Idaho Solar Incentives, Tax Credits and Rebates

Personal tax deduction

Idaho homeowners can deduct part of the cost of installing renewable energy systems, including solar panels, from their state taxable income. You may deduct 40% of the system cost in the first year and 20% of the cost each year for the next three years.

But there are limits:

• You can deduct up to $5,000 per year.
• The maximum total deduction is $20,000 over four years.

Don’t get confused

This is a tax deduction, not a rebate, meaning it reduces your taxable income, not your tax bill dollar-for-dollar.

What to know about net metering in Idaho

Net metering allows homeowners with solar (or other small renewable systems) to use the electricity they produce first and send any extra power back to the grid. In return, the utility credits the homeowner’s bill for that excess electricity. Idaho technically uses a net billing system, which means that credits are worth less than the retail rate.

• Idaho Power lets homeowners with solar systems participate in net billing. Credits can roll over indefinitely, and residential systems must be 25 kW or smaller to qualify.
• Avista Utilities lets customers with solar or other renewable energy systems up to 100 kW in size. However, any unused credits remaining at the end of the annual cycle (March 31) are given to the utility and not paid out to the customer.
• Rocky Mountain Power allows customers with solar systems up to 25 kW or smaller, and credits roll over month to month to help reduce future electricity costs.

Solar panel costs in Idaho

Average solar panel costs in Idaho generally start between $14,160 and $28,320.

System size is a big cost factor of going solar. The typical system size for solar systems in Idaho is 6.3 kW (kilowatts). You might need a larger or smaller system, depending on your average household energy use.

It also depends if you want to add battery storage to your system. Solar batteries cost $7,000 to $18,000, which can double your total system’s price tag.

Average solar panel costs by system size in Idaho

Solar loan programs in Idaho

The Idaho Governor’s Office of Energy and Mineral Resources has a solar loan program offering funding up to $30,000. Interest rates range 3% to 7%, and terms are between three and seven years.

Federal solar loan programs

Energy Efficient Mortgages allow homeowners to finance energy-saving upgrades, including solar systems, as part of their mortgage, often with support from federal programs like FHA or VA.

Types of Energy Efficient Mortgages

• FHA Energy Efficient Mortgages are available to many homebuyers. This lets you add money to your mortgage for energy upgrades. The upgrade cost must be less than the expected energy savings, and it requires a home energy assessment first.
• VA Energy Efficient Mortgages are only for military members, veterans and reservists. This lets you add up to $6,000 if energy savings justify the cost.
• Conventional Energy Efficient Mortgages are offered by private lenders (not government-backed). You can borrow up to 15% of a home’s value for energy upgrades. This may help borrowers qualify by adjusting debt-to-income rules.

Non-residential solar incentives in Idaho

Idaho’s Clean Energy Project Bond Program helps finance large clean energy projects by allowing developers and utilities to borrow money through state-issued bonds.

The program supports projects such as solar, wind, hydropower, geothermal, hydrogen and energy storage, as well as some efficiency upgrades. It mainly benefits utilities, governments and commercial developers, not individual homeowners.

Compare solar companies in Idaho

Working with a solar company in Idaho makes it easier to understand local incentives.

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