Are solar panels worth it in Montana?

7 factors to consider before getting solar panels in Montana

ConsumerAffairs has heard from thousands of solar customers who have already gone through the installation process, including several from Montana. Here’s what to consider before making the switch:

1. Solar panel installation costs
2. Your energy consumption
3. Montana solar incentives
4. Net metering buyback rates
5. How long you stay in your house
6. How you pay
7. The solar company you hire

1. Solar panel installation costs: $10,000 to $30,000

Average solar panel costs in Montana are comparable to the national average. Before the federal solar investment tax credit (ITC), a typical residential system ranges from $14,000 to $28,000. That price drops to $9,800 to $19,600 after the full 30% tax credit.

Most installers set the price according to the system's wattage, with a typical cost between $2.50 and $5 per watt. “Cost per watt” is a little like looking at the price per square foot when you buy a house. It helps you compare the value of solar energy systems in different sizes. In Montana, the average cost per watt is only $2.80.

Be aware: The cost of a solar storage battery isn’t typically included in solar quotes, and that sometimes costs as much as the panels. Solar batteries are a must if you want real energy independence and essential if you go off-grid.

Average solar panel installation cost by system size in Montana

2. Your current energy consumption

Look at your latest utility bills to see how much electricity your house needs each month. This tells you what size and capacity your solar system needs to be. A typical Montana household needs a system with a capacity of 11.47 kW to offset its electricity needs with solar energy. You might need a larger or smaller system, depending on your current energy consumption. Once you know your current energy consumption, you can calculate your potential savings and the time it should take for your solar installation to pay for itself.

3. Montana solar incentives: federal and state

The federal solar investment tax credit (ITC) is the most significant incentive for most homeowners going solar in Montana. The ITC provides a 30% tax credit on your total system costs, including equipment, labor and permits. It will drop to 26% in 2033 and 22% in 2034.

Montana has two more great statewide incentives for residential solar power:

• Property tax exemption: Homeowners who install solar systems don't pay property taxes on the added home value for 10 years. This benefit is capped at $20,000 for single-family homes.
• Loan program: Residents can borrow up to $40,000 to install renewable energy systems, including solar. These loans have a 20-year repayment period. The interest rate, currently 3.5% for 2024, is reviewed annually.

» EXPLORE: Montana solar incentives, tax credits & rebates

4. Net metering rates in Montana: retail rate

Residents with solar panels can participate in net metering, which lets them earn credits when they produce excess power. These credits reduce future bills but typically reset annually.

NorthWestern Energy (NWE), a major utility in Montana, limits net-metered systems to 50-kilowatt (kW) systems. NWE doesn't allow aggregate net metering for multiple installations or virtual net metering.

Rural electric cooperatives set their own net metering rules, as they're not regulated by the Montana Public Service Commission. If you're considering net metering, ask about system size limits, credit rollover policies and aggregate net metering options.

» GREENEST STATES: Montana ranked 35th in 2024

5. How long you plan to stay in your house

It takes years for electric bill savings to make up for the initial cost — about 10 years on average in Montana. If you sell your house and move before then, you might not fully realize the financial benefits of your solar investment.

Solar panels last 25 to 30 years.

A Zillow study found that, on average, houses with solar panels sell for 4.1% more. Let’s say you spend $25,000 putting solar panels on a house that costs $400,000. It might sell for $16,400 more in a few years, according to Zillow. But you miss out on some of that $67,246 in total avoided utility costs over 25 years.

In other words, don't get solar panels just because you want to sell your house soon. Instead, consider a home improvement project with a better return on investment, like remodeling the bathroom or kitchen.

6. How you pay

If you can, it’s often financially strategic to pay for the whole thing upfront. You own the system from day one and receive the benefits of available tax credits; plus, you don’t have to pay interest on a loan. Of course, cash isn’t always an option. That’s when loans, leases and other agreements come into play.

• Loans: Solar loans work like any other type of loan. They have relatively low fixed interest rates. Once you pay it off, you own your system outright.
• Leases: Leasing panels is one way to get the benefits of solar energy without the high upfront cost. A solar lease works like a car lease — you get to use the panels but don’t own them. Leasing can be good if you have limited savings. Solar lease agreements typically last 20 to 25 years.
• Home equity loans or lines of credit (HELOC): Eligible homeowners can borrow against equity in their house to finance a solar panel system. These often have variable interest rates, meaning monthly payments can increase over time.

7. The solar company you hire

People have mixed experiences with solar companies. In the best-case scenario, it’s easy, and you’re happy with the system’s performance. In the worst-case scenario, you end up paying thousands for mid-tier solar equipment from a company with poor customer service and no follow-up or support.

For instance, Krysten in Eureka, Montana, was happy at first, but then her system stopped working. She emailed pictures of the problem to the installer, who identified the issue in “technical jargon” that she couldn’t understand. After forwarding that email to her solar company rep, “they just keep telling me that, ‘No, it looks like your system is working fine’ because the power is on. However, when the power to the grid goes off, then it won't be working fine. I don't know if they don't believe me or they just don't want to think of the problem,” she told us.

Another common complaint is related to pushy sales reps who make promises that can’t be delivered. That’s why it’s so important to thoroughly research and verify claims made by sales teams before making a decision. Use NREL’s PVWatts Calculator to estimate how much electricity a solar panel can produce over a year on your house — just type in your address. Project Sunroof is a free solar savings estimator powered by Google Earth imagery.

Monthly costs: solar payments vs. savings

Think of going solar in terms of your monthly costs. Given rising energy costs in Montana and elsewhere, financing solar panels makes sense as long as your monthly loan payment is less than what you would be paying the utility company anyway.

Is my house a good candidate for solar panels?

Going solar ends up being worth it for many homeowners as long as their house is a good candidate to support a solar panel installation. Here’s what to think about before you commit:

• How old are my appliances? The first step is to ensure that your electrical loads are as small as possible. If you have an older refrigerator or air conditioning unit, for instance, it’s smart to upgrade those before investing in solar panels. That way, you can get a smaller system, which will be cheaper overall.
• How much sunlight do I get? Solar panels need regular exposure to sunlight to produce the most energy possible. Montana averages 4 to 5 peak sun hours each day. However, lots of shading — like trees or tall buildings above your roof — could make your solar system less efficient.
• What is the size and angle of my roof? Montana (and the rest of the United States) is in the Northern Hemisphere, so solar panels perform best on south-facing roofs. The worst place to install would be on north-facing roofs, especially if those roofs have a high pitch. For example, if the only place you can install is a north-facing roof with a 30-degree pitch, your costs will likely go up by 30% to 40%.
• What is the condition of my roof? If you have to replace your roof, do so before you go solar. Otherwise, it could cost thousands to remove the panels, fix your roof and reinstall the panels again.

Pros and cons of solar panels in Montana

It’s a common misconception that solar panels will completely eliminate your monthly power bill — but this is not always the case. Still, you’ll likely be paying much less than you would for traditional utility bills. 

Drawbacks of solar panels in Montana

Going solar can be a complicated process, especially when financing agreements are in place or if you have an older house.

• Solar equipment is expensive: Even with rebates and other financial incentives, the price typically starts between $10,000 and $30,000. It’s even more expensive if you want a solar battery for energy storage. Solar battery costs are generally between $7,000 and $18,000. Getting a solar battery might be strategic if net billing rates continue to decline in Montana. That way, you can store energy at home instead of tapping into the local grid when you need to.
• Potential roof leaks: The installation process involves drilling holes into your roof to anchor the panel mounting systems. If not done correctly, this can lead to leaks or structural damage, which will be expensive to fix.
• Energy production varies: Solar panels are dependent on weather conditions and seasonality. Solar panels still work on cloudy days, but less available sunlight does affect how efficiently they produce energy. Snow cover may also temporarily reduce efficiency until it's removed or melts off.

Benefits of solar panels in Montana

Generating your own electricity reduces your reliance on the grid while also lowering your carbon footprint.

• Better for the environment: Traditional energy sources like coal and natural gas release carbon dioxide and other harmful pollutants into the air. Solar panels generate electricity from sunlight, a clean and renewable energy source. Installing solar panels on your roof helps the environment primarily by reducing greenhouse gas emissions and dependence on fossil fuels.
• Higher home resale value: Installing solar panels can significantly increase a home's value. According to the study mentioned above, houses with solar panels sell for 4.1% more on average. The exact increase in value varies by location, with homes in active solar markets sometimes seeing even higher boosts.
• Cheaper energy bills: The average homeowner in Montana uses quite a bit of power, which adds up to a lot of savings when you switch to solar. Going solar now means that your monthly energy expenses will be more predictable (and very often significantly lower). Solar panels also protect you from future energy cost increases.

» MORE: Solar energy pros and cons

Find solar companies in Montana

A good solar company helps you navigate local incentives, permitting and net metering policies. Compare our picks for the top solar companies in Montana to learn more.

Bottom line: Is going solar in Montana worth it for you?

Going solar in Montana might be easier than you think. The main obstacle to going solar is the high upfront cost of purchasing and installing solar panels, inverters and other equipment. For a lot of homeowners, it ends up being worth it as long as their cost savings over time outweigh the initial investment. Others are happy to go solar for the environmental benefits alone. Montana ranked as the 25th best state for solar in 2024.

Solar costs vs. savings: Montana and nearby states