Idaho State Solar Power Rebates, Tax Credits, and Incentives

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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 should be a top priority. Don’t forget about all those potatoes either; clean energy helps farmers too. How has the state legislature taken up the issue of renewable energy? Read on!

STATE LEGISLATION
 In 2005, the Idaho legislature passed Senate Bill 1192, setting up a bond to fund independent renewable energy projects. This bill was a big step taken to encourage private utilities to develop solar and other clean power generation systems.
Also in 2005, the legislature passed House Bill 106, authorizing a sales tax rebate for the purchase of solar power generation equipment.

However, the going might get tougher, as Governor “Butch” Otter has gone on record with his preference of nuclear energy over solar and other renewable energies in 2007. Let’s hope the legislature can overpower the nuclear governor.

NET-METERING

In Idaho, net-metering is available to residential and small business customers of the three investor-owned utilities (Avista Utilities, Idaho Power, and Rocky Mountain Power) who generate up to 25kW of power. Each utility has it’s own rule as there is no statewide regulation, but all are similar in nature. Residential and small business customers get a credit at the retail rate toward their next month’s bill. The biggest limit to the plans is that system-wide net-metered capacity is set at 0.1% of peak generation from the year 2000.

STATE INCENTIVE PROGRAMS, UTILITY REBATES, UTILITY LOANS, AND UTILITY INCENTIVES

In 2005, the Idaho legislature approved Idaho Code Chapter 63, paragraph 3622QQ, which offers a sales tax rebate for the purchase of solar power and other renewable energy generation equipment. All systems capable of generating 25kW are eligible.
Chapter 63 also includes paragraph 3022C, which allows taxpayers to deduct 40% of the cost of a solar electricity system (or other renewable power generation systems). A taxpayer can take a 40% deduction in the first year, and a 20% deduction for each of the next 3 years (limited to $5,000/year – $20,000 total deduction).

Lastly, on a first-come, first-served basis, Idaho residents can apply for a rebate on the cost of a site assessment for a solar electricity system. This means that you can have the state pay $75 of the cost of having a grid-connected system designed, or $175 of the cost for a system off the electrical grid.

Check out these other rebates and incentives for renewable energy in Idaho:

Personal Deduction

* Residential Alternative Energy Tax Deduction

Private Grant Program

* BEF – Renewable Energy Grant

* BEF – Solar 4R Schools

Production Incentive

* Northwest Solar Cooperative – Green Tag Purchase

Sales Tax Exemption

* Renewable Energy Equipment Sales Tax Refund

State Bond Program

* Renewable Energy Project Bond Program

State Loan Program

* Low Interest Energy Loan Programs

State Rebate Program

* Idaho Solar Electric System Site Assessment Program

EXAMPLE 3KW SYSTEM – HOME INSTALLATION COST

Installing a 3kW solar electricity system in Boise (Ada county) would cost about $49,500. After state and federal tax credits, you would only have to pay $33,244. Since Idaho has a Great solar rating, you would generate more than enough electricity to pay for the system in about 20 years, with an average monthly usage of 1,300kWh at a rate of $0.0660/kWh. During that time, you could expect to save about $740 each year on your utility bills. More importantly, you could keep about 160 tons of greenhouse gasses out of the atmosphere. Here are a few more important details to consider from this estimate.

  • 550 square feet of roof area needed
  • $8,820 estimated property value increase
  • Estimated utility savings over 25 years of $18,505

CONSENSUS

Idaho has taken some important steps toward building a solar and renewable energy market. In the past couple of years, the state legislature has passed important tax incentives to support residential and small business installations as well as a bond measure that could help the energy industry move toward clean power. It’s not time to stop yet though; with all the sun that shines on Idaho, solar energy could become a serious part of the energy equation with continued promotion from the state capitol. Get Governor Otter off of the nuclear kick too. With solar power Idaho can grow, with nuclear it’ll just glow.

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3 comments.

Bob Klecha - Idaho County Solar, LLC
Comment on March 13th, 2008.

hello, ive been doing renewable energy in idaho for 25 years now, how do i get on your list of installers. also, i think you ought to take away another star from idaho’s effort in promoting solar in idaho. you have mentioned our governor and his preference for nuclear. also the $75 and $150 site assesment program is gone, has been for a while now. No program exists to license solar installers and to me the biggest issue is the small electric co-operatives, they have bad grid tie policies, and most people in remote idaho have co-opertives supplying thier power…last year it was posted in the local papers to give your input to the lawmakers of the state for a brand new energy plan for idaho, i made several calls to give my input and no one would call me back. and the sales tax relief is only good if you install over 25KW …thats 25,0000 watts worth of solar ….I bet there isnt one person in idaho using that tax relief program for solar in idaho. wind …maybe thank you, Bob

Ben
Comment on April 30th, 2009.

yr1: 40% tax credit
yr 2-4: 20% tax credit
total: 100% tax credit.
That sounds like “system is free” if you make enough money to use the tax credit. This sounds too good to be true. Am I missing something?

Thanks,
Ben

Ken
Comment on May 29th, 2009.

The tax credit lowers your income (before computing taxes), not your taxes due. If you earn $80K/yr, and your solar system costs $100K, you get to take 40% the first year, so that knocks your income down to $40K. You would’ve paid ~8% state income tax on the additional $40K, so you save ~$3200 on your tax bill the first year. After four years, you’d save around $6500 on your taxes.

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