Idaho is an ideal location for solar panels, thanks to the state’s open skies and many sunny days. The state ranks 34th for solar energy, supplying power to an estimated 138,000 homes, according to the Solar Energy Industries Association (SEIA). The Gem State also has many solar incentives to make solar panel installation affordable, from net metering to tax exemptions and credits.
In this article, we’ll explore how you can save money by switching to solar power in Idaho. Use this guide to learn more about the available financial benefits for solar energy and decide if solar is a worthwhile investment for your home. Check out our guide on the best solar companies to help obtain these benefits.
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What Are the Solar Tax Credits and Rebates in Idaho?
Several solar tax credits and incentives are available to Idahoans. Here is a summary of the information we gathered from our research.
Idaho State Energy Loan Program
The Idaho Governor’s Office of Energy and Mineral Resources (OEMR) offers low-interest loans for homeowners installing solar panel systems. These loans allow homeowners to borrow up to $30,000 for up to five years. Interest rates vary by the loan’s length. These interest rates include the following:
- 3% for 36 months
- 5% for 60 months
- 7% for 84 months
The loans are first come, first serve, and five are available per region each year. Check the OEMR site to see which are still available in your area.
More resources: DSIRE page
Idaho State Solar Tax Deduction
This initiative, also from the Idaho OEMR, allows eligible individuals to deduct some of the costs of installing solar panels from their Idaho state income taxes. Specifically, it offers an income tax deduction of up to 40% of the installation costs of solar energy systems. This program applies to other energy efficiency home improvements, such as wind and geothermal technology.
Harnessing this incentive enables Idaho residents to reduce their tax burden while contributing to a cleaner and more sustainable energy landscape.
More resources: DSIRE page
Solar Easement Laws
This initiative, also from the Idaho OEMR, allows eligible individuals to deduct some of the costs of installing solar panels from their Idaho state income taxes. Specifically, it offers an income tax deduction of up to 40% of the installation costs of solar energy systems. This program applies to other energy efficiency home improvements, such as wind and geothermal technology.
Harnessing this incentive enables Idaho residents to reduce their tax burden while contributing to a cleaner and more sustainable energy landscape.
More resources: DSIRE page
How Does the Federal Solar Tax Credit Work?
The federal solar tax credit, known as the investment tax credit (ITC), is a significant incentive for Idaho homeowners considering solar energy. Available through 2032, the ITC allows you to deduct 30% of your solar installation costs from your federal taxes—this also includes stand-alone solar batteries with a minimum capacity of 3 kilowatt-hours (kWh).
If your solar system costs $10,000, for instance, you can claim a $3,000 credit on your taxes. The credit can roll over to future years if your tax liability isn’t high enough to cover it. However, you’re only eligible for the ITC if you own your solar panel system; leases or solar power purchase agreements (PPAs) don’t qualify.
Is Net Metering Available in Idaho?
Net-metering allows you to return excess energy from your solar panels to the power grid. When solar panels produce more energy than you consume, the surplus electricity goes to the power grid, and you receive solar renewable energy credits (SRECs) in return. You can apply these credits to your next electricity bill to save money.
Idaho doesn’t have a statewide net-metering policy. However, the state’s three big energy companies—Avista Utilities, Idaho Power, and Rocky Mountain Power—have developed net-metering programs that the Idaho Public Utilities Commission (PUC) has approved.
How Much Do Solar Panels Cost in Idaho?
The average cost of solar panels in Idaho is roughly $12,252 for a 5 kW system, according to EnergySage, which is below the national average of $16,129. Although upfront costs might seem daunting, various state-wide and local incentives help make solar energy more affordable. Additionally, you can expect the cost to decrease significantly by utilizing the federal solar tax credit (ITC), which can reduce purchases by $30%.
If you prefer to avoid the upfront expense of solar panels, there are various solar financing options to help reduce the burden:
- Cash purchase: Paying for solar panels is the most affordable and beneficial option if you can pay out of pocket. Your payback period is shorter, and you’ll benefit from the most savings over time.
- Solar lease: A solar lease service provides rental equipment, which makes it less expensive to go solar upfront. However, you’ll pay monthly rent for a longer time and won’t have access to tax incentives.
- Power purchase agreement (PPA): Like a lease, PPAs require you to make monthly payments to use solar equipment. Instead of paying a flat rate for installation and equipment, you’ll only be charged for your solar energy consumption.
Local solar installers and professionals will provide pricing estimates and evaluate which installation option or solar financing plan works best for your location and energy use.
The Process of Going Solar in Idaho
Here are the general steps you’ll take if you choose to switch to solar energy in the state.
- Consultation: Set up a consultation with a solar provider to assess your home’s solar potential and get a cost and savings estimate. This step helps you understand how much energy you can generate, how many solar panels you need, and how quickly you’ll see a return on your investment with your solar payback period.
- Survey: After signing a contract, the solar company will assess your home’s roof condition and energy needs to create a customized solar design. They’ll check for shading issues, roof orientation, and structural integrity to make sure your solar panel system’s efficiency is as high as it can be.
- Permitting: The company will handle the paperwork, including obtaining permits from your local government and approval from your utility company. Idaho’s straightforward permitting process is designed to make things as hassle-free as possible.
- Installation: Technicians will install your solar panels and other equipment, such as inverters and a battery storage system, on your property. This process usually takes one to three days, depending on the system’s size.
- Inspection: An inspector will assess your system for any electrical issues to confirm it’s safe for operation. This step ensures that your installation meets all safety and building codes.
- Activation: Once everything is approved, your utility company will install a net meter and connect your system to the grid. Net metering allows you to earn credits for the excess energy your panels produce.
- Solar monitoring: Monitor your system’s performance via an app or dashboard to ensure it functions optimally. Keeping an eye on energy production can help you catch any issues early.
- Maintenance: Schedule regular maintenance to keep your system in peak condition over its 25- to 30-year lifespan. Most systems require minimal upkeep, such as cleaning panels and checking connections.
Is Going Solar in Idaho Worth It?
Going solar in Idaho is worth it. The state boasts abundant sunlight and a range of incentives, including tax credits, rebates, and favorable net-metering policies. These incentives significantly offset installation costs and expedite your solar investment’s payback period.
Idaho’s commitment to renewable energy aligns with national goals, ensuring a stable and supportive solar landscape for years. The blend of financial advantages, environmental impact, and policy support makes going solar in Idaho a truly rewarding endeavor.
Our Conclusion
Based on our research, Idaho homeowners benefit greatly from going solar. The Gem State offers a worthy selection of solar financial incentives and legislation to help make solar energy system installation more accessible and affordable. This guide covers the most significant incentive programs, but smaller city- or municipality-specific incentives may be worth exploring. We recommend checking the Database of State Incentives for Renewables and Efficiency (DSIRE) for more information.
You should read our guide on the best solar companies in Idaho to find a local installer that matches your needs and can help you obtain the incentives listed here.
FAQs About Solar Tax Incentives in Idaho
Does Idaho allow net-metering?
Yes, Idaho’s three biggest utility companies offer net-metering and on-site generation tariffs to allow you to connect solar energy systems to the power grid and earn credits.
Can I pocket my solar tax credit?
No, the federal incentive doesn’t come as cash in your pocket. It’ll reduce the money you pay in federal taxes.
Do solar panels need maintenance?
Solar panels need minimal maintenance. Annual cleaning and checking for obstructions ensures efficiency.
Our Rating Methodology
We are committed to providing comprehensive and unbiased reviews to our readers. After over a thousand hours of research on solar companies, interviews with experts, and common customer needs, we’ve created a detailed rating system for solar providers based on six factors:
- Solar equipment, installation, and services (25%)
- Warranty and performance guarantees (25%)
- Brand reputation and certifications (15%)
- Financing options (15%)
- Experience (10%)
- Availability (10%)
Total scores are divided by 20 for a final 5-point rating scale.
