Solar Incentives in Idaho
Idaho homeowners who installed solar in 2026 have access to several state-level programs. The Idaho Residential Alternative Energy Tax Deduction allows taxpayers to deduct a portion of the cost of a qualifying alternative energy device from Idaho taxable income: 40 percent in the year the system is placed in service, followed by 20 percent annually for the three succeeding years, with deductions capped at $5,000 in any single taxable year. A property tax exemption under Idaho Code 63-602JJ removes qualifying solar electricity producers from standard property taxation, substituting instead a 3.5 percent tax on gross solar energy earnings. The Idaho Governor's Office of Energy and Mineral Resources administers a State Energy Loan Program offering low-interest financing up to $40,000 for residential renewable energy and efficiency projects. On the utility side, Idaho Power customers receive export compensation through a variable Export Credit Rate set under Idaho Public Utilities Commission-approved tariffs, while Avista Utilities offers net metering for systems up to 100 kW under its own Idaho tariff, with a $100 application processing fee. Export and bill-credit rates differ between the two utilities and can change with each rate case.
The federal landscape shifted significantly for new 2026 residential installations. The federal residential Clean Energy Credit under Internal Revenue Code §25D — which had provided a 30 percent credit — expired for systems placed in service after December 31, 2025, under Public Law 119-21. Homeowners installing solar in 2026 do not qualify for that federal credit, which materially lengthens estimated payback periods compared to prior years.
Idaho's residential electricity rate averaged approximately 13.01 cents per kilowatt-hour as of March 2026, up about 1.44 cents from the prior year. That rate increase modestly improves the value of self-generated electricity, but without the federal credit, overall economics depend more heavily on system cost, the state deduction, loan terms, and the applicable utility export rate.
Figures are verified as of June 2026 against official sources; programs and rates change with each legislative session and utility rate case. The Idaho State Tax Commission, the Idaho Public Utilities Commission, and the Idaho Governor's Office of Energy and Mineral Resources are the authoritative sources for current program details.
Federal credit update. The federal residential Clean Energy Credit (the 30% “solar tax credit” under §25D) expired for systems placed in service after December 31, 2025. New 2026 residential installs do not qualify; a 2025 install can still be claimed on a 2025 return (IRS Form 5695). What this means for 2026 →
Current solar incentives in Idaho
Residential Alternative Energy Tax Deduction
Idaho allows individual taxpayers who install an alternative energy device serving their Idaho residence to deduct part of the cost from taxable income: 40 percent of the cost in the year the device is placed in service and 20 percent per year for the three following years, capped at $5,000 in any one taxable year. Qualifying devices include systems using solar radiation, wind, or geothermal resources to provide heating, cooling, or electricity. A buyer of a home served by such a device may claim any unused balance of the deduction.
| Amount | Deduction of 40% of cost in year one plus 20% per year for three succeeding years; maximum $5,000 deducted per taxable year (up to $20,000 total). |
|---|---|
| Who qualifies | Individual Idaho taxpayers installing a qualifying alternative energy device (including solar) at their Idaho residence; purchasers of homes with partially claimed deductions. |
| Administered by | Idaho State Tax Commission |
Source: Idaho Code section 63-3022C Official source →
Property Tax Exemption for Wind, Solar, and Geothermal Energy Producers (Gross Earnings Tax In Lieu)
Idaho exempts the property of wind, solar, and geothermal electricity producers from property taxation under Idaho Code 63-602JJ. In place of property tax, producers pay a tax on gross energy earnings: 3.5 percent for solar energy producers and 3 percent for wind and geothermal producers, which is expressly in lieu of all other taxes on the producer's property. This applies to energy producers, not residential rooftop systems.
| Amount | Property tax exemption; replaced by a 3.5% tax on gross solar energy earnings (3% for wind/geothermal). |
|---|---|
| Who qualifies | Producers of electricity by means of solar, wind, or geothermal energy in Idaho. |
| Administered by | Idaho State Tax Commission |
Source: Idaho Code sections 63-3502B and 63-602JJ Official source →
State Energy Loan Program
The Idaho Governor's Office of Energy and Mineral Resources offers low-interest loans for energy projects on single-family homes in Idaho, including renewable energy installations such as solar, wind, or geothermal systems, as well as insulation, HVAC, lighting, weatherization, and window/door upgrades. Loans must be secured with real estate and are credit-evaluated by a partner financial institution. Applications are accepted first come, first served until the funding limit is met or December 31, 2026, whichever comes first; projects must be approved and funded before installation begins.
| Amount | Loans up to $40,000 at low interest; no initial application fee. |
|---|---|
| Who qualifies | Single-family homes in Idaho; loan secured by real estate; project approved before installation; properties over 45 years old require State Historic Preservation Office review. |
| Administered by | Idaho Governor's Office of Energy and Mineral Resources (OEMR) |
Source: program page Official source →
Idaho Power On-Site Generation (Net Billing)
Idaho Power, the state's largest electric utility, compensates customer generation through net billing: customers pay the retail rate for energy taken from the grid and are paid for exported energy at a variable Export Credit Rate (ECR) set under tariffs approved by the Idaho Public Utilities Commission. Residential customers are served under Idaho Schedule 6 (Residential Service On-Site Generation) and small general service under Schedule 8. Current ECR values will be maintained until Idaho Power proposes updates in an April 1, 2028 filing, with possible annual updates thereafter.
| Amount | Export Credit Rate varies and is published in Idaho Power's tariffs/FAQs; retail rate paid for all grid consumption. Rates subject to change through IPUC proceedings. |
|---|---|
| Who qualifies | Idaho Power customers with on-site generation under the applicable rate schedules (residential Schedule 6, small general Schedule 8; large general/irrigation limited to the greater of highest 12-month billing demand or 100 kW). |
| Administered by | Idaho Power, under Idaho Public Utilities Commission authority |
Source: Idaho Power Schedules 6, 8, 9, 19, 24 (on-site generation); program page Official source →
Avista Utilities Net Metering (Idaho)
Avista offers interconnection and net metering for customer-owned renewable generation systems up to 100 kW for its Idaho (and Washington) customers. Applications require a $100 processing fee, typically charged to the installer, and Avista commits to defined review timelines for application completeness and approval before installation may begin.
| Amount | Net metering bill credits per Avista's Idaho tariff; $100 application processing fee. |
|---|---|
| Who qualifies | Avista electric customers in Idaho with renewable generation systems up to 100 kW. |
| Administered by | Avista Utilities, under Idaho Public Utilities Commission authority |
Source: program page Official source →
Compare solar incentives across all states → · Check what applies to you →
Programs verified as of June 2026 against official state and federal sources (each cited above); refreshed quarterly as legislatures and utility rate cases change the rules. How we verify this data. This page is informational only — not tax or legal advice.