Idaho Solar Incentives: Tax Credits & Rebates Guide (2022)

By Jon Jachura

Before installing a solar power system in your home, it’s important to look at the total system cost and how it will impact you. Unfortunately, solar installation costs are still quite high, averaging more than $22,000 for a residential system in Idaho. In our guide featuring the best Idaho solar incentives, we will provide the following:

  • Why solar installations make sense
  • Rebates to help you save money on your solar energy system
  • Tax incentives that can help make a solar system possible

Idaho is a relatively friendly solar state with a tax deduction that is state-specific and can save you a great deal of money on your personal income taxes.

Why Go Solar in Idaho?

Idaho currently ranks 27th in the nation for being solar-friendly. One of the things worth mentioning is that just a year ago, Idaho was ranked 35th in the country. This is a significant improvement in the energy loan programs and low-interest rates that Idaho is now offering homeowners. When looking at all of these impressive benefits, it may make you start to see more clearly why solar is so important.

A PV system or photovoltaic system will help make you less reliant on Idaho power providers and more self-sufficient. Many Idaho homeowners find that in addition to saving money on energy costs, they like the ability to be more self-sufficient or rely on utility companies to handle their energy needs.

Idaho Solar Cost

Solar costs have gone down slightly in Idaho over the last few years. Technology is improving, and the state tax credit makes a big difference in overall affordability. The state solar costs may not be in a range you feel entirely comfortable with, but when you look at all incentives combined, the numbers decrease considerably.

Solar costs will vary based on the size of your home and how much power is needed to control it. You can often get estimates as to how much power is needed in your home and what the total installation costs would look like for putting in a complete solar system.

Expect to pay anywhere from $16,000 to $30,000 for a typical residential installation in Idaho. Most homes are going to be right around the $20,000 mark. Remember that before you purchase a system in Idaho, it makes sense to look at all of the incentives so that you don’t miss out on one of the requirements and have a problem getting the savings you need.

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How Much Can You Save on Solar in Idaho?

Idaho residents are lucky because there is a federal tax incentive and a state tax incentive. In addition, companies like Rocky Mountain Power will offer net metering. This means that you won’t only save money the first year of your system being in place but as you continue to level with the solar panels in place. Homeowners can expect to save at least $5,000, if not more, on their solar energy system.

The Best Solar Incentives, Tax Credits, & Rebates in Idaho

The best solar incentive in Idaho is the combination of the state tax rebate with the Federal Solar Investment Tax Credit. We will provide the details on these programs and some local incentives to help you see why the push to solar power is such a smart move.

Incentive Summary End Date
Federal Solar Tax Credit (ITC) Idaho residents can take advantage of the Federal Solar Tax Credit and get a discount of up to 26% applied to their tax returns. If you purchase $20,000 worth of solar panels, you can get a credit for more than $5,000 on your next tax return. Remember, this does require you to come out of pocket first. December 31st, 2023
Net Metering Net metering allows homeowners that create excess energy to use it as a credit on their next electric bill. Although net metering is not mandatory in Idaho, many providers take advantage of it and offer fair rates. None
Commerical Loan Programs For government and commercial solar installations in Idaho, there are various programs to help improve overall rates and availability of funds. Some of these can help with loans up to $100,000. None
Residential Alternative Energy Tax Reduction The Residential Alternative Energy Tax Reduction is a program that allows homeowners to write off up to $20,000 of their solar system as a tax deduction. This program requires you to split up your deduction over several years, but it can be a very beneficial way to save money through the years on solar installation. None

Federal Solar Investment Tax Credit (ITC)

The Federal Solar Investment Tax credit is available in all 50 states, Idaho included. This program will give you a discount on your next federal tax return. The program is not set in place forever, and you will need to take advantage of this sizeable credit before it is gone.

The program allows you a tax credit of up to 26% of the cost of your solar installation. The solar system will need to be paid out of pocket and in full, with credit being returned and filed against any taxes you owe for that year.

It’s important to note that this Federal tax credit will drop from 26% to 22% in 2023. In addition to decreasing the total amount you can save, the bill is set to expire at the end of December 2023. The great thing about this credit is that it can be combined with state initiatives to ensure that you are saving from every angle.

If you don’t owe any money for taxes the year that you install the solar power system, this credit can continue for several years until you need to use the rebate.

Idaho Solar Energy Tax Credit

Idaho has a strong state-level program called the Residential Alternative Energy Tax Deduction. This allows payers to save up to 40% of the cost of solar, wind, and geothermal power installations in their home. This 40% deduction will be applied the year that you purchase and install your photovoltaic system, but then you can save an additional 20% for the three years following that.

The most you can save in one year is $5,000, and the total for four years is $20,000. This means that if you can wait for your money, you can end up getting almost all of what you paid for your solar system back. In addition, you will be able to combine this with your federal-level tax savings.

This is one of the stronger programs in the industry and one that is well worth considering.

Idaho Solar Sales Tax Exemption

There is no tax credit for a residential solar system purchase in the state of Idaho. This means that you will still be subject to the sales tax rate of 6.50% for all of your purchases towards your new solar power system.

Idaho Solar Property Tax Exemption

Property taxes will increase with the installation of a solar system in Idaho. Unfortunately, Idaho does not do much to help homeowners with these increasing costs. The rate at which your taxes will increase is typically not the full amount of the cost of the system, remember that you will also be getting a discount on your next income tax with the installation of these systems, but it still hurts to see the property tax increase.

Idaho Net Metering

Idaho net metering creates more energy than your home needs and supplies some of that energy back to the utility company or reserves it for a time that you need it the most. One of the great things about net metering is that it allows you to prepare for a cloudy day or a summer afternoon when you may want to turn down the air conditioner or turn up the heat.

The net metering program in Idaho is pretty good. The state does not mandate a certain amount of payment per kilowatt hour, and they don’t even require companies to offer net metering. However, Avista Utilities, Rocky Mountain Power, and others have strong net metering programs in Boise and throughout the rest of the state.

Idaho net metering is one of the incentives that is helping people become more interested in this solar energy process and its long-term savings.

Dominion Energy – ThermWise Residential Energy Efficiency Rebate Programs

The Dominion Energy Thermawise program tries to encourage individuals to use energy-efficient systems and appliances in their homes. This can include everything from a hybrid water heater to solar-assisted water heating. Each of the individual appliances and systems you will install is eligible for a different rebate.

Some of the solar initiatives will offer a credit of $750 or more. This is a great option for those that want that little bit of extra financial help when installing the system. Make sure that you double-check all requirements of this system before you sign up, as it could impact your eligibility after the fact.

Commercial Idaho Solar Incentives

The Commercial Idaho solar incentives are strong and will allow for a few extra benefits and loan programs that the residential programs do not offer. If a solar panel system could help your company or business with its green initiatives, Idaho is an excellent place to be.

Solar Incentives for Nonprofits and Businesses in Idaho

There are no specific solar incentives in the state of Idaho for nonprofit organizations. However, there are tax relief programs for nonprofits, and commercial incentives and loan funding programs apply to nonprofit businesses as well. In addition, property tax benefits are another critical incentive for Idaho non-profits to take a look at.

Property Tax Exemption for Wind, Solar, and Geothermal Energy Producers

The Property Tax Exemption for Wind, Solar, and Geothermal Energy products started in 2007. However, solar energy was not added to this until 2016. At this point, if you are producing solar energy, you do not have to pay property taxes for your commercial space, but you will have to pay 3.5% of gross energy earnings. This is still a tremendous reduction in out-of-pocket costs for solar energy producers.

USDA REAP Grant

The United States Department of Agriculture offers a REAP grant or Rural Energy for America program. This is in place to help you secure a loan for renewable energy resources. If you supply your contact information to the USDA, they will help ensure loan financing and grant funding for agricultural producers. The USDA REAP grand is a very straightforward process, but you must get connected with them from the start of your search.

Federal Solar Tax Credit for Businesses in Idaho

For a federal corporate income tax return, there is a 30% credit against the cost of any system that was placed into the building during that year. This credit is by far the best option when you are looking for large bulk savings in the state of Idaho. Most businesses have a tax burden at the end of the year, so they will often get their credit quicker than a residential tax return.

The Federal Solar Tax Credit is still one of the best ways to save money on solar energy, but these programs are set to expire before 2024. The rate of 30% savings is going down to 10% in 2023. Keep a close eye on the federal tax credit as it is one of the best options that Idaho residents have, but it won’t be around forever.

Idaho Commercial Net Metering

Net metering is also available at the commercial level for Idaho businesses and property owners. Net metering for commercial and governmental institutions not only helps with energy efficiency but can also make the building more sustainable and profitable long term.

Commercial net metering is not mandated by the state of Idaho, but there are good programs from some of the top energy providers. If you are interested in net metering, make sure to reach out to several companies to see what your options are. Large commercial solar panel installations can greatly impact the amount of solar power available in a city.

Low-Interest Energy Loan Programs

If you are interested in a low-interest energy loan, you can claim up to $100,000 of available funds through the Idaho low interest energy loan programs. Things like solar water heat, solar photovoltaics, geothermal energy, and even hydroelectric are all part of this loan program. It is important to sign up for this loan program prior to attempting to afford the solar panel system; if you don’t, the loan could be denied after the fact. Some residential customers have access to this loan, but the maximum amount is $15,000.

Dominion Energy – ThermWise Commercial Energy Efficiency Rebate Programs

The Dominion Energy Thermawise program is essentially the same as the residential program because it helps business owners save money on making their homes more energy efficient and greener. There are individual rebates for each upgrade you decide to use for your home. However, some are going to be more beneficial than others.

Some of the solar initiatives will offer a credit of $750 or more. Always check before purchasing your solar system to ensure that it is eligible for the upgrade.

Key Takeaways: The Best Idaho Solar Incentives

As more and more people become interested in solar panel installation, companies and states are working to create incentives to help with the incredibly high initial costs. These costs are difficult to justify for some, but in the end, the overall ability to create your own electricity is a tremendous benefit to being a home or business owner. The best advice we can give is to ensure that you take advantage of these incentives because they expire.

Idaho Solar FAQ

Is solar worth it in Idaho?

Solar is worth it in Idaho because there are so many incentives to make the program worthwhile. Idaho is not necessarily a leader in clean energy, but they are working on more and more programs to help you move away from having an electric bill and closer to producing all of your own energy.

How much does it cost for solar panels in Idaho?

A complete solar system for a home in Idaho will typically cost around $18,000 or more. Most homeowners will look into starting with a few panels and eventually building out a complete system. However, with the tax incentives on the state and federal level, expect to get a large portion of your investment back.

Can you get solar panels for free in Idaho?

Solar panels are not offered for free in Idaho. There are rebates from the federal government and the state of Idaho, but you will still need to pay for your entire system.

What solar rebates are available in Idaho?

Currently, the solar rebates in Idaho include federal rebates and state-level rebates. However, the federal rebates are set to expire in 2024, and unless there is some kind of change, it will be very hard to save money on your solar panel installation in the state of Idaho. Keep this in mind if you are currently searching and deciding if it’s time to invest.

How many homes in Idaho have solar panels?

There are only about 68,000 homes with solar panels in Idaho. As we mentioned, this state ranks 27th in the nation, so it still has some work to do to get to a more energy-efficient status, but the state-level tax incentives should start to help make a difference.

Do solar panels increase property taxes in Idaho?

Solar panels will increase property taxes in Idaho, and there are currently no incentives to decrease these taxes. However, if you are an owner of a commercial property, there are property tax exemptions for solar energy producers.

How much can you write off for solar panels on taxes in Idaho?

The current Federal ITC programs allow a 26% rebate on the total cost of the solar system. This 26% is being lowered to 22%. At the end of 2023, the program will end entirely. There is always a chance that a new bill will be implemented to keep the program going for quite some time.

House Method’s Solar Companies Rating Methodology

At House Method, transparency and trust are our most important values for the reader. That’s why we took the time to create an objective rating system and score each solar energy company/service according to our methodology.

Our research team dug deep into the fine print of contracts, combed through more than one hundred customer reviews, and thoroughly investigated all of each solar energy company’s services, costs, and products. We’ve done the homework for you by researching nearly all of the solar energy companies on the market so you can have the information you need to make the best choice for your home.

We developed a formula to objectively determine the best solar energy companies and give each a score out of 100 based on the following criteria:

Plan Options (30): Do they provide a variety of plan options? We looked at the number of plans each solar energy company offered and the flexibility of adjusting the plan.

Services offered (20): How many services are offered in each plan? We looked at whether the company manufactures its own solar panels, whether it contracts out installation, and what additional products each company offers.

Trust (10): What do customers say after their solar panels are installed? Does this company offer a guarantee? We considered how satisfied customers are post-service if the company does what it says it will, BBB accreditation, and service guarantees.

Prices (10): How reasonable are the costs of the plan or service in comparison to the industry average? We compared the costs of each company to competitors that offer the same solar energy services.

Unique perks (10): Does the company offer discounts or special services such as financial incentives, rebates, or a useful mobile app? We looked for extras each company offers that set them apart from the competition.

Customer Service (10): How is the customer experience when contacting the company? We considered the speed of response, weekend/holiday availability, and ease of communication through phone calls, email, and online chat functions.

Nationwide availability (10): How many states does the company offer its services? Companies that operate nationally and in all zip codes are favored over those with limited availability.

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