Even in Idaho, a solar system can save you quite a bit of your family budget. To save some money on solar panel installation, do it the smart way – take advantage of solar incentives in Idaho.
Key takeaways
- Want to make your home more energy efficient? Idaho is a great state for installing a solar energy system and producing your own electricity. And several federal and local renewable energy incentives and rebates that may include residential alternative energy, alternative energy tax, and state energy loans your solar panel system is eligible for make this plan even better, reducing the amount you need to pay for your business or residential system.
- Federal Tax Credit (ITC) provided by the Inflation Reduction Act is a 30% tax credit on the total quote of solar system installation. It covers panels, battery systems, and labor.
- Idaho State Tax Credit allows to deduct 40% of system cost from taxable income in the installation year, deduct 20% of system cost for the next 3 years. Maximum deduction of $5,000 per year, totaling up to $20,000.
- As for net metering service – there is no statewide policy, programs vary by utility company.
- Commercial solar systems benefit from zero property tax. Production tax of 3.5% of gross energy earnings applies to commercial systems.
- Low-Interest Energy Loan Program (Idaho Governor's Office of Energy Resources): Maximum loan: $15,000 (residential), $100,000 (other). 5-year term, 4% interest rate. Fees: $100 (residential), $250 (commercial). Secured by real property or equipment.
- Neighbors cannot prohibit or limit solar installation but can have reasonable appearance rules. Voluntary written agreements to ensure solar access all the time. Protects against shading.
Save 30% of your PV system cost with Federal Solar Tax Credit
The US government wants more people to go solar: it’s a modern and green way of getting energy. This is why the Solar Investment Tax Credit (ITC) program was developed. It allows American citizens to claim 30% of the cost of their installation as an income tax deduction. The cost here is not only solar panels, but also shipping, installation expenses and more. For example, if your system overall made you spend $10,000, the government returns you $3,000. To claim the ITC, complete all the necessary forms and submit them when filing your taxes.
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Idaho citizens can make use not only of the ITC program but of the State Tax Credit program as well. You can deduct 40% of your solar system cost (shipping and installation included) from the taxable income you got in the year of installation. Then you can keep deducting 20% of its cost for 3 succeeding years. The deduction, however, should not exceed $5,000 per year. Overall, this Idaho solar incentive allows you to save up to $20,000 of your salary from taxation.
You claim the deduction when you file your income taxes. Find all necessary forms at the Idaho State Tax Commission website. Idaho residents fill in Form 39R (look for “5. Alternative energy device deduction” in the Subtractions section) and then Form 40. Non-residents take Form 39NR and Form 43 afterward.
Join net metering program to cover your electric bills
The essence of the net metering program is the same across all the US. You sell the excess energy that your system generates into the commercial grid and gain credits to pay your own bills. However, in Idaho there is not a statewide policy for net metering: three main electric companies have different programs which they accord with the Idaho Public Utilities Commission.
Rocky Mountain Power sets the system capacity limit at 25 kilowatts for residential customers and small commercial installations, and at 100kW for others. Net excess generation (NEG) is credited at a retail rate for the owners of residential and small commercial systems. For others, NEG is credited at 85% of the non-firm energy rate. Credits can be carried over to the following month.
Avista Utilities program has a system capacity limit of 100kW. NEG is credited at a retail rate, but all the unused credits go back to the utility at the end of the year without any compensation.
Idaho Power sets the bar at 25kW for residential and small commercial systems, and 100kW for other clients. NEG is credited to the customer's next bill as a per kWh credit and carried forward indefinitely.
The net metering program is the main way to make money with your solar system. However, before joining in, you should contact your electric supplier for the latest rates and conditions.
Commercial solar is free from property tax but there is production tax
Commercial solar systems are exempt from property tax in Idaho: their cost is not included in the tax assessment. Instead, there is a production tax: solar energy producers pay 3.5% of gross energy earnings to the state. This makes taxes more gentle for small solar farms. The incentive applies only to commercial solar and doesn’t extend to residential systems.
Go solar easily with Low-Interest Energy Loan Programs
If you want to go solar, but aren’t ready for it financially, consider the Low-Interest Energy Loan program by the Idaho Governor's Office of Energy Resources. The maximum size of a loan is $15,000 for residential installations and $100,000 for others. They are issued for 5 years at a 4% interest rate, plus there is a $100 fee for home projects and a $250 fee for commercial ones. Loans are secured with real property or equipment and you get the money once your project is fully examined. Check a complete guide on applying at the Governor's Office of Energy and Mineral Resources website.
Solar easements help to settle debates with neighbors
Once you get the permit, it is legal to install solar panels on your house in Idaho. The Idaho solar law claims that your neighbors can't prohibit or limit you from going solar. However, they can impose reasonable rules about the appearance of panels. Plus Idaho citizens are welcome to voluntarily create solar easements to settle debates. An easement contract is designed to ensure the adequate exposure of a system to the sun. For example, if a tree in your neighbors’ yard has grown so high that it starts to overshadow your panels, the neighbors have to trim it.
Top 10 myths about solar
Let's talk about solar panels in a simple way and clear up some of the common wrong ideas people have about them. Knowing the truth will help you decide if solar power is a good choice for your home.
1. Myth: Solar panels only work when the sun is shining really brightly all the time
That's not quite right. Solar panels do work best when the sun is strong. But they don't need the sun to be super bright all day long. They make electricity from daylight, not just direct sunshine. So, even when it's cloudy, they can still make some power. Plus, the newest solar panels can even work a little better when it's cool outside. So, no matter if you live where it's sunny a lot or where it's often cloudy, solar power can still be helpful.
2. Myth: Putting in solar panels costs way too much money
It can seem like a lot of money to put in solar panels at first. But you need to think about the money you'll save over many years. The price of solar panels has gone down a lot lately, so they cost less now. Also, there are ways to get help paying for them. The government might give you money back or let you pay less in taxes. And, solar panels can make your electric bill much smaller, or even go away completely. Over the many years that solar panels last, usually 25 years or more, the money you save can be much more than what you paid to put them in. Also, if your system is connected to the power lines, you can sometimes sell extra power back to the electric company and save even more money.
3. Myth: You have to fix solar panels all the time
Solar panels don't need a lot of fixing. They don't have parts that move, so they don't break down very often. Usually, all you need to do is clean them now and then to get rid of dirt or dust that might block the sunlight. Often, the rain will clean them for you. And, the newest solar panels are made to handle bad weather, like hail, snow, and strong winds, so you don't have to worry about them breaking easily.
4. Myth: Solar panels will mess up my roof
If someone who knows how to do it puts the solar panels on your roof correctly, they won't damage it. Good workers use special ways to put the panels on safely and make sure no water can get in. Sometimes, solar panels can even help protect your roof from the weather.
5. Myth: Solar panels don't make enough power to be worth it
Solar panels are much better at making electricity now than they used to be. It's true they can't turn all the sunlight into electricity, but they can turn a lot of it. And scientists are always working to make them even better. This means solar power is becoming more and more useful for homes.
6. Myth: If I get solar panels, I won't need the electric company anymore
For most people, putting in solar panels means connecting them to the regular power lines. This lets you use electricity from the power company when your solar panels aren't making enough, like at night or when it's cloudy. And when your solar panels make extra power, you can often sell it back to the electric company. You would need very big and expensive batteries to store enough power to completely go off the regular power lines.
7. Myth: Putting in solar panels takes forever and is super hard
Putting in solar panels is usually not too hard, especially if you have people who know what they're doing to help you. From getting the papers you need to putting the panels on your roof and hooking them up to your house's electricity, it usually only takes a few days. Professional workers take care of all the complicated stuff.
8. Myth: Solar panels look ugly
Older solar panels might have looked big and not very nice, but the newest ones look much better. Many companies make solar panels that blend in well with different kinds of houses. You can also put solar panels on the ground if you don't want them on your roof.
9. Myth: If you rent your house, you can't use solar power
While people who rent usually can't put solar panels on their own roofs, they can still use solar power through programs where lots of people share a big solar farm. These programs let you pay to use some of the power from the big farm, and you get money off your own electric bill.
10. Myth: It's hard to sell your house if you have solar panels
Studies have shown that houses with solar panels often sell for more money and faster than houses without them. Solar panels are seen as a good thing to have, and they can make your house more attractive to people who want to buy it.
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SHOP SOLAR PANELSYears of experience in translation and a love of nature help Julia find the right words to encourage going solar. She joined the team in 2023 and is happy to make her contribution to a greener future.
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