For many people, the attraction of solar panels is that they are an alternative, non-fossil fuel source of energy. But for plenty of other people, solar panels are attractive for their potential economic benefits. As a Monroe, LA solar panels installer, Jimmy Dortch leads his Achievers, Inc., in retrofitting area homes with the infrastructure that takes the sun’s rays and converts that energy to electricity. The first thing on many local homeowners’ minds, though, are those economic benefits.
Anywhere in the United States, homeowners who install solar panels can expect a 30% tax credit from the federal government for putting up these alternative sources of energy. That tax break alone, however, might not make installing solar panels worth it. In simpler words, the federal solar panels tax break alone doesn’t help the homeowner break even on the investment. It needs to be combined with other financial incentives, says Dortch.
Solar panels in Monroe, LA, come with Louisiana’s 50% economic incentive. What that means is the State of Louisiana will reimburse homeowners for 50% of the cost of purchasing and installing their solar panels. Despite the seeming generosity of that offer, however, that Louisiana reimbursement alone doesn’t necessarily make installation worth it, either. Dortch explains that what makes Monroe, LA, solar panels worth the investment is the combination of the state’s 50% cash-back, and the federal government’s 30% tax incentives combined. Either incentive alone is not incentive enough; the homeowner would end up spending more than if they stuck with the grid.
With both of these incentives in effect, Dortch says, it takes local homeowners, on average, about seven years to see returns on their investment in solar panels. The benefit after that period is big, though. Power could be free, depending on how much local Louisiana power sources cost from the grid. But the long-term economic benefits of solar panels also depend on how much power costs throughout the state. For example, says Dortch, if power in Louisiana—which is relatively cheap—rose to California levels, then it would be worth installing Monroe, LA solar panels even if only one of the two incentives were in place. In Louisiana, power from the grid costs about 12 cents per watt. In California it might be between 30 and 40 cents per watt. As a result, California solar panels are getting really popular.
Dortch likens investing in Monroe, LA solar panels to investing in a car with amazing purchase incentives: If you bought a brand-new Subaru and the federal and state governments kicked in 80% of the cost, and you knew the car would make its own gas, would you buy it? Of course! That’s how it tends to be with solar panels in Louisiana these days. State and federal governments combined provide good economic incentives, and the infrastructure generates its very own power.
Notwithstanding the benefits, there are challenges homeowners may face when they decide to install solar power. Solar panels require a lot of square footage for installation. That’s usually not a problem in Louisiana, where many people live in rural environments with plenty of arable pasture for solar panel use. Homeowners also have to make sure they can front the initial expenditures of purchasing and installing solar panels. And to qualify for the federal tax credit, homeowners need to be paying federal taxes. Because of all the criteria that have to be met, says Dortch, solar panels are somewhat relegated to higher-income folks. Those earning $25,000 or $30,000 aren’t doing it; those with $100,000 and $200,000 yearly salaries are. That shouldn’t prohibit someone from at least checking out the possibility of installing solar panels, particularly because of those generous state and federal incentives.