Current through Register Vol. 50, No. 9, September 20, 2024
A. Revised Statute 47:6030 provides an income
tax credit for the purchase and installation of a solar electric system, solar
thermal system or any combination of components thereof, collectively referred
to as a "system," at a single family residence located in Louisiana. In order
for costs associated with the purchase and installation of a solar electric
system or solar thermal system to qualify for this credit, the expenditure must
be made on or after January 1, 2008, and before January 1, 2018.
1. Purchase of Solar Energy System. The
amount of the credit for the purchase and installation of a system at a
Louisiana residence or for a system which is already installed in a newly
constructed home located in Louisiana is equal to 50 percent of the first
$25,000 of the cost of a solar electric system, solar thermal system, or any
combination of components thereof
2. Lease of Solar Energy System
a. The amount of the credit for the purchase
and installation of a system before January 1, 2014, at a Louisiana residence
by a third party through a lease with the owner of the residence is equal to 50
percent of the first $25,000 of the cost of a solar electric system, solar
thermal system, or any combination of components thereof
b. The amount of the credit for the purchase
and installation of a system on or after January 1, 2014 and before January 1,
2018, at a Louisiana residence by a third party through a lease with the owner
of the residence is equal to 38 percent of the first $25,000 of the cost of a
solar electric system, solar thermal system, or any combination of components
thereof
3. Additional
Lease of Solar Energy System Restrictions. For purposes of determining the
amount of credit for the purchase and installation of a system at a Louisiana
residence by a third party through a lease with the owner of the residence,
eligible costs of the system shall be subject to the following provisions.
a. For a system purchased and installed on or
after July 1, 2013 and before July 1, 2014, the system shall cost no more than
four dollars and fifty cents per watt and provide for no more than six
kilowatts of energy.
b. For a
system purchased and installed on or after July 1, 2014 and before July 1,
2015, the system shall cost no more than three dollars and fifty cents per watt
and provide no more than six kilowatts of energy.
c. For a system purchased and installed on or
after July 1, 2015 and before January 1, 2018, the system shall cost no more
than two dollars per watt and provide for no more than six kilowatts of
energy.
B.
Definitions
Charge Controller-an apparatus designed to
control the state of charge of a bank of batteries.
Grid-Connected, Net Metering System-a solar
electric system interconnected with the utility grid in which the customer pays
the utility for only the net energy used from the utility minus the energy fed
into the grid by the customer. All interconnections must be in accordance with
the capacity, safety and performance interconnection standards adopted as part
of the appropriate, established net metering rules and procedures of the
Louisiana Public Service Commission, the New Orleans City Council, or other
Louisiana utility regulatory entity.
Home-a single-family detached
dwelling.
Inverter-an apparatus designed to convert
direct current (DC) electrical energy to alternating current (AC) electrical
energy. Modern inverters also perform a variety of safety and power
conditioning functions that allow them to safely interconnect with the
electrical grid.
Manufactured or
Produced-wholly the growth, product, or
manufacture of the United States or a country to which the
United States is a party to an international agreement meeting the criteria of
the American Recovery and Reinvestment Act of 2009 (ARRA) or in the case of a
manufactured good that consists in whole or in part of
materials from a non-ARRA compliant country, has been substantially transformed
in an ARRA-compliant country into a new and different
manufactured good distinct from the materials from which it
was transformed. This definition has been adopted in accordance with
2 CFR §
176.160
Photovoltaic Panel-a panel consisting of a
collection of solar cells capable of producing direct current (DC) electrical
energy when exposed to sunlight.
Placed in Service-fully operational and in a
current state of delivering solar energy to the qualifying residence in a
manner consistent with the intended purpose of the solar energy system.
Residence-a single family detached dwelling.
To be considered a residence, the physical properties of the
space must provide the basic elements of a home, including appropriate and
customary appliances and facilities and the occupant must use the facilities as
a home. All eligible residences must be located in
Louisiana.
Solar Electric System-a system consisting of
photovoltaic panels with the primary purpose of converting sunlight to
electrical energy and all equipment and apparatus necessary to connect, store
and process the electrical energy for connection to and use by an electrical
load.
Solar Thermal System-a system consisting of
a solar energy collector with the primary purpose of converting sunlight to
thermal energy and all devices and apparatus necessary to transfer and store
the collected thermal energy for the purposes of heating water, space heating,
or space cooling.
Supplemental Heating Equipment-a device or
apparatus installed in a solar thermal system that utilizes energy sources
other than sunlight to add heat to the system, with the exception of factory
installed auxiliary heat strips that are an integral component of a
specifically engineered solar hot water storage tank.
C. Eligibility for Solar Energy Systems Tax
Credits
1. Regardless of the number of system
components installed on each qualifying residence, such components shall
constitute a single system for each residence for purposes of the tax
credit.
2. All solar energy systems
must be installed in the immediate vicinity of the residence claiming the
credit such that the electrical, mechanical or thermal energy is delivered
directly to the residence.
3. In
order to claim a tax credit for either a solar electric energy system, solar
thermal energy system, or a combination of components thereof, the components
of a system must be purchased and installed at the same time as a
system.
4. For a taxpayer other
than the owner of the residence to claim a tax credit for a solar electric
energy system, solar thermal energy system, or combination of components
thereof, the taxpayer must provide the department with a copy of the contract
in which the owner of the residence has clearly and unambiguously stated that
he is not entitled to and will not claim the tax credit and thereby transfers
his right to claim the tax credit to the installer, developer or third-party
taxpayer. Absent such a contract, the owner of the residence is the only
taxpayer eligible to claim the credit and the installer, developer or
third-party taxpayer shall have no right to the credit. For an installer,
developer, or third-party taxpayer who purchases a system for installation at
another persons residence in connection with a lease of the system by the owner
of the residence, the transfer of the right to obtain the credit from the
homeowner to the installer, developer or third-party taxpayer shall be regarded
as taxable consideration received in exchange for the homeowners right to use
or possess the solar energy system. In such instances, the installer, developer
or third-party taxpayer shall be responsible for collecting and remitting the
sales tax on the full amount of the credit received.
D. Claiming the Solar Energy Systems Tax
Credit
1. The credit for the purchase and
installation of a solar energy system by a taxpayer at his residence shall be
claimed by the taxpayer on his Louisiana individual income tax return for the
taxable year in which the system is completed and placed in service. If a
taxpayer purchases a newly constructed home with a system already installed,
the credit shall be claimed on the tax return for the taxable year in which the
act of sale occurred.
2. The credit
for the purchase and installation of a solar energy system by a third-party
taxpayer at another persons residence through a lease with the owner of the
residence shall be claimed by the taxpayer on his Louisiana individual,
corporate or fiduciary income tax return for the taxable year in which the
system is completed and placed in service.
E. Solar Energy Systems Eligible for the Tax
Credit
1. The credit provided by
R.S.
47:6030 is only allowed for a complete and
functioning solar energy system. Local and state sales and use taxes are an
eligible system cost. With respect to each residence, only one tax credit for
the purchase and installation of a single system shall be allowed. Any
additional system(s) or equipment added at a later date will not qualify for
additional credit. This provision also applies to residences which have claimed
a solar tax credit prior to July 1, 2013 and shall in no way be construed or
interpreted to allow more than one tax credit for any residence.
2. System components purchased on or after
July 1, 2013, for all solar electric or solar thermal energy systems must be
compliant with the federal American Recovery and Reinvestment Act of 2009. This
requirement applies to all credit-eligible components as described below in
Subsection E. Components which are manufactured or produced in the United
States or in a country with which the United States is a party to an
international agreement meeting the criteria of ARRA will generally be regarded
as ARRA compliant. For additional information, see Revenue Information
Bulletin 13-013.
3.
Non-ARRA compliant system components purchased prior to July 1, 2013, may
qualify for credit provided that:
a. such
system components are incorporated into a system that is placed in service
prior to January 1, 2014; and
b.
the purchaser provides written documentation of the pre-July 1, 2013 date of
purchase of the eligible components.
4. Solar Electric Systems. Eligible solar
electric systems under the provisions of
R.S.
47:6030 include grid-connected net metering
systems, grid-connected net metering systems with battery backup, stand alone
alternating current (AC) systems and stand alone direct current (DC) systems,
designed to produce electrical energy and may include the following.
|
System Type
|
Eligible System Components
|
|
Grid-Connected, Net Metering Solar Electric
Systems
|
photovoltaic panels, mounting systems, inverters, AC
and DC disconnects, lightning and ground fault protection, junction boxes,
remote metering display devices and related electrical wiring materials from
the photovoltaic panels to point of interconnection with the residence or
electrical load
|
|
Grid-Connected, Net Metering Solar Electric Systems
with Battery Backup
|
photovoltaic panels, mounting systems, inverters,
charge controllers, batteries, battery cases, AC and DC disconnects, lightning
and ground fault protection, junction boxes, remote metering display devices
and related electrical wiring materials from the photovoltaic panels to point
of interconnection with the residence or electrical load
|
|
Stand Alone Solar Electric AC Systems
|
photovoltaic panels, mounting systems, inverters,
charge controllers, batteries, battery cases, AC and DC disconnects, lightning
and ground fault protection, junction boxes, remote metering display devices
and related electrical wiring materials from the photovoltaic panels to point
of interconnection with the residence or electrical load
|
|
Stand Alone Solar Electric DC Systems
|
photovoltaic panels, mounting systems, charge
controllers, batteries, battery cases, DC disconnects, lightning and ground
fault protection, junction boxes, remote metering display devices and related
electrical wiring materials from the photovoltaic panels to point of
interconnection with the residence or electrical load
|
5.
Solar Thermal Systems. Solar thermal systems eligible under the provisions of
R.S.
47:6030 include systems designed to produce
domestic hot water, systems designed to produce thermal energy for use in
heating and cooling systems and may include the following.
|
System Type
|
Eligible System Components
|
|
Domestic Solar Hot Water Systems
|
solar thermal collectors, mounting systems, solar hot
water storage tanks, pumps, heat exchangers, drain back tanks, expansion tanks,
controllers, sensors, valves, freeze protection devices, air elimination
devices, photovoltaic panels for PV systems, piping and other related materials
from the solar thermal collectors to the solar hot water storage tanks
|
|
Heating and Cooling Thermal Energy Systems
|
solar thermal collectors, mounting systems, solar hot
water storage tanks, pumps, heat exchangers, drain back tanks, expansion tanks,
controllers, sensors, valves, freeze protection devices, air elimination
devices, photovoltaic panels for PV systems, piping and other related materials
from the solar thermal collectors to the solar hot water storage tanks
|
6.
Solar energy systems not installed on the rooftop of the residence but
installed on the qualifying property shall constitute a free standing ground
mounted system. Ground mounted solar energy systems include but are not limited
to single pole mounted structures, multiple pole mounted structures utilizing a
foundation if necessary. Additional walls, interior finishes, foundations,
roofing structures not directly related to the solar energy system, or any
other addition not directly related to the solar energy structure are not
eligible system costs. Ground mounted systems must be no more than 8 feet in
height at its lowest point if titled unless specific building codes and/or
flood plain restrictions apply. Each qualifying free standing ground mounted
system must be separately itemized from any and all other energy components
included in a taxpayers submitted Form R-1086.
NOTE: Form R-1086 is used for purposes of claiming the Solar
Energy Systems Tax Credit.
7. Any solar energy system for which a tax
credit is claimed shall include an operations and maintenance manual containing
a working diagram of the system, explanations of the operations and functions
of the component parts of the system and general maintenance
procedures.
8. All photovoltaic
panels, inverters and other electrical apparatus claiming the tax credit must
be tested and certified by a Federal Occupational Safety and Health
Administration (OSHA) nationally recognized testing laboratory and must be
installed in compliance with manufacturer specifications and all applicable
building and electrical codes.
9.
All photovoltaic systems installed at a tilt angle greater than 5 degrees shall
have an azimuth greater than 80 degrees E and no more than 280 degrees W. North
facing solar panels generally do not conform to industry best practices unless
criteria above are satisfied.
10.
All solar thermal apparatus claiming the tax credit must be certified by the
Solar Rating and Certification Corporation (SRCC) and installed in compliance
with manufacturer specifications and all applicable building and plumbing
codes.
11. Applicants applying for
the tax credit on either a solar electric or solar thermal system must provide
proof of purchase and installation to the Louisiana Department of Revenue
detailing the following as applicable to your particular solar energy system
installation:
a. type of system applying for
the tax credit;
b. output capacity
of the system:
i. solar electric systems-total
nameplate listed kW of all installed panels;
ii. solar thermal systems-listed SRCC annual
BTU or equivalent kWh output;
c. physical address where the system is
installed in the state;
d. total
cost of the system as applied towards the tax credit separated in an itemized
list by:
i. equipment costs;
ii. installation costs;
iii. taxes;
e. make, model, and serial number of
photovoltaic panels, inverters, and solar thermal collectors applied for in the
tax credit;
f. name and Louisiana
contractors license number of seller/installer;
g. if applicable, copy of the modeled array
output report using the PV watts solar system performance calculator developed
by the National Renewable Energy Laboratory and available at the website
www.nrel.gov/rredc/pvwatts. The
analysis must be performed using the default PV watts de-rate factor;
h. copy of a solar site shading analysis
conducted on the installation site using a recognized industry site assessment
tool such as a solar pathfinder or solmetric demonstrating the suitability of
the site for installation of a solar energy system;
i. conveyance certificate, deed or other
legal document which evidences the owner of the residence.
j. when a system is installed by a
third-party owner, a complete and signed declaration by residential property
owner not claiming the solar energy income tax credit;
k. for a system already installed in a newly
constructed home located in Louisiana, a copy of the sale agreement or other
legal document which evidences the date of sale;
l. for a system other than one which is
already installed in a newly constructed home located in Louisiana, a copy of
the interconnection agreement for net metering or other document which
evidences the effective placed in service date;
m. if applicable, an itemized list of all
non-ARRA compliant components incorporated into the system which demonstrates a
pre-July 1, 2013 purchase date. Additional documentation, such as an invoice,
receipt, or other written documentation demonstrating the date of purchase of
such components should be retained and made available for production by the
taxpayer upon demand by the Department of Revenue;
n. For all components purchased on or after
July 1, 2013, documentation which demonstrates ARRA compliance, such as a
receipt, invoice, certification from the distributor, vendor, supplier or
manufacturer or any other reasonable documentation which verifies the component
was manufactured or produced in the United States or other qualifying
country.
F.
Costs
1. Eligible Costs. Eligible costs that
can be included under the tax credit are reasonable and prudent costs for
equipment and installation of the solar energy systems defined in Subsection B
and described in Subsection E above.
a. All
eligible solar energy systems must be sold and installed by a contractor duly
licensed by and in good standing with the Louisiana Contractors Licensing
Board. For purposes of satisfying the requirement that a solar energy system be
sold by and installed by a person who is licensed by the Louisiana State
Licensing Board for Contractors, a lease between a third party and the owner of
the residence shall not constitute a "sale."
b. In order for a homeowner who self-installs
a solar energy system at the homeowners own residence to qualify for the solar
energy systems tax credit, the homeowner must be licensed by the Louisiana
State Board for Contractors.
2. Ineligible Costs. Labor costs for
individuals performing their own installations are not eligible for inclusion
under the tax credit. For purposes of this Paragraph, "individuals" shall mean
natural persons as defined in Civil Code article 24. For all
other taxpayers, labor costs for unrelated services, including, but not limited
to tree trimming and tree removal, are not eligible under the tax credit.
Supplemental heating and cooling (HVAC) equipment costs used with solar
collectors are not eligible for inclusion under the tax credit. Other items
ineligible for a solar energy systems tax credit include, but are not limited
to the following: stand alone solar powered attic fans or ventilation systems,
solar powered lights, solar day lighting apparatuses, solar powered pool pumps,
solar pool heating systems, and all other stand-alone solar
device(s).
3. Whenever, in return
for the purchase price or as an inducement to make a purchase, marketing
rebates or incentives are offered, the eligible cost shall be reduced by the
fair market value of the marketing rebate or incentive received. Such marketing
rebates or incentives include, but are not limited to, cash rebates, prizes,
gift certificates, trips, energy efficiency improvements not directed related
to solar energy installation, including, but not limited to spray foam
insulation, radiant barrier, window sealing and/or caulking, heating and air
conditioning improvements, blower door testing, thermostat upgrades which are
not an integral part of the solar energy monitoring system, domestic hot system
upgrades not related to solar hot water system insulation, or any other thing
of value given by the installer or manufacturer to the customer as an
inducement to purchase an eligible solar energy system.
4. Only one solar energy systems tax credit
is available for each residence. In addition, in the event of purchase and
installation by a third-party taxpayer through a lease with the owner of the
residence, only one solar energy systems tax credit is available for each
eligible system. Once a solar energy systems tax credit is claimed by a
taxpayer for a particular residence or system, that same residence or system is
not eligible for any other tax credit pursuant to this Section. If the
residential property or system is sold, the taxpayer who claimed the tax credit
must disclose his use of the tax credit to the purchaser.
G. Other Tax Benefits Disallowed
1. A taxpayer shall not receive any other
state tax credit, exemption, exclusion, deduction, or any other tax benefit for
solar property for which the taxpayer has received a solar electric energy
system or solar thermal energy system credit under
R.S.
47:6030.
2. Exception. The credit may be used in
addition to any federal tax credits earned for the same system.
AUTHORITY NOTE:
Promulgated in accordance with
R.S.
47:6030 and
R.S.
47:1511.
