Idaho’s Key Solar Incentives: A Breakdown

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Idaho’s vast open landscapes and abundant sunshine make it an excellent location for solar energy adoption. While the state’s energy costs are relatively low compared to national averages, Idaho residents still have a growing interest in renewable energy solutions. To support this transition, Idaho offers several solar incentives that can help homeowners and businesses reduce the cost of solar installations and boost long-term savings. From federal tax credits to net metering and solar financing options, this breakdown will explore the key solar incentives available in Idaho and how they can benefit those looking to go solar.

The Residential Clean Energy Credit

The Residential Clean Energy Credit, previously known as the Federal Investment Tax Credit (ITC), can reduce the cost of your solar panel system by 30%. This incentive covers the entire system, including equipment, labor, permitting, and sales tax.

To claim this incentive, you need to purchase your system with cash or a solar loan, as leasing does not qualify for the ITC. You must have a sufficient federal tax liability to use the credit, though any unused portion can be rolled over year-to-year until the ITC expires at the end of 2034. Direct payment of the ITC is only available to tax-exempt entities, such as nonprofit organizations.

Net Metering 

As of January 1, 2024, Idaho transitioned from traditional net metering to a real-time net billing system for rooftop solar systems. This shift was approved by the Idaho Public Utilities Commission (PUC) in response to an application from Idaho Power Company, and it alters how solar customers are compensated for the electricity they generate.

Under the previous net metering structure, customers received a one-to-one credit for each kilowatt-hour (kWh) of electricity sent back to the grid, allowing them to significantly reduce their utility bills by offsetting their energy use. However, with the new real-time net billing system, compensation is no longer based on kWh credits. Instead, customers receive a financial bill credit for excess energy exported to the grid, with the credit value depending on the time of day the energy is sent.

The new export credit rate (ECR) for residential customers is expected to range from $0.048/kWh to $0.17/kWh, based on peak and off-peak hours. This rate will be updated annually starting in 2025. Currently, the average export credit is projected to decrease to $0.0596/kWh, down from the previous average of $0.088/kWh.

While Idaho Power argues that this new system better reflects the true value of exported solar energy, critics, including the Sierra Club, express concern that the reduced credits will make solar installations less financially attractive for homeowners. The shift could potentially harm local solar businesses, as the lower compensation may dissuade new solar customers from investing in rooftop solar systems.

Solar for All

• The Community Power Coalition (CPC)’s SFA program, “Powering America Together,” will collaborate with and enhance the impact of the US Department of Energy’s National Community Solar Partnership and Community Power Accelerator program. Led by Inclusive Prosperity Capital, Inc., CPC comprises seasoned community solar experts who have contributed to the Community Power Accelerator as developers, lenders, trainers, and technical assistance providers. 
• Teaming up with lead applicant GRID Alternatives, a coalition of ten mission-driven nonprofit solar and affordable housing providers and allies has collaborated to develop the Solar Access for Nationwide Affordable Housing Program (SANAH). SANAH is meticulously crafted to maximize benefits for households and communities while advancing equity, reducing harmful pollution, and combating climate change. The program offers a multitude of advantages, including expanded access to solar and storage for income-qualified households, significant energy savings and relief from burdensome costs, as well as additional benefits like efficiency improvements and electrification. 
• The Idaho SFA Program aims to extend the economic and environmental advantages of solar energy to low-income, tribal, and disadvantaged communities statewide. This initiative, shaped by community input, will tackle both market and non-market obstacles to residential solar adoption through comprehensive outreach, workforce training, and technical and financial aid.

Disclaimer

The information provided herein is for informational purposes only and is accurate as of the time of publication. Please be aware that the solar energy landscape, including technology, regulations, incentives, and market conditions, changes frequently. Therefore, it is essential to consult with qualified experts and professionals before making any decisions regarding solar energy installations or investments. This will ensure that you receive the most current and applicable advice tailored to your specific circumstances.