How to Save Money on Solar Panels In Montana

Montana flag behind solar panels. A woman's hand holds a toy house with solar panels on the roof

How to Save Money on Solar Panels In Montana

Montana may be famous for its mountains and wide-open spaces, but the state is also home to some of the best solar resources in the country. Homeowners can take advantage of affordable solar panel costs and a range of incentives to make the switch to renewable energy. In this article, we’ll show you how to save money on solar panels in Montana and tap into the sun’s power. Let’s dive in so you can start preparing a budget.

How to Save Money on Solar Panels in Montana: Overview

In Big Sky country, homeowners have access to some of the lowest-cost of solar panels in the country. However, with affordable rates on electricity, there’s little motivation to make the switch.

Fortunately, Montana offers a few incentives to consider solar energy. Between federal, state, and municipal benefits, residents of the Treasure State can save thousands on an installation. While regulations have been slacking over the past few years, there’s still promise. Let’s break these incentives down below.

Solar Panels in Montana: Federal Incentive

One of Montana’s first considerations for solar panels is the federal solar tax credit. This program offers a 30% return on all photovoltaics installed in 2023, including equipment, labor, and even sales tax. Those installing a 6kW system could cut the cost of a solar panel system in Montana by nearly $4,500.

To qualify for this program, you’ll have to meet a few requirements. First and foremost, It’s essential that you own your system, either through a direct purchase or a loan. You’ll also need to live at the house where the array is installed and the equipment must be new. Take advantage while it lasts, for the program ends in 2035.

Montana’s State Credits and Rebates

In some states, homeowners can take advantage of direct income tax credits or rebates to lower the up-front cost of solar installations. Montana used to offer a similar program, with residents having access to up to $1,000 for a new system. However, the Treasure State repealed the credit in 2021. While it’s a step backward, this recent program shows hope for future benefits in Montana.

In another direction, the Treasure State made grounds for securing its net metering law for the foreseeable future. Montana’s largest utility company, NorthWestern Energy proposed an end to paying residents for excess solar energy. However, the state’s Public Services Commission rejected the proposal and took preventative measures. Now, homeowners can rely on net metering credits until solar power reaches 5% of the state’s total energy generation capacity.

Solar Panels in Montana: Government Regulations

While Montana’s solar regulations are currently in the air, it’s good to see their existence. This is due to the state’s renewable portfolio standards (RPS). We use the RPS to determine the intended direction of solar energy in each particular area. 

Montana has a goal of reaching 15% renewables of all types by 2015. While it’s expired now, it helps us see where these old programs came from. Additionally, the RPS were slightly adjusted in 2017, meaning there’s still talk about updating them in the future.

Meanwhile, homeowners can still take advantage of Montana’s tax regulations. In addition to the statewide sales tax exemptions, residents with a solar panel system won’t have to pay extra property taxes with the increased value of their homes. This alone can save thousands of dollars over the course of the array’s lifetime.

Should Montanans Lease Solar?

This image portays a solar panel array in a field with mountains in the background.
Montanans could save $15,000 or more by switching to solar.

©Lari Bat/Shutterstock.com

In areas where the up-front cost of solar panels is too much to overcome, states will offer leasing options. While this is a good option for the eco-conscious consumer, it disqualifies the system from any exemptions, including the federal solar tax credit. 

Montana is one of the states that allow solar leasing. However, due to the meager cost of traditional electricity, there’s practically no financial benefit to doing so. Additionally, some utility companies want to enact fees on residents with solar panels. Therefore, it’s best to approach an installation through ownership or loans.

Solar Panels in Montana: Incentive Summary

Federal Tax Incentive30% credit
State Tax Credits / RebatesNone / none
Net MeteringNet metering credits per month
Renewable Portfolio Standard15% by 2015 (expired)
Property Tax Exemption100%
Sales Tax Exemption100%
Performance Payment ProgramNone 

Frequently Asked Questions

Do you actually save money going solar in Montana?

Although the price for electricity in Montana is incredibly affordable, homeowners that switch to solar panels can still take advantage of low equipment rates, great sunlight, and decent state-level support. Those that make the switch can save $15,000 or more by offsetting their electricity bill.

How long does it take for solar panels to pay for themselves in Montana?

With an average annual electricity bill of $1,219.08, homeowners in Montana could expect to offset the cost of a solar panel system in about 11.9 years. This is a couple of years longer than in some states.

How much do solar panels cost in Montana?

Residents of Montana can expect to pay about $2.42 per watt for solar energy. This equals about $14,520 for a 6kW system.

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