Idaho Solar Incentive Programs

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Idaho experiences a diverse climate with approximately 200 sunny days annually, providing a moderate amount of sunlight for solar energy initiatives. While it may not have as many sunny days as some other states, Idaho’s weather conditions still offer opportunities for viable solar power projects.The state’s solar incentive programs as given below are designed to encourage residents to adopt solar energy, contributing to a cleaner environment and energy independence.

Federal Incentives

Federal Investment Tax Credit (ITC)

Commercial solar energy systems installed in Idaho can take advantage of the Federal Investment Tax Credit 48E, which provides a tax credit of 30% of the total cost of the system, provided prevailing wage and apprenticeship requirements are met. 

Residential systems can no longer claim any federal solar tax credit, as the One Big Beautiful Bill eliminated it for systems installed after January 1st, 2026. 

Commercial Depreciation

Commercial asset owners can write off 100% of a project’s value in depreciation in the first year. The One Big Beautiful Bill reinstated the 100% bonus depreciation, while simultaneously eliminating the Modified Accelerated Cost Recovery System (MACRS) that previously depreciated solar energy systems over 5 years. 

The depreciable basis of a project is reduced by half of the ITC value when combined with the 30% ITC. Here’s a quick example:

• Project cost = $800,000
• 30% credit = $240,000
• Reduced depreciation basis: $800,000 – ($240,000 / 2) = $680,000

A company’s tax rate is then taken into account to calculate the exact amount they’re able to write off. 

Idaho’s Solar Panel Costs

The cost of solar installations in Idaho averages more than $22,000 for a residential system. However, with the available incentives, the net cost can be significantly reduced, making solar energy a viable option for many homeowners.

State-Specific Solar Rebates and Tax Credits

Idaho offers a state-specific tax deduction that can save residents a considerable amount on their tax returns:

• Residential Alternative Tax Deduction: Homeowners can deduct 40% of the cost of solar panel equipment and installation from their personal income taxes in the first year, and 20% each year for the following three years. The deduction is capped at $5,000 per year, or $20,000 total.

Net Metering and Low-Interest State Energy Loans

• Net Metering: While not mandated by the state, Idaho’s three large utilities—Rocky Mountain Power, Idaho Power, and Avista Utilities—currently offer net metering incentives to their customers. This program credits solar homeowners for the electricity their solar panels generate.
• Low-Interest State Energy Loans: The Idaho Governor’s Office of Energy Resources (OER) State Energy Loan Program offers low-interest loans for homeowners installing solar panel systems, allowing them to borrow up to $15,000 for five years at an interest rate of 4%.

Solar Easement Laws

Idaho allows residents to enter into solar easements with their neighbors to ensure continued access to sunlight, free from obstructions like tree growth or new structures. These easements are voluntary and help protect a homeowner’s investment in solar energy.

Further information and programs can be found at the Programs.Dsireusa.org