Idaho solar incentives, tax credits and rebates
Resources to make solar panels more affordable in 2024
There’s no way around it: Installing solar panels is expensive. On the bright side, Idaho residents can take advantage of the federal solar tax credit, a statewide personal tax deduction and low-interest loan programs.
Here’s everything you need to know about how state and federal solar incentives can make installing panels more affordable in the Gem State.
In Idaho, a typical residential solar panel system costs $10,000 to $28,571, depending on the size of your system and what financial incentives you qualify for.
Jump to insightThe federal solar investment tax credit (ITC) is the best financial incentive for most Idaho homeowners to buy solar panels.
Jump to insightIdaho residents can get the retail rate when they sell excess solar power to the local grid.
Jump to insightResidential solar panel incentives in Idaho
The federal solar investment tax credit (ITC) is the most significant financial incentive for most homeowners buying solar photovoltaics (PV panels) in Idaho. It reduces your federal tax liability by 30% of how much it costs to install solar panels.
The ITC drops to 26% in 2033 and then 22% in 2034.
The ITC is a credit, meaning it directly decreases the amount of taxes you owe. For example, if you spend $10,000 installing a solar panel system, the ITC is worth $3,000. If in the year your system becomes operational you owe $15,000 in taxes, the ITC reduces what you owe to $12,000.
Personal tax deduction
The Residential Energy Alternative Tax Deduction is a statewide income tax break for Idaho residents who install renewable energy technology, including solar. The deduction is worth 40% of the cost of the system in the year of installation. An additional 20% of the cost can be deducted each year for the following three years.
The maximum deduction in any single year is $5,000, and the total maximum deduction is $20,000. There is no specific expiration date for this incentive.
Low-interest solar loan programs
The Idaho State Energy Loan Program offers low-interest loans to fund energy efficiency projects and renewable energy installations for single-family homes in Idaho. The loans range from $1,000 to $30,000 and are available on a first-come, first-served basis. The interest rates vary based on the loan term: 3% for 36 months, 5% for 60 months and 7% for 84 months.
You can combine the federal solar tax credit with statewide and local utility incentives.
Applicants are evaluated for creditworthiness by financial institutions. The loan must be secured with real estate. Additional qualifications are listed on the Idaho Governor’s Office of Energy and Mineral Resources (OEMR) website.
The incentive is available statewide for single-family homeowners in Idaho. There is no expiration date for this program.
Additional solar incentives in Idaho
Check the DSIRE for the most comprehensive source of information about solar incentives and policies in Idaho.
| Incentive type | Amount | Eligible solar equipment | Applicable sectors | Administrator | |
|---|---|---|---|---|---|
| Clean Energy Project Bond Program | Bond program | Varies | Solar thermal electric, solar photovoltaics, fuel cells using renewable fuels | Commercial, industrial, investor-owned utility, local government, municipal utilities, cooperative utilities, state government, federal government | Idaho Energy Resources Authority |
| Property Tax Exemption for Wind, Solar and Geothermal Energy Producers | Property tax incentive | Property taxes nullified, replaced with a 3.5% rate for solar panels | Solar thermal electric, solar photovoltaics | Commercial | Idaho State Tax Commission |
What to know about net metering in Idaho
When your solar system produces more energy than you can use and you don’t have a solar battery to store it in, there’s another option. You can sell the excess energy to your local electric company through net metering.
Net metering policies and laws in Idaho have experienced significant changes in recent years, largely driven by proposals from Idaho Power, a major utility in the state. Starting in 2017, Idaho Power began initiating proposals to the Public Utilities Commission (PUC) to modify its distributed energy policy.
Check with your local utility for the most up-to-date net metering policies.
A key change occurred in December 2023 when the Idaho PUC approved Idaho Power's proposal to shift from traditional net metering to a net-billing system. This new system replaces the kilowatt-hour-for-kilowatt-hour compensation model previously used for solar system owners.
Additionally, Idaho Power has proposed further changes that would affect existing rooftop solar customers, potentially reducing the price paid for their excess energy by 50%. These alterations to Idaho's net metering landscape could have substantial impacts on the financial incentives for residential solar installations in the state.
» GREENEST STATES: Idaho ranked 6th in 2024
How much are solar panels in Idaho?
After considering the federal solar tax credit, solar panel costs in Idaho typically range from $10,000 to $20,000.
Your system size greatly affects how much you pay overall. The typical system size for solar systems in Idaho is 10.76 kW (kilowatts). You might need a larger or smaller system, depending on your average household energy use.
Average solar cost by system size in Idaho
| 5 kW | 6 kW | 7 kW | 8 kW | 9 kW | 10 kW | |
|---|---|---|---|---|---|---|
| Before federal tax credit | $14,286 | $17,143 | $20,000 | $22,857 | $25,714 | $28,571 |
| After federal tax credit | $10,000 | $12,000 | $14,000 | $16,000 | $18,000 | $20,000 |
Solar resources in Idaho
The State of Idaho’s attorney general has issued tips for homeowners going solar. Below are additional resources that can guide you through transitioning to solar.
Find solar companies in Idaho
A good solar company helps you navigate local incentives, permitting and net metering policies. Compare our picks for Idaho’s top solar companies to learn more.
| Companies | Customer rating | Pro install | Payment options | Year founded |
|---|---|---|---|---|
| Blue Raven Solar | 4.7 | Cash, loan, lease, PPA | 2014 | |
| Green Home Systems | 2.9 | Cash, loan | 2017 | |
| SunPower | 3.3 | Cash, loan, lease | 1985 | |
| Tesla Energy | 1.9 | Cash and loan | 2015 | |
| ShopSolar | 4.7 | Cash, loan | 2018 |
FAQ
Can I get free solar panels in Idaho?
No, but you can lease solar panels with minimal upfront costs. Still, neither is totally free. Solar leases generally require a flat monthly fee.
» FREE SOLAR PANELS: Are they really free?
What is the difference between a tax credit and a tax deduction?
Tax credits pack a bigger punch in lowering your tax bill. A $1,000 tax credit saves you $1,000 regardless of your tax bracket. In contrast, a $1,000 tax deduction might save you $220 if you're in the 22% tax bracket.
- Tax credits are a dollar-for-dollar reduction of your tax liability. They directly subtract from the amount of tax you owe, making them more valuable than deductions of the same amount.
- Tax deductions reduce your taxable income. They lower your tax bill indirectly by decreasing income subject to tax. The value depends on your tax bracket.
How much can I save with solar panels in Idaho?
On average, Idaho homeowners with solar panels avoid $71,010 in utility costs over 25 years. Even if you don’t generate 100% of your energy needs, you can still save a lot of money versus paying traditional utility bills. In Idaho, solar panels usually pay for themselves within 10 years.
» EXPLORE: Where your solar savings go the furthest
How do I know if my house is a good candidate for solar?
It’s best to have plenty of unshaded roof space that faces south or west for optimal sun exposure. It’s also smart to upgrade any old, inefficient appliances first. Reducing your electrical loads now means you can get a smaller system, which will be cheaper.
The condition of your roof matters too — if it needs replacement soon, do that before installing solar panels. Installing solar panels on an old roof might mean you have to remove the panels, replace your roof and then reinstall the panels again. This will cost around $5,000 for a 19-panel setup.
Solar photovoltaic (PV) technologies, more commonly known as solar panels, absorb sunlight and convert it into usable electricity. If you have a lot of shading around your house, they might not get enough sun to power your home.
Is my HOA allowed to restrict solar panels?
A homeowners association can restrict your solar panels, but it can’t make rules that will prevent you from putting up solar panels, make the panels more expensive for you or inhibit the functionality of the panels, according to Idaho House Bill 158.
What has Idaho’s investment in solar been so far?
Total solar investments in the state amount to $1.3 billion, according to the Solar Energy Industries Association.
Bottom line
Although there aren’t as many incentives as in some other states, appealing tax breaks, low-interest loans and other initiatives make going solar worthwhile for many Idaho homeowners.
The ConsumerAffairs Research Team conducted an in-depth analysis to determine the average costs of going solar. Turns out, it’s worth it for many homeowners, particularly for Idahoans.
Solar costs vs. savings: Idaho and nearby states
| 6-kW system cost (before incentives) | 10-kW system cost (before incentives) | Typical system size needed* | Average cost per watt | Total utility power cost savings** | |
|---|---|---|---|---|---|
| Idaho | $17,143 | $28,571 | 10.76 kW | $3.01 | $71,010 |
| Montana | $14,539 | $23,240 | 11.47 kW | $2.42 | $67,246 |
| Nevada | $15,507 | $25,846 | 9.44 kW | $2.57 | $41,459 |
| Oregon | $17,289 | $28,814 | 10.93 kW | $3.05 | $52,903 |
| Utah | $16,931 | $28,219 | 10.72 kW | $2.62 | $53,135 |
| Washington | $17,608 | $29,347 | 12.3 kW | $3.05 | $59,116 |
| Wyoming | $15,401 | $24,590 | 11.48 kW | $2.57 | $85,447 |
Article sources
ConsumerAffairs writers primarily rely on government data, industry experts and original research from other reputable publications to inform their work. Specific sources for this article include:
- DSIRE, “Idaho Programs.” Accessed March 29, 2024.
- EnergySage, “The cost of solar panels in Idaho.” Accessed March 29, 2024.
- Solar Energy Industries Association (SEIA), “Idaho Solar.” Accessed March 29, 2024.
- SolarReviews, “How much do solar panels cost in Idaho, 2024?” Accessed March 29, 2024.
- Idaho State Legislature, “House Bill No. 158.” Accessed July 5, 2024.
