Solar incentives and rebates in Idaho: the state tax deduction and what else is left

Solar incentives in Idaho come down to one main state benefit: the Residential Alternative Energy Tax Deduction, which lets you deduct 40% of a solar system's cost from Idaho taxable income in the year you install it and 20% in each of the next three years, up to $5,000 a year and $20,000 in total. As of November 2026 there are no state cash rebates for home solar, and the federal homeowner credit has ended for new systems.

Beyond the deduction, what you save depends on your utility's rules for exported power, which differ between Idaho Power, Rocky Mountain Power and Avista.

Key takeaways

• Idaho's deduction is 40% of cost in year one, then 20% a year for three years, capped at $5,000 per year and $20,000 total.
• It is a deduction, not a credit: it lowers taxable income, so the cash value depends on your Idaho tax rate.
• No state solar rebate is listed by the Idaho Office of Energy and Mineral Resources (OEMR), and it says Home Energy Rebates are not currently available.
• Idaho Power and Rocky Mountain Power now use net billing with export credit rates well below retail; Avista still uses kWh net metering.
• The federal homeowner credit (25D) is not allowed for expenditures made after December 31, 2025, so an Idaho system completed in 2026 does not qualify.

Idaho's solar tax deduction explained

The Idaho Office of Energy and Mineral Resources lists the Residential Alternative Energy Tax Deduction as the state's homeowner incentive for solar, wind, geothermal and certain biomass devices used for heating or electricity. OEMR describes the schedule this way:

Tax year	Share of system cost deducted	Annual cap
Year installed	40%	$5,000
Year 2	20%	$5,000
Year 3	20%	$5,000
Year 4	20%	$5,000
Total	100%	$20,000

Example (illustration)

For a $15,000 system, 40% is $6,000, but the yearly cap limits the first-year deduction to $5,000. Each of the next three years allows 20%, or $3,000. That adds up to $14,000 deducted over four years. Your actual tax saving is that deduction multiplied by your Idaho marginal income tax rate, so it is a fraction of the deduction amount. Ask a tax preparer to run your numbers.

The OEMR page was last updated February 9, 2026, and recommends talking to a licensed tax professional about your situation.

Are there solar rebates in Idaho?

We found no statewide cash rebate for residential solar as of November 2026. OEMR's incentives page lists none, and it specifically says the federally funded Home Energy Rebates are not currently available and advises against buying anything on the expectation of a rebate.

A few related programs exist but are not solar rebates:

• State Energy Loan Program. OEMR offers low-interest loans for energy efficiency projects in single-family homes. Loans are credit-evaluated by a financial institution and must be secured with real estate. The page does not say solar-only projects qualify, so ask before applying.
• Weatherization Assistance Program. Income-based help for eligible homeowners and renters, aimed at efficiency rather than solar.

If an installer quotes an "Idaho solar rebate," ask for the program name and official link.

Is the federal solar tax credit still available in Idaho?

Not for a home system you buy now. In an August 2025 FAQ, the IRS says the Residential Clean Energy Credit (section 25D) is not allowed for any expenditures made after December 31, 2025, and that an expenditure is treated as made when the original installation is completed. A home system finished in 2026 does not qualify. Some older pages, including part of OEMR's federal summary table, still show a 30% residential figure for earlier years; that does not apply to a 2026 installation. OEMR's page also describes the business-side clean electricity credits (48E and 45Y), which apply to businesses rather than to homeowners claiming a personal credit. Our guide on the federal solar tax credit explains more.

Utility export credits: Idaho's biggest variable

How your utility pays for exported power matters more to Idaho payback than the deduction does. As of November 2026:

• Idaho Power uses net billing. You pay retail for grid power and earn an Export Credit Rate for exports. Since October 1, 2025, residential exports earn 15.6836 cents per kWh during summer on-peak hours (3 to 11 p.m., Monday through Saturday except holidays, June 1 to September 30), 3.3920 cents in summer off-peak hours and 2.9019 cents the rest of the year. Those rates hold until Idaho Power's April 1, 2028 update filing; the IPUC denied requests to reconsider them in November 2025.
• Rocky Mountain Power (Idaho) uses Schedule 136 net billing. The Idaho PUC approved its revised export credit in November 2025, starting with billing cycles in December 2025; the company's amended filing put the average at 4.2 cents per kWh, held until a July 1, 2028 update.
• Avista (Idaho) still uses Schedule 63 kWh net metering for systems up to 100 kW, but unused kWh credits are surrendered without payment each March 31.

Our guide to net metering in Idaho walks through each utility in detail.

How to claim Idaho solar incentives

1. Get the export rules in writing from your utility before you sign, so your savings estimate uses the right credit.
2. Collect itemized quotes and check pricing with our solar quote checker.
3. Apply for interconnection. Idaho Power handles this under its Schedule 68; other utilities have their own forms. Idaho Power limits residential systems to 25 kW.
4. Keep your invoices. You will need the system cost for the Idaho deduction in the year of installation and the three years after.
5. Claim the deduction on your Idaho return each year of the four-year schedule.

What affects solar payback in Idaho

With a modest deduction and low export credits, the value of Idaho solar comes mostly from power you use at home as it is produced. A few points to weigh:

• Your retail rate. Check current numbers on our Idaho electricity rates page and compare with the national average of 18.16¢ per kWh in August 2026.
• Your solar resource and system size. Our Idaho solar panels page shows typical output.
• Summer evening use. Idaho Power's highest export rate runs from 3 to 11 p.m. in summer, which can favor west-facing panels or batteries.
• Price per watt. Without a large rebate, a fair installed price is the strongest lever you control.

Questions to ask before you sign in Idaho

Because Idaho's incentives are modest, the details of an offer decide whether solar pays. Ask every installer to answer these in writing:

• Which utility rate schedule will I be on (for example, Idaho Power Schedule 6, Rocky Mountain Power Schedule 136 or Avista Schedule 63)?
• How many kWh a year do you expect me to use on site, and how many will I export?
• What export credit did you use for each season, and does it match the current tariff?
• Does your savings estimate include any federal tax credit? (It should not for a 2026 home installation.)
• How did you value the Idaho deduction, and what tax rate did you assume?

To see why the export split matters, take a hypothetical Idaho Power example. If a system exports 1,000 kWh between October and May, those exports earn 1,000 times 2.9019 cents, or about $29. If it exports 300 kWh during summer on-peak hours, those earn about $47. An estimate that values all exports at the retail price would overstate savings by a wide margin. If you are buying a home that already has solar, also ask whether the system is a grandfathered Idaho Power legacy site, which keeps one-for-one net metering through December 20, 2045.

Next steps

Confirm your utility's current export credit, model savings with that rate and the Idaho deduction only, and leave out any federal credit. Then compare offers with our solar quote checker before committing.