Montana solar rebates and incentives: 2025 guide

Montanans looking to power their homes with clean, sustainable energy have access to a few cost-cutting solar incentives that can help speed up their payback period.  While there aren’t many state-level incentives, the federal solar tax credit and the state’s net metering programs can still save you thousands on your solar panel system. However, the federal solar tax credit will no longer be available for systems installed after December 31, 2025, so you have to go solar this year to claim it.

As a Montana homeowner, the ITC is the most impactful way to bring down your solar costs.

Residential Clean Energy Credit

The Residential Clean Energy Credit, formerly known as the federal investment tax credit (ITC), can reduce your solar panel system's cost by 30%. Your entire system qualifies for this incentive, including equipment, labor, permitting, and sales tax.

However, this credit will no longer be available after December 31, 2025. On July 4, 2025, President Trump signed legislation that eliminates the residential solar tax credit entirely starting January 1, 2026—nearly a decade ahead of its original expiration date. Solar projects typically take several months from consultation to installation, so homeowners considering solar should act quickly to lock in these savings.

When you file your federal income taxes, you can claim this incentive as a credit towards your federal tax bill. Just keep in mind that to qualify for the ITC, you need to purchase your system either with cash or a solar loan–if you lease your system, you won't be eligible. 

You also need a high enough tax bill to use the credit, though you can roll over any remaining credit year-to-year, according to a tax expert EnergySage spoke with. The IRS doesn't specify an end date for credit rollovers, meaning you can theoretically roll over unused credits indefinitely based on current law. However, Tax Form 5695 may no longer exist after 2025, so you likely will no longer be able to use that form. Please speak with a tax professional for specific guidance.

Remember: Your system must be installed by December 31, 2025 to qualify for this credit.

Alternative Energy Revolving Loan Program (AERLP)

The Alternative Energy Revolving Loan Program (AERLP) provides loans to help residents install alternative energy systems, including solar. Through the AERLP, you can borrow up to $40,000 with a 3.5% fixed, 4.023% APR interest rate, with a maximum loan term of 10 years.

You'll just have to pay some closing costs, including an origination fee of $250 or 2% of the loan amount (whichever is greater) and about $200 in other fees.

Yellowstone Valley Electric Cooperative Stock Watering System Rebate

Members of the Yellowstone Valley Electric Co-op (YVEC) can receive a rebate of up to 50% of costs or $1,000, whichever is less. To be eligible, you must be a member of the cooperative, connected to YVEC service, and have proof of solar installation and maintenance.

Submit your application for rebate as soon as possible, as YVEC will not offer the rebate after 90 days of your purchase.

Montana offers a solar property tax exemption. Solar panels generally raise a home's property value, but if your city or town adopts this law, you won’t have to pay extra tax on that added value. Since Montana doesn’t have sales tax, you won’t have to worry about that either, like you would in some other states.

If you connect your solar panel system to the grid, you can benefit from net metering—which is arguably the best incentive for rooftop solar.

Under net metering, the sun doesn’t need to shine all the time to get massive value from your solar panels. Your electric utility company essentially works like a bank account for all the energy your solar panels produce in a given month.

When the sun shines, your home’s electrical system first takes as much power as it needs from the solar panels. If the panels generate excess energy, it's sent back onto the grid, and your utility company gives you full credit for all of it on your energy bill. 

When the sun isn’t shining and you need grid electricity to power your home, the utility company just starts drawing against your credits. You won’t pay for electricity until those credits run out.

In Montana, the net metering rules apply to all investor-owned utility companies. Many electric co-ops have also voluntarily adopted net metering, so make sure to check with your energy provider to see what programs are available to you. 

A few nuances to keep in mind: Solar metering in Montana is credited in kWh that can be carried forward from month to month. Any unused credits banked at the end of a 12-month period will be surrendered to the utility company. 

Learn more about Montana’s net metering programs: 

Montana doesn't offer any state-specific battery incentives. However, all batteries above 3 kWh in size are eligible for the 30% federal tax credit. In Montana, batteries can also boost energy independence and provide backup power during an outage. 

If you're looking for solar installers in Montana, here is the complete list.