Idaho Solar Incentives, Tax Credits and Rebates

Residential solar incentives in Idaho

Idaho does not offer a broad statewide cash rebate for residential solar panels. The main state benefits are a personal income tax deduction and a low-interest loan program.

Idaho alternative energy tax deduction

Idaho homeowners can deduct part of the cost of a qualifying solar system from their state taxable income over four years:

• First year: 40% of the system cost
• Next three years: 20% of the system cost each year
• Annual limit: $5,000
• Four-year limit: $20,000

For example, a homeowner with sufficient qualifying costs could deduct up to $5,000 per year for four years. The deduction can also apply to certain wind, geothermal and biomass systems.

Don’t get confused: This is a tax deduction, not a rebate or tax credit. It reduces your taxable income rather than lowering your tax bill dollar-for-dollar. Your actual savings depend on your income and Idaho tax rate.

Idaho State Energy Loan Program

The Idaho State Energy Loan Program provides low-interest financing for solar panels and other qualifying home energy improvements.

Eligible homeowners can borrow up to $40,000 and choose from three loan options:

• 3% interest for three years
• 5% interest for five years
• 7% interest for seven years

The program is limited to qualifying single-family homes. Applicants must pass a credit check, secure the loan with real estate and use an appropriately registered or licensed contractor. There is no income limit, but a $100 nonrefundable credit-analysis fee applies after the project passes its initial technical review.

Your application must be approved and funded before installation begins. Applications are processed on a first-come, first-served basis until funding runs out or Dec. 31, 2026, whichever comes first.

Pro tip

Don’t purchase equipment or begin installation until the loan has closed. Projects that are already underway are not eligible.

What to know about solar compensation in Idaho

Idaho does not have one statewide net metering policy. Instead, each utility uses its own rates and billing rules for excess solar electricity.

Your solar panels power your home first. When they produce more electricity than you use, the extra energy goes to the grid and is credited according to your utility’s program.

Idaho Power

Idaho Power uses net billing for most new residential solar customers. You pay the regular retail rate for electricity you take from the grid, while electricity you send back earns a separate Export Credit Rate.

Residential systems generally must be 25 kW AC or smaller. Export rates vary by season and time of day:

• Summer on-peak: 15.6836 cents per kWh
• Summer off-peak: 3.3920 cents per kWh
• October through May: 2.9019 cents per kWh

The highest rate applies from 3 p.m. to 11 p.m. on most summer weekdays and Saturdays. Unused credits roll over and do not expire as long as your account remains active.

Idaho Power expects these rates to remain in place until it files a proposed update in April 2028. Any changes would need approval from the Idaho Public Utilities Commission.

Avista Utilities

Avista offers traditional net metering for qualifying renewable energy systems smaller than 100 kW. Extra electricity is credited in kilowatt-hours and carried forward to offset power you use in later months.

However, any unused credits left at the annual March 31 reset go back to Avista without payment. To avoid losing credits, it’s important not to install a system that regularly produces much more electricity than your home uses.

Rocky Mountain Power

Rocky Mountain Power closed its former net metering program to new applicants in October 2020. Most new residential customers with systems up to 25 kW now use Schedule 136 Net Billing.

The electricity you send to the grid earns a financial credit based on the season and time of day. Export rates are generally lower than the retail price you pay for electricity, but unused credits carry forward to future monthly bills.

Rocky Mountain Power Wattsmart Battery program

Rocky Mountain Power customers may qualify for an upfront incentive and ongoing bill credits by allowing the utility to manage an eligible battery during periods of high electricity demand.

Current residential enrollment incentives are:

• Battery smaller than 10 kW: Up to $1,000
• Battery of 10 kW or more: Up to $2,000

Participants also earn monthly bill credits. During years two through four, credits equal $15 per kW per year, up to $100 annually. Beginning in year five, they equal $50 per kW per year, up to $250 annually. Customers must receive preapproval before installing the battery.

Only certain batteries qualify, and the system must be able to connect to Rocky Mountain Power’s battery-management platform.

Pro tip

Confirm that the battery qualifies and receive program preapproval before purchasing or installing it.

» LEARN: How batteries store solar energy

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. You might need a larger or smaller system, depending on your average household energy use.

Pricing also depends on whether 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. The following table shows average solar panel costs by system size in Idaho and its capital city, Boise.

How can I pay for solar panels?

Going solar is like buying a car. You could pay cash, but a lot of people finance or lease with minimal upfront costs.

• Solar loans work like any other home improvement loan. There’s an application and approval process. You pay it back over time (with interest) each month.
• Leasing solar panels lets you set up a system without high upfront costs. A solar company installs and maintains the panels on your property, and you pay a monthly fee to use them.

A few standing federal programs can still help Idaho homeowners save money on going solar. For instance, eligible homebuyers and homeowners may be able to include qualifying solar or energy-efficiency improvements in an FHA-insured purchase or refinance mortgage.

» SOLAR PANELS: Lease vs. buy

Compare solar companies in Idaho

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

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