Louisiana draws a sharper line than most states between a solar lease and a power purchase agreement. A lease is permitted here. Residential power purchase agreements have no clear authorization in Louisiana law. They are marketed with the same words and the same photographs, and a lease is the arrangement companies actually offer here, which makes reading the top of the document the most useful thing on this page. Any per-kilowatt-hour offer deserves a direct question about what the contract actually is.
The Instrument Matters Here, Not Just the Price
Both arrangements put panels on your roof at no upfront cost, and both leave the company owning them. The difference is what you are buying.
Contract | What you pay for | Louisiana position |
|---|---|---|
Solar lease | A monthly fee, typically with an annual escalator, for the use of the equipment | Permitted |
Power purchase agreement | The electricity produced, at a contracted price per kilowatt-hour | No clear authorization; not offered to residential customers |
Per the Database of State Incentives for Renewables and Efficiency, 23 states either ban residential power purchase agreements or have no known programs, and Louisiana sits in the small group of those that still sees active residential lease offers.
So if an offer in Louisiana quotes you a price per kilowatt-hour rather than a monthly fee, stop and ask what the contract actually is. It may be mislabeled, it may be a lease described loosely, or it may be a product the company cannot deliver here. Any of the three is a reason to slow down.
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New Orleans Answers to a Different Body
The second thing that makes Louisiana unusual is jurisdictional. Entergy New Orleans is regulated by the New Orleans City Council, not the Public Service Commission, and the Commission rules that took effect on January 1, 2020 and moved the rest of the state to avoided cost never reached it. Orleans Parish still has net metering, for residential facilities up to 25 kW.
For anyone weighing an offer inside the city, that changes the arithmetic in your favor and it is the sort of detail a statewide sales script will flatten. A quote built on the 3.9¢ avoided cost that applies elsewhere in Louisiana understates what your exports are worth.
Outside New Orleans, the Commission names an avoided cost figure for each of fifteen utilities and they land between 3.583¢ and 3.990¢. Against a retail rate near 13.07¢, exported power is worth roughly a quarter of power you use yourself, which is the single most important number in any Louisiana comparison.
What a Lease Has to Beat
With Section 25D at $0 for purchased systems whose installation is completed after December 31, 2025, the case for a lease in Louisiana is stronger than it was a year ago. The surviving Section 48E credit is commercial, claimed by the business that owns the system. Under current law it applies to projects placed in service by December 31, 2027, or that began construction by July 4, 2026, so ask the provider whether its Louisiana projects still qualify and how much of the credit reaches your payment.
What it has to beat is ownership at Louisiana’s particular numbers. Your generation displaces power at 13.07¢ when the house uses it as it is made, and a Gulf Coast climate means peak generation and peak cooling load arrive together for months at a stretch. That is a favorable match, and it belongs to whoever owns the system only in the sense that a lease payment sits on top of it.
Louisiana once ran a 50% residential state credit that was among the most generous in the country. It is gone, with nothing replacing it, so there is no state money on either side of the comparison to tip it.
You Likely Will Not Qualify If
- You were offered a residential power purchase agreement. Louisiana permits leases, while residential power purchase agreements have no clear authorization here. Ask what the contract actually is.
- Your credit history does not clear the provider’s threshold. A lease is a long financing decision by the company and turns on credit rather than on your roof.
- You are counting on the 30% federal credit yourself. Section 25D is $0 for purchased systems from January 1, 2026, and Section 48E is claimed by the business that owns the system.
- You are expecting Louisiana’s old 50% state credit. It has ended and nothing has replaced it.
- You are in New Orleans and reading statewide figures. Entergy New Orleans answers to the City Council, and the avoided cost rates that apply elsewhere are not yours.
Reading the Contract Before the Price
Because a lease is the only third-party route open here, the questions worth asking are lease questions. Does the monthly payment escalate, and by how much each year. What happens at the end of the term, including purchase price or removal and who repairs the roof. What must a buyer of your house do, and what if they decline to assume it. Is production guaranteed, and what is the remedy if it falls short.
Then compare across the whole term rather than the first year, because an escalator running faster than your utility rate turns a saving into a cost partway through. Our Louisiana incentives guide covers the avoided cost schedule and the New Orleans exception, and the Louisiana installer list covers who does the work.
Louisiana Solar FAQs
You can get a solar lease, which puts panels on your roof at no upfront cost with the company owning them. Residential power purchase agreements are a different matter: they have no clear authorization in Louisiana, so a lease is the arrangement companies actually offer here. If an offer quotes a price per kilowatt-hour rather than a monthly fee, ask what the contract actually is.
Under a lease you pay a monthly fee, typically with an annual escalator, for the use of the equipment. Under a power purchase agreement you buy the electricity the system produces at a contracted price per kilowatt-hour. Both leave the company owning the panels. In most states the distinction is a preference; in Louisiana, where PPAs have no clear authorization, it decides what you are actually being offered.
Entergy New Orleans is regulated by the New Orleans City Council rather than the Public Service Commission, and the Commission rules that took effect on January 1, 2020 and moved the rest of Louisiana to avoided cost never reached it. Orleans Parish still has net metering for residential facilities up to 25 kW, so a quote built on statewide avoided cost understates what your exports are worth.
It is more competitive than it was, because Section 25D is $0 for purchased systems whose installation is completed after December 31, 2025 while the company may still claim Section 48E, on projects placed in service by December 31, 2027 or started by July 4, 2026, and pass some value back. What it has to beat is ownership at Louisiana’s numbers: generation displaces power at 13.07¢ when the house uses it directly, and Gulf Coast cooling load lines up with peak generation for months at a time.
Four things, none of which is the first-year payment. Whether the monthly payment escalates and by how much. What happens at end of term, including purchase price or removal and roof repair. What a buyer of your house must do if you sell, and what happens if they decline to assume it. And whether production is guaranteed, with what remedy if it falls short. Compare across the whole term, since an escalator outrunning your utility rate turns a saving into a cost.
Check what the contract is before you check the price. Enter your ZIP code to see who serves your address.
Check the contract type before the price
References & Research Sources
The legality posture, rates and program boundaries above come from the records below. Contract terms described are general to third-party ownership and are not a substitute for reading your own agreement or taking legal advice on it. Sources accessed between June 10 and August 20, 2026.
- pv magazine USA. States without residential solar third-party ownership may become holes in the market after 2025. Analysis drawing on DSIRE data: the 23-state count and the lease-permitting group Louisiana sits in. Dated July 22, 2025. Accessed August 17, 2026.
- Louisiana Public Service Commission. Net metering record and the Avoided Cost Rate by Electric Utility schedule for 2026. The General Order of September 19, 2019, the December 31, 2019 grandfathering line, and the per-utility avoided-cost rates from $0.03583 to $0.03990. Accessed August 17, 2026.
- Entergy New Orleans. Net metering documentation. The New Orleans City Council rules keeping net metering for residential facilities up to 25 kW, outside Commission jurisdiction. Verified against the company’s own page August 20, 2026.
- US Energy Information Administration. Electric Power Monthly, Table 5.6.A: Average Price of Electricity to Ultimate Customers. The Louisiana statewide average residential rate of 13.07¢ per kWh used on this page as labeled context. Accessed August 17, 2026.
- Internal Revenue Service. One, Big, Beautiful Bill provisions. The Public Law 119-21 termination of Section 25D for purchased systems whose installation is completed after December 31, 2025, and the availability of Section 48E to business owners of residential systems under current deadlines. Accessed August 17, 2026.
