Solar Panels in Louisiana: Costs and Incentives in 2024

The typical cost of a home solar panel system in Louisiana was $37,053 in the second half of 2023 before incentives, according to data from EnergySage, a solar and home energy product comparison marketplace.

Hot, humid summers are common in Louisiana, and air conditioning use can contribute to high electricity bills. Solar panel systems can offset some of these costs. However, compared to many other states, most of Louisiana has a lower payback rate for electricity sold back to the grid, which decreases long-term savings and can make solar a less cost-effective option.

Louisiana’s average cost per watt for residential solar panels is $3.10. This was slightly higher than the national average of $2.96 in the second half of 2023. Solar panel systems are slightly larger than average in Louisiana at 12kW compared to the national average of 11.6kW.

In some states, you might be required to pay for infrastructure upgrades your utility company deems necessary for activating your system. This happens more in rural zones where grid equipment hasn’t been updated in a while. In Louisiana, large interconnection charges for upgrades are rare.

Buying a residential solar system in cash is an option for some. However, many cannot afford solar panels without a loan, and that is reducing demand in Louisiana for solar panel systems. Between the first half and second half of 2023, prices per watt in Louisiana have held steady. But for those taking out loans, interest rates can increase overall costs.

“Interest rates are really high right now, so financing residential solar is challenging, and can eat into some of the savings,” says Rebekah Olinde, a solar consultant for South Coast Solar, a solar installer in Louisiana. “I’ve seen the impact of those interest rates both on savings projections and on decision-making.”

In most parts of Louisiana, there’s no longer one-to-one net metering, a billing system that allows homeowners to sell excess solar generated from solar panels at retail rates, making solar more cost-effective.

“The net metering policy for most of Louisiana changed in 2019. For any system installed after that, excess solar is now exported back to the grid at the avoided-cost rate, instead of at the retail rate,” says Olinde, noting there are some exceptions.

The avoided-cost rate, or wholesale rate, is much lower than the retail rate. The new policy ^[0]

The retail rate and the avoided-cost rate change over time. The Public Service Commission of Louisiana offers a schedule of avoided-cost rates for different energy providers, as of early 2024. These rates are all under 3 cents per kilowatt-hour. The retail cost of electricity is much higher at about 13 cents per kWh, based on EnergySage data.

Like many states, Louisiana does not factor solar panels into the valuation of homes for property tax purposes. ^[0]

Some form of energy storage is a common feature of residential solar panel systems in Louisiana. In areas where full net metering isn’t available, a solar battery can allow homeowners to store and use excess power as needed, reducing their electricity bills. It can also be used as a source of backup power in the case of a power outage. In Louisiana, a typical solar battery costs $13,995 after the federal solar tax credit, according to EnergySage data from the second half of 2023.