buy parts of a car for $200 or a new luxury model for $40,000.” In other words, an investment in solar systems can accommodate any size budget. Solar systems can also grow incrementally as the usage requirements increase. Smaller systems that produce 180 watts of power, enough to illuminate four 60-watt fluorescent bulbs for three hours, only require either three 60-watt panels or two 90-watt panels with exposure to the sun for one hour each day. Since Louisiana averages about five hours of sunlight per day, careful placement of solar panels can yield up to 900 watts per day. That means you can power twenty 60-watt fluorescent bulbs for three hours or, better yet, a combination of light bulbs, a computer, and a 20” television for four hours each day.

Once your solar needs have been accessed, the next step is to calculate the cost. The solar industry will often talk about cost in terms of dollars per watt. Solar industry market reports suggest a range of price between $3.50 and $10.00 per watt, with $9.00 being the assumed average. If the math is still not registering, there are numerous online solar calculators that use a step-by-step process to determine an estimated total investment for solar system purchases.

The bottom line is that solar power is an abundant natural resource that we can begin utilizing today to make a difference for tomorrow. And with an effective 80% tax credit now available to Louisiana residents, there is no better time to learn exactly how solar can work for you. As the saying goes, you don’t have to be a rocket scientist to figure it out, at least, not anymore. ✦

Shedding the light on solar power: