State solar guide
Montana solar economics in 2026 depend entirely on your utility rate, available state incentives, and net-metering rules. The federal residential credit expired December 31, 2025. We present the honest picture for your location.
Sources: ElectricChoice June 2026 | NREL PVWatts (Billings and eastern Montana average 4.5 to 5.0 peak sun hours per day; Missoula and western Montana average 4.0 to 4.5 hours per day) | EnergySage May 2026 | Federal residential credit: Section 25D expired December 31, 2025, H.R.1 (One Big Beautiful Bill Act).
Net metering
Montana state law requires investor-owned utility companies to offer net metering. NorthWestern Energy, the primary IOU serving Billings, Great Falls, Missoula, Helena, and much of the state, offers net metering with credits measured in kWh at the full retail rate. Credits roll forward monthly but expire at the end of each 12-month cycle - unused credits at the annual reset date are forfeited to the utility rather than paid out. This annual expiration differs from states like Colorado (Xcel indefinite rollover) and makes right-sizing to annual consumption more important in Montana. Most electric cooperatives have voluntarily adopted net metering policies similar to NorthWestern Energy's program.
The annual credit expiration in Montana means producing significantly more than you consume results in forfeited credits. System sizing should target annual consumption rather than maximizing production. Flathead Electric Cooperative (serving the Kalispell area) and other cooperatives have adopted net metering voluntarily; verify specific terms with your cooperative before contracting. Montana Power (historical) no longer exists; NorthWestern Energy is the primary IOU statewide.
Program: NM1_full_retail. Last verified: June 1, 2026. DSIRE source (opens in new tab).
Verify with your utility
Net-metering rules change by utility and program cycle. Confirm current export credit rates and eligibility with your specific Montana utility before contracting. Current program details at DSIRE (opens in new tab).
State incentive stack
The federal residential credit expired December 31, 2025. The programs below are what remains for Montana homeowners. Amounts and availability change; every program is date-stamped and linked to its DSIRE source.
Federal residential solar credit (Section 25D): expired. The Section 25D residential investment tax credit expired December 31, 2025. The residential credit rate is 0%. State and local incentives below may still significantly reduce your net system cost. Commercial systems still qualify for Section 48E (30%).
| Program | Benefit | Eligibility | Status | Source |
|---|---|---|---|---|
| Montana Residential Alternative Energy System Tax Credit State income tax credit The credit amount is modest ($500 annual cap per individual). Verify the current statutory credit amount with the Montana Department of Revenue - some sources cite $1,000 per household, which may reflect the aggregate for joint filers. Consult your tax advisor. | Up to $500 per individual per year (verify current statutory cap) Montana income tax credit for residential alternative energy systems including solar. Credit of up to $500 per individual per year (some sources cite $1,000 per household; verify current amount). May carry over up to 4 years. | Montana residents installing qualifying residential alternative energy systems including solar. Applied against Montana income tax liability. Carry-over for up to 4 years if credit exceeds annual liability. | Active | DSIRE (opens in new tab) |
| Montana 10-Year Property Tax Exemption for Solar Property tax exemption (10-year) The exemption is limited to $20,000 in added value and expires after 10 assessment years. Confirm with your county assessor that the installation qualifies and is properly recorded as exempt. | Full exclusion of solar-added assessed value (up to $20,000) from property taxes for 10 years Montana exempts 100% of the value added by a solar installation from property taxes for 10 full assessment years, up to $20,000 in added value. After 10 years, the exemption phases out and the property is assessed at standard rates. | Montana residential properties with qualifying solar energy systems. Exemption cap: $20,000 in added value. Duration: 10 full assessment years. | Active | DSIRE (opens in new tab) |
| Montana Alternative Energy Revolving Loan Program (AERLP) State low-interest loan Loan availability subject to revolving fund capacity. Verify current program status and application process with Montana DEQ before relying on AERLP financing. | Up to $40,000 at 3.5% fixed rate for up to 10 years Montana Department of Environmental Quality administers a revolving loan program offering up to $40,000 at a fixed 3.5% interest rate for up to 10 years for qualifying alternative energy systems including solar. | Montana residents installing qualifying alternative energy systems. Verify current program availability, eligibility, and application process with the Montana Department of Environmental Quality. | Active | DSIRE (opens in new tab) |
Data last verified June 1, 2026. Incentive programs change; verify current amounts and availability at dsireusa.org (opens in new tab) before committing to a project.
Savings example
This example uses real Montana market data. No federal residential credit is applied. Figures are illustrative; your in-home assessment uses your actual utility bills and the current rate schedule for your specific utility.
System size 13 kW at market average of $2.74 per watt. Annual production estimated at 16,900 kWh based on Billings at 4.5 to 5.0 peak sun hours per day (NREL PVWatts). Assumes 75% self-consumption at $0.1333 per kWh full retail value; 25% exported at full retail rate via NorthWestern Energy net metering. Annual credit expiration at year-end; system sized to avoid significant unused annual credits. No Montana sales tax. Utility rate escalation at 3% annually. Federal residential credit: $0 (expired). State credit: $500 per year x 4 years = $2,000 total. This example runs toward the longer end of and slightly beyond the typical 12 to 15 year statewide range because it accounts for annual net metering credit expiration, which forfeits unused credits at year-end and reduces effective savings compared to a state with indefinite credit rollover. EnergySage separately estimates approximately $29,659 in 25-year net savings on a typical 13 kW Montana system. Figures are illustrative; Missoula and western Montana customers with 4.0 to 4.5 peak sun hours see longer paybacks.
Montana NorthWestern Energy customer - Billings area (illustrative)
Illustrative example. Federal residential credit: $0 (Section 25D expired December 31, 2025). Your estimate will use your actual utility bills and current rate schedule.
Permitting
Montana does not have a statewide residential solar permit fee cap. Permit requirements and fees vary by jurisdiction. Billings and Yellowstone County, Great Falls, Missoula, and Helena each have separate permit processes with typical residential solar fees in the $100 to $300 range. Montana's smaller market and lower installer volume means permit timelines vary more than in high-volume solar states. NorthWestern Energy interconnection review adds 4 to 8 weeks after permit issuance. Total contract-to-energization time in Montana typically runs 8 to 16 weeks, with rural areas potentially longer due to installer scheduling and logistics. Montana has no SolarAPP+ adoption in most jurisdictions.
Bozeman and Gallatin County have established solar permit processes reflecting strong local solar demand from a sustainability-focused community. Bozeman's permit office is generally responsive for residential solar applications. Northern Montana (Havre, Cut Bank, Glasgow) and southeastern Montana rural areas may have longer scheduling lead times due to the small installer base.
Commercial solar in Montana
The commercial solar credit (Section 48E, 30 percent) remains available for qualifying commercial projects. Construction must begin by July 4, 2026 to qualify for the full placed-in-service window. Combined with MACRS accelerated depreciation and 100 percent first-year bonus depreciation, the combined first-year federal benefit can reach 45 to 55 percent of project cost for many Montana business owners. Direct Pay is also available for nonprofits, municipalities, and other tax-exempt entities.
Commercial solar overviewCommercial solar projects must begin construction by July 4, 2026 to qualify for the 30 percent Section 48E federal tax credit. After that date, the system must be placed in service by December 31, 2027.
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