Last updated: December2024
Written by
Catherine Lane
You can save an average of $6,390 on the cost of installing solar panels in Montana with solar incentives. With tax incentives like the federal solar tax credit and a property tax exemption, you can keep more money in your pocket when you go solar.
These incentive savings don’t even include the electricity bill savings solar panels provide in Montana, which can help lower what you pay to your electric utility and reduce your carbon emissions. You can use our solar calculator to find out how much you can save in Montana with solar incentives.
This guide is a definitive resource on Montana’s home solar incentives. It will help you learn how to qualify, save, and apply.
Incentive | Estimated average annual savings | Eligibility | About |
|---|---|---|---|
Federal solar tax credit | $6,390 | All tax-paying U.S. citizens | Tax credit equal to 30% of installation costs, applied to federal income taxes |
Solar property tax exemption | $78 per year, varies by location, system, and property value | Montana residents installing solar and other renewable energy equipment to their homes | 100% exemption of value of renewable energy system from property taxes for 10 years, up to $20,000 |
Montana financing programs | No savings | Varies with program | There are a variety of solar financing programs providing low-interest solar loans to help Montana homeowners install clean energy systems |
Quick Facts
Value: 30% of solar installation costs
Frequency: One-time tax credit, rollover for five years
How to apply: File IRS Form 5695 with annual tax return
While Montana doesn’t have a statewide solar tax credit, residents can take advantage of the federal solar tax credit to help lower their solar costs. The federal tax credit, sometimes called the investment tax credit (ITC) or residential renewable energy credit, equals 30% of solar installation costs and directly reduces your income tax liability.
On average, a solar panel system in Montana will earn a tax credit of $6,390. Exactly how much you save with the solar tax credit depends on how much your solar power system costs, how many solar panels you install, and the solar company you choose.
The key thing to remember about the federal tax credit is that it lowers what you owe Uncle Sam, not the upfront cost of your solar energy system. You’ll see the savings when you file your taxes for the year.
If you finance your solar panels through a solar lease or power purchase agreement, you won’t get the benefits of the tax credit. If you use a loan, be aware that most solar loan providers require you to pay the value of the tax credit after 18 months to keep your payments low.
Quick Facts
Value: 100% of added property value from renewable energy system exempt from assessment
Frequency: Annually for 10 years
How to apply: Submit Form AB-14 to your local department of revenue
Solar panels have many benefits, one of which is increasing property value. While solar panels add value to your home, that also means your property taxes should increase.
Luckily, Montana legislation exempts the value of solar panels from property tax assessments for 10 years. So your house will be worth more with solar, but you don’t have to worry about higher property tax bills thanks to the solar property tax exemption!
According to SmartAsset, the effective property tax rate in Montana is about 0.70%. Based on the median home value and the estimated value solar panels add to a home, the solar property tax exemption can save Montana homeowners an average of $78 per year!
Montana has a few low-interest loan options to help homeowners with the upfront costs of solar installations and other energy conservation projects:
Alternative Energy Revolving Loan Program (AERLP) gives Montana's access to zero-down, low interest rate loans to install solar panels or make energy-efficient home upgrades. The program is managed by the Montana Department of Environmental Quality (DEQ).
Clearwater Credit Union Home Energy Loans are unsecured home solar loans to help make your solar project dreams a reality.
Helena Residential Energy Efficiency and Renewable Energy Loan Program provides residents of the city of Helena access to 0% interest loans to fund alternative energy projects like solar installations, geothermal systems, and solar water heaters.
You can also consider traditional solar loans from lenders, solar leases, power purchase agreements (PPAs) from solar companies. These solar financing options can help you make going solar fit into your budget.
Quick Facts
Electric rates average $0.14 per kWh in Montana
Montana utilities offer full retail net metering
Excess solar power is credited at the retail rate of electricity
Net metering is a method utilities use to bill customers who install solar panels. Under net metering, solar energy generated on your roof is used by your house first. When your solar panels produce more electricity than your home needs, it gets sent to the utility grid in exchange for a bill credit that can offset the cost of electricity you use from the electric company later.
These bill credits fully cover the cost of electricity and can reduce your energy costs to $0. Kilowatt-hour credits carry over from month to month, but any unused credits at the end of your billing year will be surrendered to the utility company with no compensation.
This is an excellent net metering program, and with the right solar system size you can see substantial energy savings and eliminate most of your electric bill. We say most because utilities like NorthWestern Energy still require you to pay a monthly customer charge that solar energy generation can’t offset.
If you are serviced by an electric cooperative or local electric utility company, full retail net metering may not be available.
Montana does not have any battery rebates or incentive programs for homeowners interested in energy storage. However, battery installations qualify for the federal solar tax credit, meaning you can get a tax credit equal to 30% of energy storage system installation costs.
A Tesla Powerwall battery costs about $15,000 fully installed, which would earn a tax credit of $4,500. The total tax credit will vary depending on the design of your storage system and the cost of installation.
Solar batteries provide backup power when the grid is down, but they won’t provide much in terms of extra financial savings in Montana. If you regularly experience power outages, a battery may be right for your home. It’s up to you if the peace of mind a battery provides is worth the upfront cost.
The average cost of solar panels in Montana is about $21,300 before incentives for an 7.1 kilowatt (kW) solar panel system. This is equal to about $3.00 per watt of solar installed. Once the federal solar tax credit is applied, the price drops to about $14,910 to install a solar photovoltaic system in Montana.
Federal tax credit: $21,300 x 30% = $6,390
Total savings: $6,390
Effective system cost: $21,300 - $6,390 = $14,910
Remember that the total amount you pay for solar energy will depend on the number of solar panels you need and the cost of your installation.
The combination of the federal solar tax credit and Montana’s full retail net metering program makes solar panels a great investment in Montana. Solar panels can pay for themselves in less than 12 years in Montana, meaning you’ll get over a decade of free clean energy to power your home!
To make sure you get the best deal on solar panels, you need to find a solar installer that you trust. While the cheapest quote might sound the best, you don’t want to sacrifice installation quality. That’s why our solar experts recommend getting at least three solar quotes. By comparing multiple solar quotes, you can ensure you’re getting the best installation at the right price. Finding an installer can seem overwhelming.
Don’t worry—SolarReviews can help with that. We can connect you with local, pre-vetted solar professionals, making your solar journey as easy as possible. We also have an extensive list of the best solar companies in Montana with real customer reviews to help you make the right decision for your home, so you can worry less about your high electricity bills and more about what matters.
Catherine has been researching and reporting on the solar industry for five years and is the Written Content Manager at SolarReviews. She leads a dynamic team in producing informative and engaging content on residential solar to help homeowners make informed decisions about investing in solar panels.
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