Idaho Solar Incentive Programs

13 yr
Avg. payback
$850/yr
Avg. annual savings
None
State tax credit
net billing
Net metering rate
Federal tax credit update: The 30% residential solar tax credit (Section 25D) ended for systems whose installation was completed after December 31, 2025, under Public Law 119-21. Systems whose installation was completed in 2025 can still claim it on a 2025 return. New 2026 installations do not qualify for homeowners who buy. What changed
Idaho Power Net Billing Alert, Idaho Power switched from net metering to net billing (Jan 2024). Average export credit: ~4.27¢/kWh, well below retail. Avista territory retains full 1:1 net metering.

Your Utility Determines Everything

Idaho's solar economics split sharply by utility. Which utility serves your home is the single most important factor in your solar decision.

Best for Solar
Avista Utilities
Northern Idaho: Coeur d'Alene, Sandpoint, Moscow, Lewiston
Compensation type 1:1 Net Metering
Export credit rate Full retail rate
System size cap Up to 100 kW (Schedule 63; 1.52 MW program cap)
Annual reset March 31
Net Billing (2024+)
Idaho Power
Southwest/Central Idaho: Boise, Twin Falls, Idaho Falls
Compensation type Net Billing (avoided cost)
Annual avg export credit ~4.27¢/kWh
Vs. retail rate (~12¢) ~36% of retail
Rate frozen through 2028

Idaho Power Net Billing, How It Works

Idaho Power converted from net metering to a net billing system on January 1, 2024 (IPUC Order No. 36048, Case IPC-E-23-14). Under net billing, exported solar energy earns the utility's time-of-use "avoided cost", not your retail rate. The Idaho PUC set new Export Credit Rates (ECR) effective October 1, 2025 via Order No. 36785, reducing rates by an average of 31% and freezing them through 2028 (no annual adjustments until then).

Idaho Power Export Credit Rates (ECR), Effective Oct. 1, 2025, frozen through 2028
Summer On-Peak (Jun to Sep, 3pm to 9pm) 15.68¢/kWh
Retail Rate (approximate) ~12¢/kWh
Summer Off-Peak (Jun to Sep, all other hours) 3.39¢/kWh
Non-Summer (Oct to May, all hours) 2.90¢/kWh
Annual weighted average ~4.27¢/kWh

Why summer on-peak is high but the average is low: Peak solar production occurs during summer on-peak hours (when you earn 15.68¢), but Idaho Power's net billing structure means much of your exported energy flows off-peak or in winter, earning only 2.90 to 3.39¢. The practical impact: only about 36% of what you'd earn with full retail net metering.

Period Old ECR (pre-Oct 2025) New ECR (Oct 2025+) Change
Summer on-peak 17.49¢ 15.68¢ minus 1.80¢
Summer off-peak 5.65¢ 3.39¢ minus 2.26¢
Non-summer (all hrs) 4.84¢ 2.90¢ minus 1.94¢
Annual average 6.18¢ 4.27¢ minus 31%

Source: IPUC Order No. 36785, September 30, 2025 (Case No. IPC-E-25-15). Rates frozen; next review 2028. Note: Solar advocates appealed Order 36785 in October 2025; the appeal was pending as of our last update.

Idaho State Incentives

Residential Alternative Energy Tax Deduction
Up to $20,000 deducted over 4 years (max $5,000/year)
Idaho Code § 63-3022C allows homeowners to deduct solar system costs from Idaho taxable income: 40% of cost in Year 1 (capped at $5,000), then 20% per year in Years 2 to 4 (each capped at $5,000). This is a deduction, not a credit, the actual tax saved is modest.
Idaho State Energy Loan Program
Up to $40,000 at 3%, 5%, or 7% interest (3, 5, or 7 year terms)
Idaho's Office of Energy and Mineral Resources (OEMR) offers low-interest financing for renewable energy systems. Available to Idaho residents; applies to solar PV installations. Contact OEMR at oemr.idaho.gov for current availability and application details.
Avista 1:1 Net Metering
Full retail credit, annual reset March 31
Avista Utilities customers receive a kilowatt-for-kilowatt credit for exported energy, for systems up to 100 kW, while the 1.52 MW program cap remains open. Surplus credits are settled annually (March 31), excess energy reverts to Avista with no cash payout. If you're in Avista territory, this is one of the best NEM programs in the Northwest.
No
Federal ITC (Section 25D)
EXPIRED, No credit for systems installed in 2026
The 30% federal Residential Clean Energy Credit expired December 31, 2025. Systems whose installation is completed on or after January 1, 2026 do not qualify. A final-year system completed by December 31, 2025 would still qualify on the 2025 tax return.
Not Available in Idaho
State income tax credit for solar (only a deduction)
Statewide property tax exemption for residential solar
Sales tax exemption for solar equipment (6% Idaho sales tax applies)
Utility rebates (no statewide rebate program)
Note: Idaho Code § 63-602W property tax exemption applies to commercial energy producers only, not residential homeowners. Always verify with your county assessor.

The Deduction: What It Actually Saves

The Idaho Residential Alternative Energy Deduction reduces your taxable income, not your tax bill directly. The savings depend on your Idaho marginal tax rate (top rate: 5.3%).

Example: $25,000 Solar System, Idaho Deduction Value
Year 1 deduction (40% × $25,000, capped at $5,000)$5,000
Year 1 tax savings at 5.3% marginal rate$265
Year 2 deduction (20% × $25,000 = $5,000)$5,000
Year 3 deduction (20% × $25,000 = $5,000)$5,000
Year 4 deduction (20% × $25,000 = $5,000)$5,000
Total deductions over 4 years$20,000
Total Idaho tax savings at 5.3%~$1,060

Compared to a 30% ITC on a $25,000 system ($7,500), the Idaho deduction saves approximately $1,060 total, about 14% as much. The deduction requires Idaho taxable income sufficient to absorb it each year.

Estimated Payback Periods

Based on a typical 7 kW residential system with state deduction savings. Idaho has excellent sun resource (Boise: ~5.6 peak sun hours/day) but low electricity rates.

Avista Territory (Northern Idaho)
~16 to 17 yrs
Full retail NEM, ~$11¢/kWh retail rate. Net cost after deduction savings: ~$20,000. Annual benefit: ~$1,200. Less solar radiation than Boise.
Idaho Power Territory (SW/Central Idaho)
~18 to 20 yrs
Avg 4.27¢ export credit, ~12¢ retail. Net cost after deductions: ~$20,000. Annual benefit: ~$1,050. Better sun but poor export rate hurts.

Estimates assume: 7 kW system, $3/W installed ($21,000 pre-deduction), 60% self-consumption / 40% export, no battery storage, flat utility rates. Idaho Power territory assumes average ECR across all hours. Actual payback depends on your usage profile, system size, and whether export timing aligns with on-peak hours. Get quotes from licensed Idaho installers for a site-specific analysis.

Idaho State Energy Loan Program
Idaho's Office of Energy and Mineral Resources (OEMR) offers low-interest loans for residential solar and other renewable energy installations. Key terms:
  • Loan amounts up to $40,000
  • Interest rates: 3 to 7% depending on term selected
  • Terms available: 3, 5, or 7 years (3%, 5%, or 7% interest respectively)
  • Available to Idaho residents with qualifying solar projects
  • Contact: oemr.idaho.gov/loan-program for current application status

Loan availability and rates may vary. Verify current program status at oemr.idaho.gov before planning your project around this financing.

Who Should Consider Solar in Idaho?

Idaho solar makes the most sense for:
  • YesAvista customers in northern Idaho, 1:1 net metering at full retail gives you the best solar economics in the state. Coeur d'Alene, Sandpoint, and Moscow residents should get quotes.
  • YesHigh-consumption households in Idaho Power territory, If you use 1,500+ kWh/month, self-consumption savings at retail rates offset more of your bill even with a weak export credit.
  • YesBattery + solar for energy independence, Pairing solar with a home battery reduces grid reliance and eliminates the export credit problem by storing excess energy you use at night at retail rate instead of exporting at 2.90¢.
  • YesOff-grid or rural properties, Idaho's rural areas with expensive grid extension or generator costs benefit significantly from solar even before incentives.
  • YesLong-term homeowners planning 20+ years, The economics work over a 20-year horizon even in Idaho Power territory, especially as utility rates rise from current historic lows.
  • Idaho Power customers expecting quick payback, The combination of low electricity rates, weak export credit, and no major state incentives means 18 to 20 year payback timelines. Ensure this fits your plans.
Sources & Verification
  • IPUC Order No. 36785 (Sept. 30, 2025), Case IPC-E-25-15, Idaho Power ECR net billing rates, frozen through 2028: puc.idaho.gov
  • IPUC Order No. 36048 (Case IPC-E-23-14), Idaho Power net metering to net billing transition, eff. Jan. 1, 2024
  • Idaho Code § 63-3022C, Residential Alternative Energy Tax Deduction (40% yr 1 / 20% yrs 2 to 4, $5,000 annual cap)
  • OEMR (Office of Energy and Mineral Resources), Idaho State Energy Loan Program: oemr.idaho.gov
  • EIA residential electricity data (statewide Idaho average: 12.35¢/kWh, May 2026) via Idaho Business Review (Aug. 2026)
  • IPUC Docket AVU-E-25-09, Order No. 36767 (Sept. 25, 2025), Avista rate adjustments
  • Idaho Code § 63-602W, Business inventory exemption (not applicable to residential solar)
  • Idaho Tax Commission, Idaho income tax rate 5.3% top marginal
  • Section 25D, 26 U.S.C., Federal residential solar credit; ended for expenditures made after Dec. 31, 2025 per P.L. 119-21

Get quotes from Idaho solar installers

Local installers know the Idaho incentive landscape. Compare quotes and see exactly what you'd save with a system sized for your home.

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Incentives and rates change often and depend on your utility, location and tax situation. Confirm the details that apply to you with your utility and a licensed tax professional before you sign a contract.