Welcome to the 2017 Idaho solar power information page!
Note: The numbers above are just estimates for a 5kW solar system, and your home is unique. The best way to know exactly how much money solar power can save you is to connect with one of our partners nearby. A friendly solar expert we trust will give you a buzz and help you craft a personal plan to get the absolute most out of a solar power system for your home. It's 100% free (yes, that’s right, 100% free) and you aren't obligated to buy anything.
From Lake Pend Oreille to the Sawtooth Mountains and Hell’s Canyon, Idaho has some truly unique natural beauty. Since there’s so much to see and do outdoors in Idaho, keeping the environment clean by using renewable power sources like the sun should be a top priority. Don’t forget about all those potatoes either; solar energy helps farmers too. How serious is the Idaho state legislature with solar power policies? Read on!
Questions? Our network of solar experts are on call to assist you. Simply sign up for personalized assistance on our special solar deals page.
Your guide to going solar in Idaho
We've designed this page to be a complete guide to the complicated and sometimes confusing process of installing solar panels on a home in Idaho. Since there's a lot of important information to consider, we've separated the page into sections to help you find what you are looking for. If you find this page useful, please share it with someone who might also find it interesting!
The Solar Strategy section is all about the various financial options you have in Idaho. We've created a tool that asks you a few questions about what you hope to get out of a solar purchase and recommends whether you should pursue a solar lease, loan, or outright purchase. Then, we give you a detailed picture of how each could work for you.
The Policy Information section contains all of our latest research on the rules set by the state legislature and public utilities commission that determines how easy it is to go solar in Idaho. These policies and rules govern everything from renewable energy mandates to whether you get paid retail or wholesale rates for the extra energy your system produces, and can have a huge effect on the viability of solar.
Finally, the Solar Incentives section lists all of the available financial benefits available to homeowners who go solar. This section includes information about money-back rebates and grants, tax credits, and tax exemptions. If you're looking for what Idaho is doing to make solar more affordable for its citizens, you'll find it here.
Click any of the boxes below to go to that section of the page, or scroll down to read the page in order.
|Your Idaho Solar Strategy|
|Comparing Solar Investment Options|
|Buying Solar in Idaho|
|Idaho Solar Loans|
|Smaller Solar Systems in Idaho|
|Solar Purchase Payback Time in Idaho|
|Idaho Solar Policy Information|
|Renewable Portfolio Standard (RPS)|
|RPS Solar Carve-Out|
Your Solar Strategy in Idaho
Figuring out the best way to go solar in Idaho can be a little daunting. From loans and leases to power-purchase agreements, there are a lot of options out there. To help you pick the one that might be best, we've created the handy decision tool below.
We'll ask you a few simple questions about you and your home. Once you're done, we'll recommend a good option. Further down this page, we provide cost estimates and example return-on-investment calculations for all the various options:
Compare the Return of Different Solar Investments in Idaho
The chart above shows the 25-year returns for an investment in solar whether you choose to purchase a system with cash or pay over time with a loan. Since economic conditions in Idaho don't allow for homeowners to get solar through a third-party agreement like a lease or Power Purchase Agreement, we included two different sizes of solar loans—one for people with a lot of equity, and one for people with just a little.
As you can see, the purchase option leads to the highest dollar-amount returns over time, but it also requires a big up-front investment. If you take a home equity line of credit (HELOC) or solar loan, though, your payments over 15 years will be more than your savings, but you'll still come out thousands of dollars ahead in the end.
Read on to find out more about each option.
Buying Solar in Idaho
This is the best option in Idaho if you want solar and you've got the cash to spend. An outright purchase returns the most money over time, because you own the system from day one and reap all the benefits. That 30% Federal tax credit, combined with the state tax deduction and electricity savings bring your first-year costs way down.
In our example, you put down $21,250, but by the end of year 1, incentives and energy savings will erase a bunch of it. Over 25 years, your system will have produced almost $9,000 in income.
That might sound like a great deal of savings over the years, but it pales in comparison to the potential returns from other states. That's not because Idaho lacks sun—it's because the state has cheap electricity prices and no statewide rebates for solar. The internal rate of return on a solar investment here is just 4.3%, which is not as good as an investment in, sya, the stock market.
Net Present Value: -$2,107
Net Present Value (NPV) measures how good of an investment something is, compared to the best alternative. We use a 6% return to evaluate all solar investments, and Idaho's -$2,107 NPV on a 5-kW solar system means you'd be that much better off investing your money in stocks over 25 years than in Idaho solar. But check out what happens to NPV if you buy the same system with a loan that you can pay back over time.
Here’s how the numbers pencil out for an Idaho solar purchase with a 5-kW rooftop solar system:
- Installing a typical 5kW solar system should start at about $21,250. Don’t worry – even without state incentives, you can still knock a big chunk off the price right off the bat.
- Since the Feds calculate their incentive based on actual out of pocket costs, no state incentives means a bigger federal solar tax credit. Subtract $6,375 (30% of $21,250) for a new price of $14,875.
- After the tax credit, subtract Idaho's tax deduction savings. You can read more below about how this works, but what you need to know now is that it will save you $370 in the first year, reducing costs to $14,505.
- Don't forget your first year’s energy savings, which we estimate to be about $643. That brings your cost after the first year to $13,862.
- By the time your system pays itself back in year 18, you’ll be seeing over $1,000 per year in savings until the end of your system’s life.
- When all is said and done, our 25-year estimate shows a total net profit of $9,228, with an internal rate of return of 4.3%. That's actually not bad compared to some investments, but you're probably better off with your money in an exchange-traded fund.
- On top of those returns, your home's value just increased by just about $15,000, too (your expected annual electricity savings over 20 years)!
- In addition to all that cash (and home value), you’ve created some green for the earth as well by not using electricity from fossil-fuels. In fact, the energy you’re not using has the carbon equivalent of planting 107 trees a year, every year your solar power system is humming.
Keep in mind, the numbers above are based on an average home in Idaho. If you're ready for a custom quote for a solar panel system, our network of experts are on call to assist you. Simply sign up for personalized assistance on our special solar deals page.
Solar Loans in Idaho
Usually this is the place where we tell you that taking a loan to pay for solar is a great idea. That's because it's usually true. High electricity prices around the country make a solar panel system into an income-generating asset.
The returns in Idaho are still pretty good, but they miss the excellence of the best solar states by a wide margin. The state enjoys some of the lowest electricity prices in the nation, and that means savings are a little slimmer.
Still, as you can see from the chart above, you'll start out with a big windfall, because even though you're not putting any money down, you get the Federal 30% tax credit for the whole installed cost of your system. Then, over the 15-year life of your loan, you'll be spending more than you're saving in electricity costs, essentially investing a total of about $8,800 until you pay the loan off.
But from there, it's up-up-up! After your loan is paid off, you'll be saving $1,000 or more per year in electricity costs from your fully-owned solar panels. You'll end up over $2,185 to the good after 25 years, which is great for an investment where you put nothing down!
Net Present Value: $-379
Net Present Value (NPV) measures how good of an investment something is, compared to the best alternative. We use a 6% return to evaluate all solar investments, and Idaho's $-379 NPV on a solar loan means you'd be that much better off investing your money in another investment over 25 years than in solar. But that $379 is so tiny, it seems almost a small price to pay for the beneifts of clean, reliable solar power.
Here’s how the numbers pencil out for an Idaho solar purchase with a solar loan or HELOC:
- Installing a typical 5-kW solar system should start at about $21,250. That's how big your loan will need to be to cover it.
- The electricity you'll save in the first year of operation would have cost $644, but your loan payments will total $1,886, for a difference of $1,242, or about $104 per month.
- That's not so bad when you consider your tax savings for the year will be $6,745! You'll come out $5,500 ahead in year 1, which should help ease the burden of loan payments for a few years, at least.
- When your loan’s paid off in year 15, you’ll start see over $1,000 per year in savings until the end of your system’s life.
- For our 25-year estimate, you'll see some decent returns, to the tune of $2,185, even after all the payments.
- And the future is going to look a little brighter, since your system will mean green for the environment. It'll be like planting 107 trees every year!
Keep in mind, the numbers above are based on an average home in Idaho. If you're ready for a custom quote for a solar loan, our network of experts are on call to assist you. Simply sign up for personalized assistance on our special solar deals page.
Small Rooftop Systems in Idaho
Let's say you don't have a ton of extra cash laying around, but you do have a bit of equity in your home. Can you get solar panels? YES! Is it a good idea in Idaho? Probably!
Here's the thing: electricity in Idaho is priced close to the cheapest in the nation. The way solar saves you money is by producing energy that you would have paid for. Trouble is, paying for solar with a loan costs just a little less than paying for electricity.
That means solar isn't the brilliant investment it can be in other states with high energy prices and cash-back incentives, but it might still be a good idea for you if you really, really want solar for environmental reasons. And it can mean a big windfall in year 1, because of tax savings.
Here are the factors we'll look at for this example:
- A 2-kW rooftop system that will cost around $10,200 installed.
- A solar loan or HELOC for that amount with a 10-year payback at 4.5% interest.
Just like with the big system, you don’t have to put any money down, but you still get the big federal tax credit for buying solar. You'll get 30% of your solar costs back as a tax credit and the energy bill savings will start right away. Your loan payments will be about $103 per month while your energy bill savings will be about $21—a difference of $82. Basically, for the cost of cable TV, you do your part to save the planet from carbon pollution, and make a little money later in your life, too.
Net Present Value: -$1,426
Net Present Value (NPV) measures how good of an investment something is, compared to the best alternative. We use a 6% return to evaluate all solar investments, and Idaho's -$1,426 NPV on a small solar system means you'd be that much better off investing your money in stocks over 25 years than in Alabama solar. So only go solar in Idaho if the environmental benefits are worth that much to ya.
Here’s how the numbers pencil out for an Idaho solar purchase with a small rooftop solar system:
- Installing a typical 2-kW solar system should cost about $10,200. Your loan should be for this amount.
- The electricity you'll save in the first year of operation would have cost $257, while your loan payments will cost $1,239.
- At the end of the year, the federal government will give you a 30% tax credit based on the up-front cost of your system. You'll also get a $148 credit from the state of Idaho. That's $3,208 that you won't owe this year. You can take the Federal credit over as many years as necessary if you don't owe that much in federal taxes this year, and you'll get another $148 state credit for each of the next 3 years, too.
- When your loan’s paid off after year 10, you’ll start to see over $300 per year in savings until the end of your system’s life.
- For our 25-year estimate, you'll actually end up with a tiny bit of savings! We're talking $372 after 25 years, which will help your old, wiser self appreciate your young, forward-thinking self.
- Your system will remove as much carbon from the air as planting 43 trees per year, which is a pretty great thing, we'd say.
Keep in mind, the numbers above are based on an average home in Idaho. If you're ready for a custom quote for a solar loan, our network of experts are on call to assist you. Simply sign up for personalized assistance on our special solar deals page.
Idaho Solar Policy Information
Ever wonder why solar seems to be everywhere in some states, but not in others? We did too.
State legislatures and public utilities commissions can enact rules to make solar power accessible for everyone. Favorable rules explain why some of the cloudiest states—New York, New Jersey, and Connecticut, are doing so well with solar, and yet some of those with the most natural solar resources—like Alabama, Mississippi, and Florida—are doing so poorly.
Below is important information about the public policy, rules, and economic reasons that affect your ability to go solar here in Idaho:
A Renewables Portfolio Standard (“RPS”) basically requires utilities in the state to source a percentage of energy from renewable sources by a given date. A strong RPS is important because it forces utility companies to promote conversion to renewable energy. That generally means free money for you in the form of solar power rebates and performance payments when you switch to solar.
Unfortunately, despite being one of the most productive states in the renewable energy game (thanks to hydroelectric), Idaho does not have any RPS at all, not even the voluntary targets we’ve seen in some nearby states that also lack true RPS mandates. No RPS generally translates to little or no solar incentives offered by the utilities, and unfortunately that’s the case here.
No utility incentives means a whole lot of missed opportunity, and wasted solar resources. The southern half of Idaho, in particular, gets a great deal of sun—as much as Florida—and could produce a great deal of clean solar power with the right programs to encourage homeowners like you to make the switch. A strong RPS would force the utilities to pick up a lot of the cost of providing those incentives here.
What's an RPS? Your state legislature paves the way for strong solar energy incentives to flourish by setting standards for renewable energy generation within their territories. Those standards are called the state’s renewable portfolio standard (RPS). If utility companies do not meet these standards, they must pay alternative compliance fees directly to the state. Many utilities then determine the best ways to source their energy from renewable sources that are less expensive than this fee.
An RPS is a mandate that says "Hey utilities! Y'all now have to make a certain percentage of your electricity from renewable sources. If not, you'll have to pay us huge fines." The consequences are good, because utilities usually try to meet these RPS standards by creating solar power incentives for you, the homeowner. Read more about Renewable Portfolio Standards.
RPS solar carve out
No RPS means no solar carve out.
What's a solar set aside? A solar set aside guarantees a specific portion of the overall renewable energy mix generated comes from the sun. For those states with progressive standards, high alternative compliance payments, and clear solar carve outs, the faster those areas become ripe for solar.
Some states have higher alternative compliance fees than others, and some states have more progressive alternative energy standards and deadlines than others do.
For instance, New Jersey has an overall RPS of 22.5% by the year 2021. That requires local utilities to source 22.5% of their energy mix from renewable sources by the year 2021. Pretty good. However, New Jersey also has a specific solar set aside of 4.1% by 2028. That’s the type of firm commitment which really gets the industry rolling forward. No wonder why New Jersey is one of the hottest solar markets right now!
Idaho Electricity Prices
Idahoans pay an average of 10 cents per kilowatt-hour (kWh) of electricity. That’s the lowest price in the region and even one of the lowest in the country (chalk it up to the state's beefy hydroelectric dams).
We know you like paying less now, but the long term costs of cheap electricity are through the roof. All that cheap electricity is produced by building massive dams, which are often criticized for damaging nearby ecosystems. The reservoirs required for these large-scale projects eat up sizable areas of biologically rich terrain and negatively affect both upstream and downstream environments. Make the clean and responsible decision with solar -- you can thank us later!
Why are electricity prices so important? Because that is what solar power is directly competing against. The cost to produce power with solar is relatively constant (of course how much sun hits your area has an effect), so if you are paying $0.40 per watt for power, then you make FOUR TIMES AS MUCH as the guy or girl paying $0.10 per watt electricity.
The caveat here is that if the $0.10 per watt person has a HUGE rebate, they may be better off than the $0.40 per watt person. Because of that, states without any renewable standards tend to be heavily reliant on cheap coal for electricity, and also have very low electricity prices. When electricity prices are artificially low, that hinders the ability of solar energy to achieve meaningful payback in the state.
Idaho Net Metering
Net Metering requires your utility to monitor how much energy your solar power system produces and how much energy you actually consume, and make sure you get credit for any surplus. It’s an essential part of strong solar policy, because it’s a big money saver for you. Idaho currently has no law requiring utilities to offer net metering, or governing interconnection (getting on the grid to get net-metered).
Despite not being required, all three of the state’s three investor-owned utilities — Avista Utilities, Idaho Power and Rocky Mountain Power — have independently decided to offer net metering programs. The framework of all three programs is similar. All of the programs limit individual system size, but those limits won't affect homeowners much.
All three programs also handle residential net metering the same way: all surplus energy produced is applied as a credit to your next month’s bill at the full retail rate. So for every kW extra you produce one month, you pay for one less kW the next. Avista specifies (sadly) that surplus credit reverts back to the utility without compensation after 12 months. Idaho Power and Rocky Mountain Power do not specifically address “rollover” limits or other annual surplus accounting policies.
What is net metering? Net metering is the billing arrangement where you can sell excess electricity back to your utility for equal the amount you are charged to consume it. The more customer friendly net metering policies, the higher the grade.
The grade here specifically reflects individual solar system capacity, caps on program capacity limits, restrictions on “rollover” of kWh from one month to the next (yep just like cell phone minutes), metering issues (like charges for new meters), Renewable Energy Credit (REC) ownership, eligible customers and technology (the more renewables the better), being able to aggregate meters across the property for net metering, and safe harbor provisions to protect customers from solar tariff changes.
Idaho Interconnection Rules
While things look pretty standard on the net-metering front, there are fragmented policies in terms of how easy it is to connect to the grid which vary from utility to utility. Idaho could benfit from uniform standards, which would come as a directive from the state capitol.
Regardless, here are the Idaho big three’s interconnection policies:
Interconnection rules are a little technical, but they basically allow you to “plug in” to the electric grid with solar panels on your roof. The more complex, out of date, or nonsensical the state rules are for plugging into the grid, the lower the grade.
Specifically, the grade reflects what technologies are eligible, individual system capacity, removing interconnection process complexity for smaller systems, interconnection timelines and charges, engineering charges, prohibiting the requirement of unnecessary external disconnects, certification, spot interconnection vs. wide area interconnection, technical screens, friendliness of legalese, insurance requirements, dispute resolution, and rule coverage.
Solar Incentives in Idaho
Idaho Solar Power Rebates
Idaho lacks any utility rebates for solar power. This is a direct result of the lack of an RPS. With an RPS in place, and the accompanying penalties for utilities that fall short of RPS goals, you can bet the utilities would start offering incentives to switch to solar power. How do we know? Because it’s worked everywhere else. RPS’s inevitably spur the creation of incentives that are cheaper for the utility companies than the penalties of the RPS.
How do solar rebates work? Similar to getting a rebate card from your local big box store for a dishwasher purchase, state legislatures also provide rebates for solar panel purchases to spur on investment and create new jobs. If you purchase the solar panel system yourself, you qualify for this free cash, which many times is a lump payment back to you. Some solar installers like to take this amount directly off the total installed price, and they'll handle the paperwork for you to make things a lot less complex.
The availability of state and utility rebates were sourced from the Database of State Incentives for Renewables and Energy Efficiency. The better the rebates, the higher the grade.
Idaho Solar Power Tax Credits
$370/year for 4 years
With no utility incentives to speak of, we have to commend the legislature for stepping up with a pretty strong solar tax credit. The lack of utility incentives is the legislature’s fault for not passing an RPS, of course, but nevertheless, the personal deduction that Idaho has made available is a big step back in the right direction.
When you install a new solar power system in your home, you are entitled to a state income tax deduction for 40% of the cost of the project in the first year, and 20% each year for the next three years. The deduction comes off of your income that you pay taxes on, not your actual tax burden. With a maximum deduction from income of $5,000 per year and a state tax rate of 7.4%, you can expect to get back about $1,480 over the four years the tax credit can be stretched over. Cha-ching!
And of course, you Idahoans benefit from the 30% Federal Solar Tax Credit as well. There's no cap on the federal tax credit and you'll deduct that after you subtract your rebate. Sample calculations follow below -- keep scrolling!
About state solar tax credits: State tax credits are not technically free money. However, they are 'credits' and not 'deductions' which means that if you have the tax appetite to take advantage of them, then they can be a 1-to-1 dollar amount off your taxes instead of a fraction of the cost of the system. So that means they can be an important factor to consider. In certain circumstances, state tax credits can provide a very powerful incentive for people to go solar.
(Keep in mind, we are not tax professionals and give no tax advice so please consult a professional before acting on anything we say related to taxes)
The availability of personal tax credits for solar energy were sourced from the Database of State Incentives for Renewables and Energy Efficiency. The higher the tax credit amount, the higher the grade.
Solar Power Performance Payments
Idaho lacks any performance payments for solar power. As with Idaho’s (lack of) power rebates, this is a direct result of the lack of an RPS. With an RPS in place and the accompanying compliance fees for utilities that fall short of RPS goals, the utilities would start offering incentives to switch to solar power.
Explanation of performance payments: Performance payments represent a big chunk of the financial rationale for going solar, and in many instances they make your decision a wise one. For certain states, if you’ve got solar panels on your roof, not only will you be cutting your electric bill down to size, but you'll be getting paid additional cash from your utility company. Pretty awesome, huh? Not only are you generating electricity for yourself, freezing your own popsicles with sun, and feeling like you’re doing something smart for your children or any of the other 4 reasons people go solar, but you are getting PAID!
Utility companies are paying people with solar panels on their roofs because their states say they have to, otherwise they will pay a fee. Therefore, the payment amount to homeowners is typically a little bit less than the amount they would be billed for by the state. For states with these alternative compliance fees, Solar Renewable Energy Credit (SREC) exchanges have popped up. In the above chart, we outlined an estimate of yearly payments a homeowner might expect from the utility company for the SREC credits from their solar energy system.
Expected SREC payments were calculated by using the latest trade values in the SRECtrade database. The availability of feed-in tariffs were sourced from the Database of State Incentives for Renewables and Energy Efficiency. The higher the expected monthly payments, the higher the grade.
If you don’t know what an SREC is, or how they work, check out this great SREC video
Property Tax Exemption
With that handy solar tax credit in place, we can’t imagine how the other solar friendly tax policies slipped through the cracks. Both a property tax exemption and a sales tax exemption would save you money without ever actually removing a single dollar from the state’s bank account.
About solar property tax exemptions: Property tax exemption status is a pretty big factor when putting together your investment considerations. Many argue that solar power adds approximately 20 times your annual electricity bill savings (if you are owning the system and not leasing. Leasing still has a positive impact on the ability to sell your home though, in our opinion).
For many average-sized solar power systems on a house, that can mean $20,000 to your home value. (Edit April, 2014: Some companies, like Solar Mosaic, are starting to offer traditional style equity-based home loans for such a thing). An additional $20,000 in property tax basis in many states amounts to a big chunk of change owed back to the state. However, many states have complete exemptions from added taxes when you install solar on your home!
The availability of a property tax exemption for solar energy was also sourced from the Database of State Incentives for Renewables and Energy Efficiency. The stronger the tax exemption, the higher the grade.
Sales Tax Exemption
One of the simplest ways for the Idaho state legislature to encourage small scale clean energy adoption is to declare solar panel equipment exempt from state sales taxes as many other progressive states have done. Sadly, there is no such declaration.
What's the deal with solar power sales tax exemptions? When states give you a sales tax break on solar, we notice. You should too. State sales tax exemption status for the purchase of solar energy systems were sourced from the Database of State Incentives for Renewables and Energy Efficiency. Sales tax exemptions, if present, were all 100%. A handful of states are completely exempt from sales tax regardless, and therefore received ‘A’ grades by default (OR, DE, MT, AK, and NH).
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The consensus on Idaho solar power rebates and incentives
We’ve reviewed solar policy in a whole lot of states–all of them in fact–but we’ve never seen a state quite like Idaho before. No RPS, no utility backed solar incentives, heck, no mandatory net metering or interconnection standards! Virtually nothing, except for that mediocre Idaho solar tax credit. And at the end of the day, it’s really the money that talks. With a 16 year payback time frame, Idaho surely has a ways to go regarding its residential solar policy.