Louisiana is the No. 1 electricity-consuming state in the US. However, overall monthly costs are kept somewhat low due to relatively low electricity rates. That said, electricity costs have increased by 3% annually. These yearly increases are expected to continue in the future. For this reason, many residents of Louisiana are looking for alternative sources of electricity.
Therefore, many people are considering investing in solar panels. It is no secret that solar panels are cost-effective in the long run and end up paying for themselves.
However, the initial cost of solar panels can be high. You are probably wondering about the average cost of solar panels in Louisiana is. The initial cost is important, but you also need to consider how long the solar panels will take to pay for themselves, known as the break-even or the payback period. You will break even on your investment, although how long it takes varies. To determine this payback period, we need to know the average cost of solar panels in Louisiana.
In addition, we also need to know how much electricity you use and how much you pay for it. For example, we know how much sunlight Louisiana gets and how much electricity solar panels in Louisiana can generate.
Once we have these numbers, we can then plug them into our final equation.
Average Cost of Solar Panels in Louisiana
The average cost of solar panels in the US has decreased by 20% in the last five years. This means that you pay an average of $2.38 per watt of solar panel installed in Louisiana. This is below the national average of $3 per watt.
However, a bulk pricing scale applies when you buy solar panels. For example, a 10-kilowatt system will cost more than a 9-kilowatt system, but the larger of the two systems is more cost-effective on a per watt basis.
Generally speaking, it’s more economically feasible to install a more extensive system in the long run. That point out of the way, how much can you expect to spend on solar panels?
- 4kW – $2.59 per watt – $10,360
- 5kW – $2.49 per watt – $12,450
- 6kW – $2.38 per watt – $14,280
- 7kW – $2.35 per watt – $16,450
- 8kW – $2.37 per watt – $18,960
- 9kW – $2.31 per watt – $20,790
- 10kW – $2.28 per watt – $22,800
Solar Rebates and Incentives in Louisiana
Unfortunately, Louisiana has no state-sanctioned rebates or incentives in place. However, there is a federal rebate program known as the Federal Solar Rebate Program. It is also known as the ITC or Investment Tax Credit. At this time, this rebate sits at 26%. In other words, you only have to pay 74% of the upfront cost of solar panel installations.
That said, this will only last until the end of 2022. Then, at the end of 2023, this rebate will be 22%. Past 2023, there is no rebate plan yet in place.
Therefore, it is recommended that you buy your solar panels now to get the best deal. So, what do solar panel costs in Louisiana look like after this rebate has been applied?
- 4kW – $7,666.40
- 5kW – $9,213
- 6kW – $10,567.20
- 7kW – $12,173
- 8kW – $14,030.40
- 9kW – $15,384.60
- 10kW – $16,872
The Solar Panel Payback Period for Louisiana
We determined how much it would cost to install solar panels in Louisiana. However, we still have some work to do to determine how long they will take to pay for themselves.
We need to know how much electricity you use and how much you pay for it. We also need to know how much electricity the average solar panel can produce in Louisiana. Once we have these figures, we can plug them into our final equation.
Average Energy Consumption and Expenditures in Louisiana
Residents of Louisiana use an average of 1,254 kWh of electricity per month. This comes in at 38.87% more than the national average, 903-kilowatt hours per month.
However, although Louisianans use a lot of electricity, they also have the lowest rates in the country.
In Louisiana, the rate is 8.37 cents per kilowatt-hour of electricity used. That’s nearly 30% less than the national average of 11.88 cents per kWh.
Due to these low electricity rates, electricity bills for Louisiana residents are kept relatively low. The average Louisianan pays $105 per month for their electricity or $1,260 per year. This is 26th in the nation, at 1.87% less than the rest of the country, which pays $107 per month.
Peak Sunlight in Louisiana: How Much Electricity do Those Solar Panels Produce?
We will now calculate how much electricity solar panels in Louisiana can produce. The standard size of a solar installation is 5 kW, so this is what we will be working with. Moreover, a standard of four hours of peak sunlight per day is used to calculate solar panel output.
A standard 5kW solar installation can produce an average of 20 kilowatt-hours of electricity per day. This equates to about 600-kilowatt hours of electricity per month.
However, Louisiana gets 4.92 hours of peak sunlight per day, which needs to be factored into the equation.
This means that a 5kW solar installation in Louisiana can produce roughly 24.6 kilowatt-hours of electricity per day or 738 kWh per month.
The Solar Panel Payback Period
We now have the necessary figures for our equation. However, there are four numbers that you need to keep in mind for this payback period calculation:
- Residents of Louisiana spend an average of $1,260 per year on their electricity.
- On average, residents of Louisiana use 1,254 kilowatts hours of electricity per month.
- A 5kW solar system will cost you $9,213 to install in Louisiana.
- In Louisiana, that 5kW solar system will produce roughly 738-kilowatt hours of electricity per month.
Therefore, 738-kilowatt hours is roughly 58.85% of the 1,254 kilowatt-hours of electricity used per month in Louisiana.
This means that you can save 58.85% on your yearly electric bill, savings of $741.53. Based on the initial cost of a 5kW solar system, your payback period will be 12.42 years.
However, you will need a 9kW solar system to fully meet your electricity consumption. A 9kW solar system in Louisiana will cost $15,384.60. This will allow you to save 100% of your yearly energy costs. Therefore, you will save $1,260 per year. The payback period on this would be 12.21 years.
The Average Cost of Solar Panels in Louisiana: Final Thoughts
As a long-term investment, solar panels are worth the cost in Louisiana. The payback period is relatively long; however, the solar panels will eventually pay for themselves.