Solar Power in Idaho: All You Need to Know!

Idaho Solar Power: Check Your Savings, Costs, Tax Breaks, Incentives and Rebates

Idaho receives large amounts of sunlight all year long and is ideal for a solar investmentThe state of Idaho receives generous amounts of sunlight throughout the year, offering a high potential for homeowners who wish for a solar panel installation in their home.

Idaho has locations where the average sunlight available during the year is above 5.5 peak sun-hours per day, going as high as 7 daily peak sun-hours during summer months such as June and July.

You can check out the US Department of Energy site for Idaho and the NASA Atmospheric Data Center site for more information on the available solar resource in Idaho.

In the NASA site you can input your coordinates in Idaho to know exactly how much sunlight to expect per month!

The two strongest points in favor of solar power in Idaho are:

  1. A state-level tax credit in addition to the 30% federal tax credit. You will get around 37% of the PV system cost back as tax deductions!
  2. If your residential PV system has surplus production during one month you get a credit on your next electric bill, where you get back the full retail price of every kilowatt-hour exported.

Getting in touch with a trusted solar power installer near you is the best way to get an assessment of your site conditions, to know exactly what performance to expect from a PV system.

 

Return of Investment for Residential Solar Power in Idaho

To give you a general idea of the project financials when you go solar in Idaho, let’s assume you will purchase a 5-kilowatt PV system for your home.

A solar panel installation cost around $21,000, but state and federal tax credits can allow you bring down the net cost for year one to around $13,500, which is equivalent to $2.7 per installed watt.

The following is a breakdown of the costs and savings when installing a 5 kW PV system in Idaho:

  • - Before incentives, the average upfront cost of a residential PV system is $21,000.
  • - The federal solar tax credit will take around $6,300 away from you net PV system cost. If you add the local tax credit for year one as well, this will rise to around $6,700.
  • - After the tax credits, your PV system cost drops to around $14,300.
  • - Assuming the savings over the first year will be close to $750, the net cash out of your pocket for year one is around $13,550.
  • - You can expect to get back your investment in around 15 years.
  • - Your property will also increase in value, and so will your net worth.
  • - The environmental benefit is equivalent to planting more than 100 trees per year.

Cheap energy is the main reason why the payback period is extended compared to some other states. In Idaho you can expect to pay around $0.12/kWh on average, but at least a lot of the power comes from hydroelectric dams, which are also a renewable source like solar power.

For a more accurate calculation we recommend you vist our home costimised solar calculater here

Anyway, a solar PV system can be expected to have a service life of 25 years, so a payback period of 15 years means you will get a full decade of free power once the PV system has paid for its own cost.

Over the entire lifetime of the project, you can expect to see a net economic benefit above $15,000 dollars… a sizeable amount!

Keep in mind that this is a general scenario based on the average conditions across the state of Idaho. Every project is different and there are many factors that determine the exact performance you will get from a residential PV system.

The following are some of the main aspects considered by solar power installers:

  • - Rooftop orientation, ideally it should face south.
  • - Being free from obstacles, natural or man-made, that could cast shadows on your rooftop.
  • - The exact location in the state of Idaho, on average the south is sunnier!

Talk to our trusted solar installer we work with near you for a detailed PV analysis and a quote according your exact location and site conditions.

 

Idaho Solar Power Incentives, Tax Breaks and Rebates

While Idaho lacks a Renewable Portfolio Standard and rebates for solar power, the state allows you to deduct the cost of the PV system from your taxable income over the first four years of ownership, which helps improve the project cash flow initially.

Keep in mind that you will also have access to the 30% federal tax credit, as soon as you file your next tax declaration.

Although electric utility companies are not required by law to have a net metering policy, the three main companies in Idaho have voluntarily agreed to give their customers the full credit for each kilowatt-hour of energy they put into the grid.

The credit shows up until the next month, but you save the full retail price of that energy!

Idaho Tax Credit

The state of Idaho allows you to deduct the cost of your PV system from your taxable income, with the following procedure:

  • - A 40% cost deduction for the first year of PV system ownership.
  • - Three consecutive 20% cost reductions on years 2, 3 and 4.

Unlike the 30% federal tax credit, these deductions come off your taxable income and not the actual taxes you pay. It is still great news, however, since your project cash flow will get a small boost from years 1 through 4.

When you add the state and federal tax credits, you are getting around 37% of the project cost back as tax deductions.

Which Taxes Apply for Solar PV Systems in Idaho?

Both the property tax and the sales tax apply when you install a residential solar PV system in Idaho.

However, the combination of the federal and state tax credits will make sure you get 37% of the system cost back, which swings the balance in your favor!

 

Idaho Electricity Rates

Installing a solar panels will help the environment and reduce your home costsIdaho has cheap electricity, priced at $0.12/kWh on average, and this is the main reason why the payback period of a solar PV system tends to be extended.

However, when you consider the entire lifetime cost of owning the residential solar array, you are getting electricity at a much cheaper cost per kWh that if you had purchased all of that energy from local utilities: your total solar panels electricity savings over the project lifetime will exceed $15,000!

In addition to getting a financial benefit, you are also contributing to environmental sustainability. The environmental benefit of going solar in Idaho can be compared to that of planting more than 100 trees per year.

 

Is There Net Metering in Idaho?

Although the state of Idaho does not have laws for a net metering policy, local electric utilities have agreed to give credit for any energy homeowners put back into the grid at the full retail price.

There are other locations where you only get back a portion of the energy cost, so this is one of the strong points in favor of installing solar PV systems in Idaho.

If you size your residential PV system correctly, you can overproduce energy in the summer to make up for the reduced production in the winter, and meet 100% of your energy needs from the sun. This is like going off the grid, but without purchasing expensive batteries.

The utilities were kind enough to let you use their grid as an energy buffer instead!

Keep in mind that there is a limit for how large a PV system can be, but for residential consumers it is 25 kW. Unless you live in a huge mansion, you don’t have to worry about the size limit!

The only factor that complicates PV system interconnection is the lack of an interconnection policy, so each utility company has a different set of rules on how you should plug in your residential PV system to their grid.

The best way to ensure you size your solar PV system correctly and comply with interconnection rules according to your utility requirements is to talk to our experts, and get in touch with trusted solar power installers near you.

 

Are There $0 Down Payment Financing Options in Idaho?

Solar leasing and power purchase agreements (PPAs) are not available in Idaho, so the only option for going solar with $0 down is to get a loan. If you own a lot of equity in your home, a great low interest option is a HELOC, or Home Equity Line of Credit.

For more information about going solar with zero down we suggest you read out Zero down artical here.

Solar Loan

If you take a HELOC to go solar in Idaho, you will see an immediate cash flow benefit, and will end the first year of PV system ownership with more than $5,000 in your favor – the tax credits are your regardless of whether you purchased your solar PV system in cash or through a loan.

This will greatly help with your loan payments over the first few years of owning the PV system, and after you have paid the loan the energy produced will be completely free.

Of course, given that you are paying interest, the lifetime savings of the solar PV system are diminished. The total economic benefit over the PV system’s lifetime drops to around $6,500 in this case, much less than the $15,000 you can expect to get with a cash purchase.

 

Cash Purchase VS Loan: What’s Best for Idaho Homeowners?

purchasing and loaning UV panels both have their respective advantages. the question is which one is right for you?As with all financial decisions, each option has positive and negative points. The final choice is up to you as a homeowner, but the following guidelines can point you in the right direction:

Purchasing a PV system in Idaho in cash

Purchasing a PV system in Idaho in cash results in a payback period of 15 years on average, but after that you get a whole decade of free energy and a net economic benefit of around $15,000.

If you can afford the upfront cost and want to get maximum profit from your investment, this is the option for you.

Purchasing a PV system in Idaho through a loan

Purchasing a PV system in Idaho through a loan gives you an immediate benefit thanks to the state and federal tax credits available. However, the interest payments on the loan will reduce your total savings to around $6,500.

Going solar with a loan is the recommended option if you can’t afford a cash purchase but own a lot of equity in your home.

What is the Solar Power Installation Process in Idaho?

To know the exact cost of a PV system in Idaho, as well as the performance you can expect, the best recommendation we can give you is to set up a home visit from a reliable solar power installer.

The procedure to own a solar PV system is very straightforward, and you can start today:

    • - Fill our solar installation, providing basic information on your property.
    • - Talk to trusted installers near you, and receive accurate quotes.
    • - Compare quotes and choose the best option, we recommend you compare at least three.
    • - Have your contractor install the PV system, and enjoy clean power while helping the planet.
    • The example outlined above was for a 5-kW system and average conditions in Idaho, but a trusted contractor can craft a proposal that fits your budget, needs and site conditions. Once you sign the agreement, the installation process typically lasts for three to four days.

Remember each utility company has different interconnection rules. Avoid the hassle by hiring a reliable contractor who is experience in going through the interconnection process.

 

Conclusion

Although Idaho has a long way to go when it comes to solar benefits there is enough sunlight to make solar panels worth your timeThe state of Idaho has a decent solar resource, a state-level tax credit on top of the 30% ITC, and a favorable net metering framework that has been proposed voluntarily by local utility companies even though the law does not require it.

Conditions could be even better if the state had a Renewable Portfolio Standard, which results in rebates, performance-based incentive, and other benefits that improve your project financials.

However, this is now more likely to happen thanks to the launch of Clean Power Plan by the federal government in the year 2015.

Your two options for covering the PV system cost are a cash purchase and a loan, preferably through a HELOC, where you can gain access to interest rates below 5%.

The first option offers the best savings at the cost of assuming a 15-year payback period, while option two eases up the cash flow but provides diminished net savings over the service life of the solar PV system.

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