Montana Solar Power Rebates, Tax Credits, and Incentives

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Ah, Big Sky Country. The Rocky Mountains and Montana’s wide open spaces make it a natural paradise. Between Yellowstone and Glacier National Parks, and parts of the Historic Lewis and Clark Trail, you could stay out under the sun for months, exploring the Treasure State. Using clean energy like solar power would really help Montana protect its treasures. Here’s what the state legislature has been doing to promote renewable power sources.

STATE LEGISLATION

2007 was a busy year for the Montana legislature. They’ve taken quite a bit of initiative on solar power and other renewable energy sources. The state legislature passed House Bill 3, making the increased property value from a solar power or other renewable energy system exempt from property tax.

Again in 2007, lawmakers passed House Bill 25. What did it do? It took the important step of requiring public utilities in Montana to offer a renewable power option to customers. That means that customers now have the option of buying clean electricity produced from solar power and other renewable sources.

Also in 2007, the Montana legislature enacted House Bill 330. This bill set up a bond to fund the development of renewable energy including solar power.

The Renewable Energy Standard

Montana’s legislature took another important step in 2007 with House Bill 681. It required both public and private utilities to produce at least 15% of their energy from renewable sources by 2015. This expanded 2005’s Senate Bill 415, which made this mandate for public utilities. That’s at least a good start on harnessing the power of the sun, but why not raise that percentage?!

NET METERING

In 1999, the Montana Department of Environmental Quality established rules requiring utilities to offer net-metering to all customers for generation systems up to 50kW in capacity. Any excess power that the customer generates is credited toward the next month’s bill. At the end of the billing year, remaining net excess power is granted back to the utility though.

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

With the Alternative Energy Investment Tax Credit, businesses can deduct up to 35% of the cost of installing solar and other renewable electricity systems from their taxes. If the credit exceeds your tax liability for the year you install the system, you can carry it over for up to 7 years (15 years on an Indian Reservation). The great thing about this credit is that there is no maximum limit specified, so it should go a long way toward promoting clean power.

Residential users can take a tax credit too. However, the residential credit, while 100% of the cost is eligible, is capped at $500. Let’s raise that limit a bit – a clean power generation system that costs $500 is pretty small.

Montana also participates in the Northwest Solar Cooperative’s Green Tag Purchase program. Through the Green Tag Purchase program, the Northwest Solar Cooperative will buy the energy you generate from your solar power system at $0.05/kWh. This plan lasts through the end of 2009

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

Corporate Tax Credit

* Alternative Energy Investment Tax Credit (Corporate)

Industry Recruitment/Support

* Alternative Energy Investment Tax Credit

Personal Tax Credit

* Alternative Energy Investment Tax Credit (Personal)

* Residential Alternative Energy System Tax Credit

Private Grant Program

* BEF – Renewable Energy Grant

* BEF – Solar 4R Schools

Production Incentive

* Northwest Solar Cooperative – Green Tag Purchase

Property Tax Assessment

* Corporate Property Tax Reduction for New/Expanded Generating Facilities

Property Tax Exemption

* Generation Facility Corporate Tax Exemption

* Renewable Energy Systems Exemption

State Loan Program

* Alternative Energy Revolving Loan Program

Utility Grant Program

* NorthWestern Energy – USB Renewable Energy Fund

 

EXAMPLE 3KW SYSTEM – HOME INSTALLATION COST

How much would it cost to install a solar electricity system in Montana? Installing a typical 3kW system in Billings would run about $54,000. Don’t forget that you’d get to take $2,500 in state and federal tax credits too. That may seem like a lot to fork over, but keep in mind that your property value would go up, and the increased value is tax exempt! Because Montana has a solar rating of Good, you would generate enough electricity to pay off the system in 26-30 years, assuming an average monthly usage of 1,300kWh at a rate of $0.0814/kWh. Here are a few more important details to consider:

• 600 square feet of roof area required
• Estimated property value increase of $10,980 (tax free!)
• $25,327 estimated utility savings over 25 years
• Keeps over 200 tons of CO₂ out of the atmosphere: the equivalent of taking 38 cars off the road or planting 642 trees.

CONSENSUS

Overall, Montana has the beginnings of a strong program of promoting solar power and other clean energy sources. The state legislature has done quite a bit of work in 2007 setting up tax credits, requiring utilities to offer clean power to their customers, and setting a Renewable Energy Standard. Let’s hope that the 2009 legislative session includes some more incentives for both residential and business customers as well. And why not raise the Renewable Energy Standard above the 15% goal the lawmakers set for 2015? After all, it’s Big Sky Country, make use of the solar resources that are just hanging around in that sky.

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