Are solar panels worth it in Louisiana?

6 factors to consider before getting solar panels in Louisiana

ConsumerAffairs has heard from thousands of solar customers who have already gone through the installation process, including several from Louisiana. Here’s what to consider before making the switch.

1. Solar panel installation costs
2. Your energy consumption
3. Louisiana solar incentives
4. How long you stay in your house
5. How you pay
6. The solar company you hire

1. Solar panel installation costs: $10,000 to $30,000 

Average solar panel costs in Louisiana are comparable to the national average. Before the federal solar investment tax credit (ITC), a typical residential system ranges from $14,650 to $29,300. That price drops to $10,255 to $20,510 after considering the full 30% tax credit.

Most installers set the price according to the system's wattage, with a typical cost between $2.50 and $5 per watt. “Cost per watt” is a little like looking at the price per square foot when you buy a house. It helps you compare the value of solar energy systems in different sizes. In Louisiana, the average cost per watt is $2.93.

Average solar installation cost by system size in Louisiana

2. Your current energy consumption

A typical Louisiana household needs a system with a capacity of 10.97 kW to offset its electricity needs with solar energy. Depending on your current energy consumption, you might need a larger or smaller system.

Homeowners with solar panels typically save $20,000 to $90,000 over 25 years.

You get the most out of solar if your appliances are electric. Solar panels will save you even more if you also have an electric vehicle. (This may be obvious: Solar panels generate electricity. They won’t help you save on gas bills.)

Incidentally, it’s smart to get your electrical loads as low as possible before going solar. That way, you can get a smaller system, which will be cheaper overall. If you have older electrical appliances, upgrade those before investing in solar panels.

3. Louisiana solar incentives: federal and state

Louisiana solar incentives aren’t as robust as in some other states. Still, appealing tax breaks and other initiatives make going solar worthwhile for many homeowners 

• Federal tax credit: The federal solar investment tax credit (ITC) is currently the biggest incentive for most homeowners going solar. The ITC provides a 30% tax credit on your total system costs, including equipment, labor and permits. It will drop to 26% in 2033 and 22% in 2034.
• Statewide property tax exemption: A solar property tax exemption means that, for tax purposes, the addition of a solar energy system won’t increase your property's assessed value. Essentially, your property tax bill won’t go up because your solar panels increase the market value of your home.
• Net metering: Net metering lets homeowners with solar panels sell any excess electricity they generate to their local power grid. In Louisiana, you pay the full retail price for energy you buy from the utility. You get credited at "avoided cost" for the energy you sell to the utility. Avoided cost rates are updated yearly. As of publishing, avoided cost rates are around 3 cents per kilowatt-hour (kWh).
• Solar for All: Louisiana's new Solar for All program aims to offer easy, affordable financing options and support community spaces and disadvantaged businesses in the near future.

» GREENEST STATES: Louisiana ranked 28th in 2024

4. How long you plan to stay in your house

It takes years for electric bill savings to make up for the initial cost — about 11 years on average in Louisiana. If you sell your house and move before then, you might not fully realize the financial benefits of your solar investment.

A Zillow study found that, on average, houses with solar panels sell for 4.1% more. Let’s say you spend $25,000 putting solar panels on a house that costs $400,000. It might sell for $16,400 more in a few years, but you miss out on some of that $54,636 in total avoided utility costs over the system’s life span.

Solar panels last 25 to 30 years.

In other words, don't get solar panels just because you want to sell your house soon. Consider a home improvement project with a better return on investment, like remodeling the bathroom or kitchen, instead.

5. How you pay

Solar panel installations are expensive, but you don’t have to pay in full upfront. There are options for loans, leases and other agreements. 

• Loans: Solar loans work like any other type of loan. They have relatively low fixed interest rates. Once you pay the loan off, you own your system outright.
• Leases: Leasing panels is one way to get the benefits of solar energy without the high upfront cost. A solar lease works like a car lease — you get to use the panels but don’t own them. Leasing can be good if you have limited savings. Solar lease agreements typically last 20 to 25 years.
• Home equity loans or lines of credit (HELOC): Eligible homeowners can borrow against the equity in their house to finance a solar panel system. HELOCs often have variable interest rates, meaning monthly payments can increase over time.

6. The solar company you hire

We’ve heard from several solar customers in Louisiana. In the best-case scenario, it’s easy to make the switch and you’re happy with your system’s performance. In the worst-case scenario, you end up paying thousands for midtier solar equipment from a company with poor customer service and no follow-up or support.

One of the most common complaints is related to pushy sales reps who make promises that can’t be delivered. That’s why it’s so important to thoroughly research and verify claims made by sales teams before making a decision. Use NREL’s PVWatts Calculator to estimate how much electricity a solar panel can produce over a year on your house — just type in your address. Project Sunroof is a free solar savings estimator powered by Google Earth imagery.

Monthly costs: solar payments vs. savings

Think of going solar in terms of your monthly costs. Given rising energy costs in Louisiana and elsewhere, financing solar panels makes sense as long as your monthly loan payment is less than what you would be paying the utility company anyway.

» BEST STATES FOR SOLAR: Louisiana ranked 46th in 2024

Is my house a good candidate for solar panels?

Going solar ends up being worth it for many homeowners as long as their house is a good candidate to support the panel installation. Here’s what to think about before you commit:

• What is the condition of my roof? If you have to replace your roof, do that before you install solar panels. Solar panels are designed to last up to 30 years, so you want your roof to last just as long. Otherwise, it could cost thousands to remove the panels, fix your roof and reinstall the panels again.
• What is the size and angle of my roof? Louisiana (and the rest of the United States) is in the Northern Hemisphere, so solar panels perform best on south-facing roofs. The worst place to install would be on north-facing roofs, especially if those roofs have a high pitch. For example, if the only place you can install is a north-facing roof with a 30-degree pitch, your costs will likely go up by 30% to 40%.
• How much sunlight do I get? Solar panels need regular exposure to sunlight to produce the most energy possible. Louisiana averages 4 to 4.5 peak sun hours each day. However, lots of shading — like trees or tall buildings above your roof — could make your solar system less efficient.

Pros and cons of solar panels in Louisiana

It’s a common misconception that solar panels will totally eliminate your monthly power bill. This is not always the case. On the bright side, you’ll likely pay less each month than you would for traditional utility bills. 

Benefits of solar panels in Louisiana

• Cheaper energy bills: The average homeowner in Louisiana uses a lot of power, which adds up to a lot of savings when you switch to solar. Going solar now means your monthly energy expenses will be more predictable (and often much lower).
• More energy independence: With solar panels plus an energy storage battery, you’ll be less vulnerable to power outages. Solar panels also protect you from future energy cost increases.
• Better for the environment: Traditional energy sources like coal and natural gas release carbon dioxide and other harmful pollutants into the air. Installing solar panels on your roof helps the environment by reducing greenhouse gas emissions and dependence on fossil fuels.
• Higher home resale value: Installing solar panels can significantly increase a home's value. According to the above study, homes with solar panels sell for 4.1% more on average. The exact increase in value varies by location, with homes in active solar markets sometimes seeing even higher boosts.

Drawbacks of solar panels in Louisiana

• Solar equipment is expensive: Even with rebates and other financial incentives, the price typically starts between $10,000 and $30,000. It’s even more expensive if you want a solar battery for energy storage. Solar battery costs are generally between $7,000 and $18,000. Getting a solar battery might be strategic if net billing rates continue to decline in Louisiana. That way, you can store energy at home instead of tapping into the local grid when needed.
• Potential roof leaks: The installation involves drilling holes into the roof to anchor the panel mounting systems. If not done correctly, this can lead to leaks or structural damage.
• Energy production varies: Solar panels are dependent on weather conditions and seasonality. Solar panels still work on cloudy days, but less available sunlight does affect how efficiently they produce energy.

» MORE: Solar energy pros and cons

Find solar companies in Louisiana

A good solar company helps you navigate local incentives, permitting and net metering policies. Compare our picks for Louisiana’s top solar companies to learn more.

Bottom line: Is going solar in Louisiana worth it for you?

Going solar in Louisiana might be easier than you think. The main obstacle to going solar is the high upfront cost of purchasing and installing solar panels, inverters and other equipment. For a lot of homeowners, it ends up being worth it as long as their cost savings over time outweigh the initial investment. Others are happy to go solar for the environmental benefits alone. Louisiana ranked as the 46th best state for solar in 2024.

Solar costs vs. savings: Louisiana and nearby states