Montana solar incentives, tax credits & 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, Montana residents can take advantage of the federal solar tax credit and state incentives that encourage clean energy adoption. Here’s everything you need to know about how to make installing panels more affordable in the Treasure State.
Solar panels typically cost $9,800 to $28,000 in Montana.
Jump to insightThe federal solar investment tax credit (ITC) is the best financial incentive for most Montana homeowners to buy solar panels.
Jump to insightMontana has a solar property tax exemption, so your property tax bill won’t go up if your solar panels increase the market value of your home.
Jump to insightMontana residents can get the full retail rate when they sell excess solar power to the local grid through net metering.
Jump to insightResidential solar panel incentives in Montana
The federal solar investment tax credit (ITC) is the most significant financial incentive for most homeowners buying solar panels in Montana. It reduces your federal income 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.
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 your tax bill to $12,000.
The ITC is nonrefundable, meaning you can only claim a credit up to the amount of tax you owe for the year. However, the credit rolls over to the next tax year if you don’t use the full amount.
Property tax exemption
Montana has a property tax exemption for homeowners who install solar power systems. Here's how it works: The added value to your home from the solar installation is 100% exempt from property taxes for 10 years. For single-family homes, this benefit is capped at $20,000.
It's a straightforward way to save on taxes while investing in renewable energy. To apply for this energy-generating property tax incentive, use Form AB-14. Small businesses and nonprofit organizations are also eligible.
Alternative Energy Revolving Loan Program
Montana’s Alternative Energy Revolving Loan Program (AERLP) gives loans for homeowners to install renewable energy systems, such as solar PV (photovoltaic panels) and EPA-certified low-emission pellet or wood stoves.
This program aims to make renewable energy more accessible by helping with upfront costs. The terms are clear and the interest rate is competitive for 2024:
- You can borrow up to $40,000
- Repayment terms extend to 10 years
- Interest rates are reviewed annually
- For 2024, the rate is set at 3.5%
Additional solar incentives in Montana
Check DSIRE for the most comprehensive source of information about solar incentives and policies in Montana.
| Incentive type | Amount | Eligible solar equipment | Applicable sectors | Administrator | |
|---|---|---|---|---|---|
| Corporate property tax incentive for generating facilities | Property tax reduction | Up to 75% | Solar thermal electric, solar photovoltaics, fuel cells using renewable fuels | Commercial, industrial | Montana Department of Revenue |
| USB renewable energy fund | Rebate program | Varies | Solar photovoltaics | Nonprofit, state government, federal government | NorthWestern Energy |
| Generating facilities corporate tax incentive | Property tax exemption | 100% for 5 years | Solar thermal electric, solar photovoltaics, fuel cells using renewable fuels | Commercial, industrial | Montana Department of Revenue |
| Alternative energy investment tax incentive | Tax credit | 35% | Solar thermal electric, solar photovoltaics, fuel cells using renewable fuels | Commercial, industrial | Montana Department of Revenue |
| Tax incentive for production and manufacturing facilities | Tax abatement | 50% | Solar water heat, solar space heat, solar thermal electric, solar thermal process heat, solar photovoltaics, solar pool heating, fuel cells using renewable fuels | Commercial, industrial | Montana Department of Revenue |
What to know about net metering in Montana
Net metering is a system of give-and-take between you and your utility company. It lets you access power from the grid when your panels don’t generate enough electricity. It also compensates you for any solar electricity you send into the grid. In Montana, you earn credits when your system produces more electricity than your house uses. These credits roll over to future bills. In most cases, credits reset annually.
NorthWestern Energy (NWE), a major utility in Montana, limits net-metered systems to 50-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
How much are solar panels in Montana?
After considering the federal solar tax credit, solar panel costs in Montana typically range from $9,800 to $19,600.
Your system size greatly affects how much you pay overall. The typical system size for solar systems in Montana is 11.47 kW (kilowatts). You might need a larger or smaller system depending on your average household energy usage.
Average solar cost by system size in Montana
| 5 kW | 6 kW | 7 kW | 8 kW | 9 kW | 10 kW | |
|---|---|---|---|---|---|---|
| Before federal tax credit | $12,700 | $14,539 | $16,771 | $19,280 | $21,159 | $23,240 |
| After federal tax credit | $8,890 | $11,177 | $11,740 | $13,496 | $14,811 | $16,268 |
Solar resources in Montana
Below are some additional resources that can guide you through transitioning to solar in Montana.
Find solar companies in Montana
A good solar company helps you navigate local incentives, permitting and net metering policies. Compare our picks for Montana’s top solar companies to learn more.
| Company | Customer rating | Pro install | Payment options | Year founded | |
|---|---|---|---|---|---|
 | 3.4 | Yes | Cash, loan, lease | 1985 | Learn more |
 | 2.9 | Yes | Cash, loan | 2017 | Learn more |
 | 4.8 | Optional | Cash, loan | 2016 | Learn more |
 | 4.7 | No | Cash, loan | 2018 | Learn more |
FAQ
Can I get free solar panels in Montana?
No, but you can lease solar equipment with little to no upfront costs. Still, it’s not totally free. Leases generally require a flat monthly fee.
» FREE SOLAR PANELS: Are they really free?
How can I pay for solar panels?
You can pay cash, but most people finance solar panels with a solar loan. It works a lot like any other type of loan — there’s an application and approval process, and you pay it back over time (with interest). You also have the option of getting a lease.
» SOLAR PANELS: Lease vs. buy
Are solar panels worth it in Montana?
If your house is a good candidate for solar, it’s worth considering if you like the idea of lower monthly utility bills and more energy independence. Particularly, many Montanans seem happy with solar. In Montana, solar panels usually pay for themselves within 10 years. Over 25 years, homeowners with solar panels avoid $67,246 in utility costs on average.
But it doesn't work out for everyone. We suggest using the National Renewable Energy Laboratory'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.
How much can I save with solar panels in Montana?
On average, Montana homeowners with solar panels avoid $67,246 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 compared with paying traditional utility bills.
» EXPLORE: Where 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.
What has Montana’s investment in solar been so far?
Total solar investments in the state amount to $432 million, according to the Solar Energy Industries Association.
Bottom line
In addition to the 30% tax credit, Montana’s solar property tax exemption means that your property tax bill won’t go up if your solar panels increase the market value of your home. This is lucky, considering that Zillow estimates homes with solar panels sell for 4.1% more.
The ConsumerAffairs Research Team conducted an in-depth analysis to determine the average costs of going solar and incentives in other states. Turns out, it’s worth it for many homeowners in Montana.
Solar costs vs. savings: Montana 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 | $16,140 | $26,900 | 10.76 kW | $2.69 | $71,010 |
| Montana | $16,800 | $28,000 | 11.47 kW | $2.80 | $67,246 |
| North Dakota | $14,520 | $24,200 | 13.75 kW | $2.42 | $58,265 |
| South Dakota | $14,340 | $23,900 | 10.09 kW | $2.39 | $54,751 |
| Wyoming | $22,560 | $37,600 | 11.48 kW | $3.76 | $85,447 |
Article sources
- DSIRE, "Montana Programs". Accessed March 29, 2024.
- EnergySage, "“The cost of solar panels in Montana". Accessed March 29, 2024.
- Solar Energy Industries Association (SEIA), "Montana Solar." Accessed March 29, 2024.
- SolarReviews, "How much do solar panels cost in Montana, 2024?" Accessed March 29, 2024.
- Montana DEQ, “Alternative Energy Revolving Loan Program.” Accessed June 28, 2024.
