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Federal and State Tax Credit

Federal Tax Credit:

-In effect, will expire December 2008

-For homes and commercial businesses, it covers solar hot water, and solar electric.  Does not cover solar pool heaters.

-For homes you get 30% back with a cap of $2,000.  For commercial you get 30% back with no limit.

-(Effect of Rebates, Buydowns, Grants and Other Incentives on the Amount of the Tax Credit
      *State rebates, buydowns, grants or other incentives do not decrease the amount eligible for the federal investment tax credit if the company is required to pay federal income tax on the incentive.  The majority of incentives represent income on which federal income taxes are paid and therefore do not decrease the basis for the federal investment tax credit. There is a limited class of incentives, however, that are not taxable; for these incentives the tax credit basis must be reduced prior to calculating the commercial solar tax credit amount.  The following tables describe different types of incentives and their impact on the tax credit basis. If you are uncertain which category your particular rebate program falls under, we urge you to get in touch with the state or utility energy program contacts listed at www.dsireusa.org, or contact a tax attorney for project specific clarification.)

The NEW Federal Tax Credit:

-In effect January 1, 2009.

Everything is the same as the old except the cap of $2,000 for residential is now lifted!!

State Tax Credit:

-Initiated January 2008, no expiration date

-For residential property it covers solar hot water, solar electric, solar pool heaters, and wind generators.

-You get 50% back from the state, up to $12,500 per system.  The state allows you to purchase as many systems as you need to cover 100% of your electricity!

 Great News for Solar in Louisiana - 7/10/2007

 Governor Blanco Signs Solar Tax Credit Bill

Great news for solar in Louisiana!  Gov. Blanco signed our LA tax credit bill, SB90, into law Tuesday night, July 10th, 2007.  SB90 provides a 50% tax credit on the first $25,000 of your residential system.  This credit only covers homes on residential property and residential/commercial property.  Residential/commercial property means any commercial businesses that are located on residential property, for example an apartment complex. 
The state tax credit can be combined with the existing 30% federal tax credit ($2000 for residential) which currently expires December 31st, 2008. 

“Now is the most affordable time to go solar,” said Justin Runnels, Business Development Manager of Gulf South Solar.  “We have been given this incredible opportunity.  We expect Louisiana’s government to be shocked by how many people in Louisiana will take advantage of this.  If as many people purchase solar as we expect the Legislature may look at canceling this tax credit in the future" 

Many thanks to Senator Nick Gautreaux for authoring this bill and to Wade Byrd, Justin Runnels, and Jeff Shaw for their many hours of time at the capital, especially in the House Ways and Means Committee, to get this passed. 

Here’s your chance solar enthusiasts!  Take full advantage of this refundable tax credit while it lasts.  Justin said you could contact him with any questions about this. 

The direct links to the info are below:

The State Tax Credit Law - As Enacted July 10, 2007

The Emergency Rules - Effective October 1, 2007 to April 1, 2008

The New Emergency Rules - Effective June 20, 2008 until final rules are enacted

The New Rule that increases the size of allowable net-metering for commercial businesses-Effective August 19, 2008-recently added 

The SEIA Handbook: Guide to Federal Tax Incentives for Solar Energy-recently added

The New Federal Tax Credit in Effect January 1, 2009-recently added

Tax Credit Info. for the New Federal ITC-Major changes in the new law-recently added

DESIRE: Database of State Incentives for Renewables and Efficiency

*Final Rules are in progress and LSES will post here as soon as they are available.**


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