Montana Solar Incentives: 2025 Overview

A taxpayer may claim a credit of 30% of qualified expenditures, after deducting incentives, with no upper limit for a system that serves a dwelling unit located in the United States that is owned and used as a residence by the taxpayer. Expenditures with respect to the equipment are treated as made when the installation is completed. If the installation is at a new home, the “placed in service” date is the date of occupancy by the homeowner. Expenditures include labor costs for on-site preparation, assembly or original system installation, and for piping or wiring to interconnect a system to the home. If the federal tax credit exceeds tax liability, the excess amount may be carried forward to the succeeding taxable year. The excess credit may be carried forward until 2019, but it is unclear whether the unused tax credit can be carried forward after then.

In 1997, Montana established the Universal System Benefits (USB) program. The USB legislation requires all electric and gas utilities to establish USB funds for low-income energy assistance, weatherization, energy efficiency activities, and development of renewable energy resources. A typical NorthWestern Energy residential customer pays approximately $1 per month in electric USB charges. About $9 million is collected annually by NorthWestern, and about $1.2 million is used for renewable energy projects. Most renewable energy projects include a public education or demonstration component to increase awareness of renewable energy. Residential solar PV incentives are available at a fixed rate of $2,000 per customer. The smallest residential system size supported is 2 kilowatts (kW).

A taxpayer may claim a credit of 26% of qualified expenditures, after deducting incentives, with no upper limit for a system that serves a dwelling unit located in the United States that is owned and used as a residence by the taxpayer. Expenditures with respect to the equipment are treated as made when the installation is completed. If the installation is at a new home, the “placed in service” date is the date of occupancy by the homeowner. Expenditures include labor costs for on-site preparation, assembly or original system installation, and for piping or wiring to interconnect a system to the home. If the federal tax credit exceeds tax liability, the excess amount may be carried forward to the succeeding taxable year. The excess credit may be carried forward until 2020, but it is unclear whether the unused tax credit can be carried forward after then.

A taxpayer may claim a credit of 22% of qualified expenditures, after deducting incentives, with no upper limit for a system that serves a dwelling unit located in the United States that is owned and used as a residence by the taxpayer. Expenditures with respect to the equipment are treated as made when the installation is completed. If the installation is at a new home, the “placed in service” date is the date of occupancy by the homeowner. Expenditures include labor costs for on-site preparation, assembly or original system installation, and for piping or wiring to interconnect a system to the home. If the federal tax credit exceeds tax liability, the excess amount may be carried forward to the succeeding taxable year. The excess credit may be carried forward until 2020, but it is unclear whether the unused tax credit can be carried forward after then.

A taxpayer may claim a credit of 30% for the installation which was between 2022-2032 (Systems installed on or before December 31, 2019 were also eligible for a 30% tax credit), with no upper limit for a system that serves a dwelling unit located in the United States that is owned and used as a residence by the taxpayer. Expenditures with respect to the equipment are treated as made when the installation is completed. If the installation is at a new home, the placed in service date is the date of occupancy by the homeowner. Expenditures include labor costs for on-site preparation, assembly or original system installation, and for piping or wiring to interconnect a system to the home.

An income tax credit for individuals who install non-fossil fuel forms of energy including but not limited to wind, solar, and geothermal systems. The credit cannot exceed $500 per individual or $1,000 per married couple. Any remaining balance of the credit can be carried forward and applied to future income tax liabilities for a period of four succeeding tax years.