Is Solar Worth It in Idaho in 2026?

The federal Residential Clean Energy Credit (Section 25D), the 30% tax credit homeowners used for years, ended for systems installed on or after January 1, 2026. It was eliminated by federal legislation signed in July 2025, with no phase-down.

Businesses that own solar systems can still claim federal credits for now. That is why leases and prepaid leases, where a third-party company owns the system, can still pass federal value to homeowners.

In the Treasure Valley, Idaho Power's export credit rates were reset in fall 2025 and paused until 2028.

Your utility has more effect on solar value than anything else in Idaho.

• Avista (Coeur d'Alene, Post Falls, Lewiston, Moscow and more): one-for-one retail net metering in Idaho.
• Clearwater Power (many rural areas around Lewiston and the Palouse): one-for-one net metering.
• Kootenai Electric Cooperative (many homes around Hayden, Rathdrum and Post Falls): one-for-one kWh credit, plus a monthly service charge and a peak-use charge that a battery can reduce.
• Idaho Power (Boise and the Treasure Valley): net billing. Power used at home saves retail, and exports are credited at a lower export credit rate.

The same system, making the same power, can be worth noticeably more per exported kWh in North Idaho than in the Treasure Valley. In Idaho Power territory, design and storage matter more.

Idaho offers a state income tax deduction for residential solar under Idaho Code 63-3022C. You can deduct 40% of the cost in the year the system is installed and 20% in each of the next three years, up to $5,000 per year.

This is a deduction, not a credit. It lowers your taxable income rather than your tax bill dollar-for-dollar, and it goes to the system's owner. Talk to your tax professional about how it applies to you.

Solar tends to be a good fit if most of these are true:

• You use steady power during the day or evening (EV charging, air conditioning, a pool, a home office or shop).
• Your roof has good south or west exposure and at least 10 years of life left, or you plan to replace it along with the solar install.
• You plan to stay in the home for years.
• You are in North Idaho with one-for-one crediting, or in the Treasure Valley and open to a battery or a lease structure.

It's a weaker fit with heavy shade, a very low electric bill, a roof near the end of its life with no plan to replace it, or a move coming in the next few years.

• It uses your actual utility and rate plan. An Idaho Power proposal must use the export credit rate for exported power.
• The production estimate is modeled for your roof and shade, not a statewide average.
• It does not include a federal tax credit on a cash or loan purchase installed in 2026 or later.
• It is clear about who owns the system and who claims each incentive.
• It spells out the roof plan, warranty terms and who services the system.