Solar Incentives in Montana
Montana homeowners who installed solar in 2026 have access to four active programs. The Nonfossil Energy Generation Property Tax Exemption, administered by the Montana Department of Revenue under MCA 15-32-102, excludes up to $20,000 of a solar system's appraised value from property taxation for ten years following installation. Montana's net metering statute requires NorthWestern Energy to interconnect customer-owned systems up to 50 kW and credit excess generation at a kilowatt-hour offset value carried forward to the next billing period; unused credits are forfeited annually, and export rates vary by utility and rate case. The Montana Department of Environmental Quality's Alternative Energy Revolving Loan Program offers low-interest financing at a fixed 3.5 percent (4.023% APR on a representative loan) for solar photovoltaic and solar thermal systems, with loans up to $40,000, terms up to ten years, no down payment, and a modest origination fee. Owners of commercial, industrial, agricultural, or multifamily properties of five or more units may also access Commercial Property-Assessed Capital Enhancements (C-PACE) financing repaid through property tax assessments under local district programs.
The federal picture changed significantly for 2026 installs. The residential Clean Energy Credit under Internal Revenue Code §25D — commonly called the 30% federal tax credit — expired for systems placed in service after December 31, 2025, under the One Big Beautiful Budget Act (Pub. L. 119-21). Homeowners who install a new residential solar system in 2026 do not qualify for that credit, which materially lengthens the payback period compared to recent prior years.
Montana's residential electricity rate averaged approximately 13.48 cents per kilowatt-hour as of March 2026, up roughly 1.55 cents from the prior year. That rate increase modestly improves the value of energy offset by a solar system, but without the 30% federal credit, overall payback timelines are longer than they were for 2025 and earlier installations. Homeowners should model current utility rates and applicable program terms carefully when evaluating economics.
These figures are verified as of June 2026 against official sources; programs and rates change with each legislative session and utility rate case, and the Montana Department of Environmental Quality, Montana Department of Revenue, and Montana Public Service Commission 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 Montana
Nonfossil Energy Generation Property Tax Exemption
Montana exempts part of the appraised value of a capital investment in a recognized nonfossil form of energy generation (as defined in MCA 15-32-102, which includes solar photovoltaics) from property taxation for 10 years following installation. The exemption covers up to $20,000 of value for a single-family residential dwelling and up to $100,000 for a multifamily residential dwelling or nonresidential structure. Homeowners apply through the Montana Department of Revenue.
| Amount | Exemption of up to $20,000 of appraised value (single-family residence) or $100,000 (multifamily or nonresidential) for 10 years after installation. |
|---|---|
| Who qualifies | Owners of single-family residences, multifamily dwellings, or nonresidential structures in Montana with a capital investment in a recognized nonfossil energy generation system, including solar. |
| Administered by | Montana Department of Revenue |
Source: MCA 15-6-224 (Montana Code Annotated 2025) Official source →
Montana Net Metering
Montana statute requires the regulated electric utility (in practice NorthWestern Energy) to interconnect customer net metering systems of up to 50 kW that use solar, wind, or hydropower, are located on the customer's premises, and primarily offset the customer's own electricity use. Excess generation in a billing period becomes a kilowatt-hour credit on the next bill; any credits still unused at the end of the customer's designated 12-month period (beginning January 1, April 1, July 1, or October 1) are granted to the utility without compensation. The utility may charge the customer-generator only the same minimum monthly fee as other customers in the same rate class. Rural electric cooperatives are not covered by this part and set their own net metering policies.
| Amount | Kilowatt-hour credits at retail offset value carried to the following billing period; unused credits forfeited annually on the customer-designated anniversary date. |
|---|---|
| Who qualifies | Customers of a public utility (NorthWestern Energy) with on-premises solar, wind, or hydropower systems of not more than 50 kW intended primarily to offset the customer's own load. |
| Administered by | Montana Public Service Commission / NorthWestern Energy |
Source: MCA 69-8-601 through 69-8-603; net metering system defined at MCA 69-8-103(19) Official source →
Alternative Energy Revolving Loan Program (AERLP)
The Montana Department of Environmental Quality's Energy Office lends at low fixed interest for alternative energy systems — including solar photovoltaic and solar thermal — and for energy conservation measures installed in conjunction with such a system. The 2026 interest rate is fixed at 3.5 percent (4.023% APR on a representative $25,000 loan), with a maximum loan of $40,000, a maximum 10-year term, no application fee, and no down payment. Demand has exceeded available funds since April 2023, so applications are accepted quarterly (July, October, January, April) and are scored and ranked under ARM 17.85.111(5); projects may not be financed retroactively.
| Amount | Loans up to $40,000; 2026 rate 3.5% fixed (4.023% APR example); up to 10-year term; $0 down; origination fee of $250 or 2% of the loan, whichever is greater. |
|---|---|
| Who qualifies | Montana individuals, small businesses (100 or fewer employees), local governments, university system units, and nonprofits; project must be in Montana, not yet built, and meet codes and interconnection requirements; net metering systems are eligible. |
| Administered by | Montana Department of Environmental Quality, Energy Office |
Source: Program page; alternative energy system defined at MCA 15-32-102; ranking per ARM 17.85.111(5) Official source →
Commercial Property-Assessed Capital Enhancements (C-PACE)
Montana's Commercial Property-Assessed Capital Enhancements Act (enacted 2021, amended 2025) lets local governments create districts in which owners of commercial, industrial, agricultural, or multifamily (5+ unit) property finance renewable energy systems and energy conservation projects through assessments repaid on the property tax bill. Customer-sided renewable energy systems that generate electricity or reduce nonrenewable energy use qualify. The Montana Facility Finance Authority oversees the statewide program; financing is not available for single-family residences.
| Amount | Financing amounts and terms set per project under local district programs; repaid via property assessments. |
|---|---|
| Who qualifies | Record owners of privately owned commercial, industrial, agricultural, or multifamily (at least 5 units) real property in a local government district that has opted into the program. |
| Administered by | Montana Facility Finance Authority with participating local governments |
Source: MCA 90-4-1301 through 90-4-1308 (Commercial Property-Assessed Capital Enhancements Act) 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.