Montana Solar Rebates And Incentives

Rebates list

Montana Rebates and Incentives Summary

MontanaMontana is the fourth largest state in the union, situated in the northwestern portion of the United States. Geographically, Montana is one of the largest states, but concerning population, it is one of the smallest with just under a million residents and only 6.2 people per square mile, according to the U.S. Energy Information Administration (EIA).

With 145,500 square miles of territory, 60 percent of which consists of open prairie and is part of the Great Plains, except for the western one-third of the state that houses a hefty portion of the Rocky Mountains from which the state gets its name, Montana has an abundance of renewable solar energy resources. For all the open space Montana has, there is much potential for harnessing the energy of the sun with photovoltaic solar cells--the state averages over 300 days of sunshine per year--but the state seems to be mostly focusing its renewable energy efforts on cultivating a wind energy program.

Montana’s primary energy source is coal. Oil drilling and coal mining in the eastern part of the state make up a large part of Montana’s economy. Over one-fourth of the nation’s recoverable coal reserves can be found in Montana’s geologic basin. Oil reserves are also found in the eastern basins of the state. In addition, rivers flowing down the Rocky Mountains in the state offer great opportunities for hydroelectric power. In fact, six of the ten largest electric plants in the state are fueled by power derived from water pressure, and currently 25 percent of the state’s total energy comes from hydroelectric power plants. Montana’s overall energy consumption is relatively low due to a low population, though the per capita use of energy tends to be relatively high because of the cold winters residents experience. As well as personal energy use, the process of coal mining requires the majority of the state’s energy consumption.

Montana’s plans for the future include a renewable energy portfolio that calls for the state to collect 15 percent of its energy from renewable sources by the year 2015. Considering the above figure for hydroelectric power, Montana has already met that goal. Still, opportunities for solar power using photovoltaics are many, especially in the northwestern area of the state. The city of Helena can produce roughly 2,250 kilowatt hours of solar electric power annually from a 1,000-watt utility-connected solar electric system, which is more than Jacksonville, Florida and almost as much as Phoenix, Arizona. Installing solar panels on a residential building in Montana makes a lot of sense, both for the environment and for your pocket book.

To help residents out in that respect, Montana offers a number of incentives and rebates for people who install photovoltaic panels on their homes. These include property-tax reductions or exemptions, tax credits, and rebates.


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Alternative Energy Investment Tax Credit


Commercial and net metering alternative energy investments of $5,000 or more are eligible for a tax credit of up to 35% against individual or corporate tax on income generated by the investment. The investment must be depreciable. The credit is applied only against taxes due as a consequence of taxable or net income produced by:

  • A manufacturing plant that is located in Montana and that produces alternative energy generating equipment;
  • A new business facility or the expanded portion of an existing business facility that supplies basic energy needed from the alternative energy

Alternative Energy Revolving Loan Program


The Alternative Energy Revolving Loan Program (AERLP) provides loans to individuals, small businesses, local government agencies, units of the university system, and nonprofit organizations to install alternative energy systems that generate energy for their own use. The program is funded by air quality penalties collected by the Department of Environmental Quality (DEQ), and also used funding from The American Recovery and Reinvestment Act of 2009 (ARRA). The program is administered by DEQ, which is responsible for developing the rules.

Alternative energy systems are defined by the Montana

BetterBricks - Integrated Design Lab

The lab network serves as a technical resource of credible and unbiased information and education to facilitate energy efficient design to achieve high-performance buildings. Each lab provides access to information, tools, and resources on integrated design and other high-performance building practices and a variety of advisory services that include integrated design process and methods, climate analysis and appropriate building responses, daylighting and electric lighting, and modeling (daylighting and energy performance).

Building Energy Code


Much of the information presented in this summary is drawn from the U.S. Department of Energy’s (DOE) Building Energy Codes Program and the Building Codes Assistance Project (BCAP). For more detailed information about building energy codes, visit the DOE and BCAP websites.

The energy codes are reviewed on a three-year cycle corresponding to the adoption of new versions of the International Code Conference (ICC) Uniform Codes. Proposed changes are submitted to the Building Codes Bureau. In fall 2014, Montana adopted the 2012 IECC with state amendments. If an approved local government code

Corporate Property Tax Reduction for New/Expanded Generating Facilities


Montana generating plants producing one megawatt (MW) or more with an alternative renewable energy source are eligible for the new or expanded industry property tax reduction. This incentive reduces the local mill levy during the first nine years of operation, subject to approval by the local government. If approved, the facility is taxed at 50% of its taxable value in the first five years following the issuance of the construction permit. Each year thereafter, the tax reduction decreases and the taxable value percentage is increased in equal increments until the full taxable value is

Energy Conservation Installation Credit


Individual taxpayers may claim a credit against their income tax liability for up to 25% of the costs of investment for energy conservation purposes in a building.  The maximum credit is $500 per individual (a married couple filing jointly can claim a tax credit of $1,000). The credit must be claimed in the year that the expenditure is made. It is nonrefundable and may not be carried over to future years. For doors, windows, and skylights in new construction, only the amount spent to surpass the applicable state or federal construction and energy standards may be used.

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Generation Facility Corporate Tax Exemptions


New electricity generating facilities built in Montana with a capacity of up to one megawatt (MW) that use an alternative renewable energy source are exempt from property taxes for five years after operation begins. The taxable value of the property varies depending on the property ownership and class. The assessed value of personal property is adjusted yearly based on a trend factor that reflects the relevant rate of inflation and on the Montana Department of Revenue’s depreciation schedule. State property tax exemption forms are available at the Department of Revenue’s county office.

Interconnection Standards


In July 2010, the Montana Public Service Commission (PSC) adopted interconnection rules, effective August 13, 2010.  These rules apply to all electric utilities under the PSC's jurisdiction, including investor-owned utilities and co-ops.  Small generators, or systems up to 10 megawatts (MW) located on the land of utility customers within good standing are allowed to interconnect.  While there is no statewide standard interconnection agreement, the largest investor-owned utility in Montana, NorthWestern, does have a standard interconnection agreement for net-metered systems.  The use of

Net Metering


Eligibility and Applicability

Montana's net-metering law, enacted in July 1999, applies to all customers of investor-owned utilities. Systems up to 50 kilowatts (kW) in capacity that generate electricity using solar, wind or hydropower are eligible. No limit on enrollment or statewide installed capacity is specified. Utilities may not require customer-generators to comply with any additional standards or requirements beyond those established by the National Electric Code, National Electrical Safety Code, Institute of Electrical and Electronic Engineers (IEEE), and Underwriters Laboratories

NorthWestern Energy (Electric) - E+ Home Lighting Fixtures Rebate Program


NorthWestern Energy offers a variety of rebates for residential customers to make energy efficiency improvements in their existing homes. Electric supply customers who purchase or implement energy efficient lighting and controls are eligible for prescriptive rebates from NorthWestern. There are also many rebates available for natural gas space and water-heating. Details for all rebate offerings are found on the program web site listed above. Rebates are available for existing and new homes.

NorthWestern Energy (Gas) - Residential Energy Efficiency Rebate Program


NorthWestern Energy offers a variety of rebates for residential customers to make energy efficiency improvements in their existing homes. Incentives are available for heating equipment, insulation, programmable thermostats, fan controllers, and water heating. See program website for details on eligible measures and incentive amounts. 

Customers building a new home are also eligible for incentives for natural gas space and water heating under the E+ New Homes Program.

Rebates for lighting fixtures and sensors are also available for NorthWestern electric customers.

Property Tax Abatement for Production and Manufacturing Facilities


In May 2007, Montana enacted legislation (H.B. 3) that allows a property tax abatement for new renewable energy production facilities, new renewable energy manufacturing facilities, and renewable energy research and development equipment. Eligible facilities and equipment are assessed at 50% of their taxable value.

Qualifying renewable energy manufacturing facilities are those that (1) produce materials, components or systems to convert solar, wind, geothermal, biomass, biogas or waste heat resources into useful energy, and (2) whose annual production of renewable energy equipment makes up

Renewable Energy Systems Exemption


Montana's property tax exemption for recognized non-fossil forms of energy generation and low emission wood or biomass combustion devices may be claimed for 10 years after installation of the property. The exemption is allowed for up to $20,000 in value for single-family residential dwellings and up to $100,000 in value for multi-family residential dwellings or non-residential structures. This property is class 4 property and otherwise would be taxed on 2.54% of assessed value in tax year 2013 and 2.47% in tax years after 2013.

Recognized forms of energy generation include solar

Residential Geothermal Systems Credit


A resident individual taxpayer of Montana who installs a geothermal heating or cooling system in his or her principal dwelling is eligible for a tax credit based on the installation costs of the system. The credit may not exceed $1,500, and only one credit may be claimed per household. If not used fully in the first year the system is installed, the credit may be carried forward for the 7 succeeding tax years. 

Use Montana Department of Revenue Form ENRG-A to claim this tax credit.

Solar and Wind Easements


Montana's solar and wind easement provisions allow property owners to create solar and wind easements for the purpose of protecting and maintaining proper access to sunlight and wind. Solar easements should be negotiated with neighboring property owners. Montana's solar easement law was enacted in 1979; the wind easement law was originally enacted in 1983. 

In April 2011, the provisions related to wind easements were repealed by House Bill 295 (2011) and replaced with more extensive wind easements provisions.  This legislation defines wind energy rights as property rights and specifies

Universal System Benefits Program


Montana established the Universal System Benefits Program (USBP) in 1997 as part of its restructuring legislation. The USBP supports cost-effective energy conservation, low-income customer weatherization, renewable-energy projects and applications, research and development programs related to energy conservation and renewables, market transformation designed to encourage competitive markets for public purpose programs, and low-income energy assistance.

Beginning January 1, 1999, all electric utilities -- including electric cooperatives -- were required to contribute revenue generated from a