Montana Solar Incentive Programs

---

Montana experiences a diverse climate with around 200 sunny days annually, providing a reasonable amount of sunlight for solar energy initiatives. While it may not have as many sunny days as some other states, Montana’s weather conditions still present opportunities for viable solar power projects. The state offers a variety of solar incentives and rebates to help residents save money on their solar energy systems. Here are some of the incentives available to Montana home and business owners:

Residential Energy Efficiency Rebates:

The Home Efficiency Rebate Program provides rebates for energy efficiency improvements based on the percentage of energy savings of the whole-house project. Eligible costs may include a combination of energy saving measures such as appliance and HVAC system upgrades, adding insulation, air sealing, and associated electrical panel and/or wiring upgrades. The Home Efficiency Rebate Program will require applicants to demonstrate savings by comparing energy consumption before and after the energy conservation project.

The Home Electrification and Appliance Rebate Program provides point-of-sale rebates for stand-alone home electrification and energy efficiency upgrades. Upgrading to high-efficiency electric appliances, HVAC system efficiency improvements, adding insulation, air sealing, ventilation, and upgrading in-home electrical panels are all examples of measures that may be included in Montana’s Home Electrification and Appliance Rebate Program.

Federal Incentives

Federal Investment Tax Credit (ITC)

Commercial solar energy systems 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. 

Incentive and Rebates

Montana offers a 35% tax credit to residential, commercial, and industrial customers. There is also an additional $500 credit for residences. For solar production and manufacturing facilities there is 50% tax abatement for 15 years, and an additional corporate tax reduction for 10 years for generating facilities. The Inflation Reduction Act authorized funding for two distinct home energy rebate programs:

1) The Home Efficiency Rebate Program

2) The Home Electrification and Appliance Rebate Program.

Both home energy rebate programs will be administered through Montana’s Energy Bureau at the Department of Environmental Quality. The Home Efficiency Rebate Program provides rebates for energy efficiency improvements based on the percentage of energy savings of the whole-house project. The Home Electrification and Appliance Rebate Program provides point-of-sale rebates for stand-alone home electrification and energy efficiency upgrades.

Net Metering:

Solar energy systems under 1 megawatt (MW) in size are eligible to participate in net metering, which allows you to send your extra electricity back into the grid and get credits on your electric bill. When your panels aren’t producing all the electricity you need, you can use your credits instead of having to pay for electricity from your utility.

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