Solar Power In Montana
Topic: Solar Power In Montana
Solar Power In Montana
Solar Power in Montana: An Overview
Montana has some encouraging conversations about solar and other renewables, but it still has a long way to go before its Renewable Portfolio Standards are finalised. Solar panel costs have declined considerably, as seen in the Swanson figure below, making solar an intelligent panel energy choice for Montana.
With the RPS deadline approaching, there is a great chance to pass some far-reaching, progressive energy measures that will benefit the state and the environment for many years to come.
Let’s take a look at the various possibilities that Montana citizens have.
Alternatives to Solar in Montana
The graph below shows the costs and returns for each solar panel system option available to Nebraska residents: purchase, purchase with credit, and tiny solar. Unfortunately, there is no solar panel lease programme available in Montana due to the lack of an RPS.
Purchase with cash
Paying for your solar energy system upfront, assuming you have the funds, will continuously optimise the system’s value and the returns you receive. You gain 100% of the cost savings right away because there are no monthly payments.
We’ll use a 5 kW system with roughly $20,000 for this example.
In Montana, you can obtain a $500 state tax credit and a $2000 NorthWestern Energy rebate on your system and a 30% federal tax credit.
After the $2000 rebate, the system should cost roughly $18,000 to install. Your first investment is a mere $11,600 after your $5400 federal tax credit and $1000 state tax credit!
Your solar system has been discounted by roughly 45 per cent after your first-year energy savings of around $650. These energy savings should pay for the rest of the system in roughly 13 years, at which point you should be saving $1300 per year.
You’ll get a total return of around $13,700, or 6.2 per cent, after 25 years. Not a bad return, and keep in mind that you’re creating good local jobs while also helping the environment!
Credit Card Purchases
Taking out a home equity loan to pay for solar panels makes the most sense for most people. Because you’re taking out a home equity loan, you’ll get the 30 per cent federal credit, but you’ll also be able to deduct the interest. You receive all of the perks and incentives without having to pay anything.
You want to buy an $18,000 solar panel system with a 5% home equity loan. While the loan payments will be higher than the savings in energy bills for the first few years, energy inflation will quickly overtake your loan payment.
Purchase on credit makes perfect financial sense with an average installation price of $18,000. In the first year, your energy expenditures should be around $665, and your loan payments should be around $1708.
This means you’ll be out of pocket about $88 each month for the first year, but keep in mind that you’ll be getting $6400 in tax credits. Thanks to the tax credit, you’ll be $5347 ahead of the first year!
Even after paying off the system, you’ll be saving around $1100 per year by the 15th year, and your total net returns will be over $6800 by the 25th year!
Installation of a Small Solar System
You can still benefit from solar even if you don’t have the funds to pay cash for a system or the home equity to borrow $20,000 for a complete 5 kW installation.
All of the data are similar to the example before, except the cost and savings are about half as much. You can get a small rooftop solar panel system (2kW) for roughly $7000 (after the excellent NEW rebate) and still get the federal and state tax deductions, home interest deduction, and energy savings.
You should expect to save roughly $300 on electricity in the first year. With loan payments of roughly $665 per month, your out-of-pocket expenses are around $30 per month – but remember, you get the $3100 combined tax credit, and whatever credit you don’t utilise this year will transfer over to the following year!
After 15 years, you should have saved roughly $450 per year while helping conserve energy and resources, and your house worth should have improved by around $6000.
Renewable Portfolio Standard (RPS) Guidelines in Montana
A state’s Renewable Portfolio Standard (RPS) is a plan that specifies goals and targets for renewable energy output in the state based on law or regulation. The RPS is a measure that pushes power companies to use renewable energy instead of fossil fuels to generate electricity.
Montana’s Renewable Portfolio Standard (RPS) is being phased in overtime, increasing the proportions of renewables required at each benchmark. Montana will require 15% renewable energy by 2015, which is the final phase.
While 15% is an excellent starting point, the most influential states are mandating 30-40% renewables, with a significant portion of that being solar, so Montana has a long way to go.
Additional Montana Considerations
There is no “solar carve-out” in Montana. A solar carve-out ensures that solar energy will account for at least a percentage of the generated energy. This is the most obvious flaw in the state RPS, and it must be addressed quickly!
The state’s comparatively low energy rates provide no incentive for consumers to invest in solar. States with higher pricing obtain a higher immediate return.
In Montana, solar performance incentives, or prizes for solar electricity output, are essentially non-existent.
Solar Has Some Positive Signs
Net metering is available throughout the state. Net metering implies you can sell any electricity you generate but don’t use it back to the utility provider for the same amount you paid. Unfortunately, this only applies to investor-owned utilities, and the credit will be applied to your following account.
Montana’s Interconnectivity statute is a mixed bag, controlling what utilities can charge or demand in exchange for you connecting to the grid and how easy it is to do so. In Montana, it’s pretty simple and cost-effective.
Montana has some of the best state tax credits and rebates in the US, placing it 10th. Compared to the rest of the country, the initial cost of building a system is relatively expensive.
Your overall cost is cheaper than states that levy taxes on renewable energy systems due to a state property tax exemption and the absence of a state sales tax on solar panel electricity.
Despite its frigid climate, Montana has a higher net solar energy generating potential than states such as Texas and Florida. This means that a few minor changes, such as tightening the RPS and establishing a solar carve-out, could significantly improve the state’s energy position while also preserving the environment for everyone.
Solar Power In Montana
Check Your Savings, Costs, Tax Breaks, Incentives, and Rebates for Montana Solar Power
Montana is an excellent place to go solar since, despite its northern position, the state receives an average of more than five peak sun hours per day. There are also significant rebates, state tax credits, and exemptions available.
When you combine the 30% ITC with the state incentives, solar PV installations in Montana become pretty reasonable.
This is the general forecast for solar energy in Montana, but keep in mind that each home is different. A reputable solar installer in your area can conduct a thorough inspection of your property.
Residential Solar Power Return on Investment in Montana
A residential PV system’s ideal installed capacity is determined by characteristics unique to each residence.
A family with high energy demand, for example, will require more PV panels to obtain all of its energy from solar power.
In addition, the amount of available rooftop space limits the size of a PV system. Solar PV systems for the residential sector, on the other hand, are typically around 5 kilowatts.
The following is a breakdown of the costs and savings for a 5-kW PV installation in Montana:
– A 5-kW PV system in Montana costs around $20,000 before incentives.
– However, all PV systems over 2-kW are eligible for a fixed $2000 rebate, bringing the total cost down to $18,000.
– After deducting the federal tax credit of 30%, or $5400, the price drops to $12,600.
– There is also a $500 additional tax credit per taxpayer, up to a maximum of $1000. Most houses will receive the whole $1000, lowering the cost of a PV system to $11,600.
– With a net investment of $10,950, the PV system will save over $650 in the first year of operation.
– The payback period is estimated to be roughly 13 years. Solar panels come with a 25-year warranty, so you’ll have 12 years of free power once you’ve recouped your investment. Over the life of your PV system, you’ll make roughly $14,000 in net profit.
– Does solar power raise the value of a home? Your home will increase by over $13,000, but you will not face increased taxes!
– The 5-kW PV systems have an environmental impact equivalent to growing more than 100 trees every year.
If it weren’t for Montana’s cheap electricity prices, which average $0.11/kWh, the payback period would be even shorter. This low-cost energy is available, however, thanks to fossil-fuel-powered power plants.
Governments are pledging to reduce their emissions. Thus stricter regulations for power plants of this type may be implemented soon, driving up energy prices.
This, on the other hand, means that households who go solar will save even more money!
The above financial breakdown is based on a 5-kilowatt system and Montana’s typical weather conditions.
Because all project sites are different, no two systems operate precisely the same. To receive a cost breakdown that fits your home, use our UV panel, the installation calculator.
PV systems that have the highest performance, on average, have the following characteristics:
– The solar array is located on a rooftop with a south-facing orientation.
– There are no impediments that could impede sunlight in the area.
– The house is in southern Montana, where the sun shines more throughout the year.
If you want to know how much sunshine is available where you are, the NASA Atmospheric Science Data Center website is a fantastic place to start.
Enter your coordinates to access a variety of meteorological data tables, such as solar radiation rates broken down by month and solar panel tilt angle.
Contact our experts to learn more about solar power and connect with the top solar installers in Montana. They can analyse your property and provide a total price for a solar PV installation.
Solar Power Incentives, Tax Breaks, and Rebates in Montana
The vast range of governmental incentives in rebates, tax exemptions, and tax credits is one of the strongest arguments favouring solar power in Montana.
It’s unusual to come across all three forms of advantages in the same state! Furthermore, the net metering legislation favours domestic solar electricity, and don’t forget about the federal tax credit of 30%.
Compared to other states with higher electric rates, Montana has cheap power and no feed-in tariff, maximising monthly cash savings. However, local rebates and tax benefits offset this, making the inexpensive solar PV system.
RPS of Montana
The rebates, tax exemptions, and tax credits available in Montana are the most compelling arguments for adopting solar.
The Montana Renewable Portfolio Standard mandated all utilities to get 15% of their power from renewable sources by 2015, which was a great short-term goal.
However, if the RPS is reviewed and amended with a higher aim and new deadline, the prognosis for solar power might be much brighter.
This could result in local utility performance payments, which are currently unavailable.
Tax Credit in Montana
On top of the 30% federal tax credit, solar PV systems in Montana are eligible for $500 per taxpayer, up to $1,000 per household tax credit. In the case of a 5-kilowatt solar PV system, this equates to a savings of $6,400 in upfront costs.
If you choose to go solar with a low-interest loan, the tax credit becomes even more appealing: the money you would have paid in taxes becomes available to start paying the loan instead!
A word of advice: If you’re thinking about going solar, you should do so before the 30% ITC expired in 2020.
Unless the government extends the benefit, it will be reduced to a more modest 10%, and homeowners who wait too long would miss out on an additional 20% tax credit.
Tax Exemption in Montana
In Montana, solar PV installations are exempt from sales and property taxes. The sales tax exemption delivers instant cash savings on your solar energy purchase, whereas the property tax exemption provides a year-over-year benefit.
It’s fantastic to think you can go solar without paying any taxes and still claim a massive tax break of more than 30% of your investment.
Are there any solar energy rebates in Montana?
When it comes to solar incentives, Montana is a one-of-a-kind instance.
Any PV system with a capacity of 2 kW or more receives a fixed $2000 rebate, which means that the impact is more significant for smaller solar systems: Although $2000 is only 10% of a $20,000 investment, it accounts for more than 22% of the upfront cost of a $9000 2-kilowatt system. In the example of a 5-kW PV system, the rebate plus the overall tax credit totals $8400, or 42 per cent of the system’s cost.
You can use the full benefit within the first year of your PV system’s operation.
Electricity Rates in Montana
Montana has a low cost of electricity: $0.11/kWh, which is two cents less than the national average. On the other hand, solar power is even cheaper in the long run, saving you roughly $14,000 over 25 years compared to buying all of your energy from the grid.
Furthermore, you avoid using high-carbon energy from fossil-fuel-fired power plants by using solar energy.
Is Net Metering Available in Montana?
Montana has a firm net metering policy, which means that any excess energy generated is returned to you as a credit at the total retail price. The only negative is that accrued credits expire without reimbursement after 12 months.
You can use solar power to cover 100 per cent of your energy needs, but you can’t oversize your system and charge the utility provider for excess production.
Another constraint is that the net metering system cap is 50 kW. However, this applies only to commercial and industrial customers: a home doesn’t require 50 kW of solar power unless it’s a massive palace.
The Montana Electric Cooperatives Association (MECA) has a lower system cap of 10 kW, although it is still large enough that it will not limit most residential PV systems.
A state-wide interconnection policy mandates all net-metered PV systems to have a redundant external disconnect switch.
This raises your initial costs, but don’t worry; you’ll be compensated with plenty of refunds and tax benefits!
Hiring a reputable and professional contractor is the best method to ensure that your PV system is appropriately sized and integrated. Please contact our specialists to find the top solar installers in Montana.
Is it possible to finance a home in Montana with no money down?
We recommend a 2-kW solar panel installation for the best return on investment. There is no legal framework in Montana for third-party ownership of PV systems. Hence there are no solar leases or Power Purchase agreements available.
However, if you take out a low-interest HELOC, you may go solar with no money down (home equity line of credit).
Loan for solar energy
Low-interest loans often outperform cash purchases in dollars returned per dollar spent from your pocket.
The typical technique for financing a solar PV system is to pay for it over 10 to 15 years while receiving all relevant tax credits. Then, thanks to a mix of tax benefits and yearly savings, you may pay off a significant chunk of your debt.
The maximum return per dollar spent is attained with a small PV system in Montana, where all PV systems above 2 kW receive the same rebate and state tax credit.
-A 5-kW PV system financed with a loan saves roughly $6000 over 25 years.
– A 2-kW system, on the other hand, saves roughly $3500. If you don’t have enough equity to buy a 5-kW system with a loan, you can still save over 60% with a system that is only 40% the size!
What’s Better for Montana Homeowners: A Cash Purchase or a Loan?
Because there are so many aspects that determine which option is best for you, there is no simple solution to this question. However, the following broad recommendations can assist you in making your decision:
Buying a photovoltaic system in Montana
If you have the cash and want to maximise your total savings from solar electricity, buying a PV system in Montana in cash is recommended. This choice will save you about $14,000 over 25 years, but you must factor in a 13-year payback period.
Getting financing to buy a PV system in Montana
If you have equity in your home and want to reduce your upfront costs, financing a PV system in Montana is recommended. Over 25 years, a 5-kW system will save you roughly $6,000.
If you want to get the most bang for your buck, go for a 2-kW system, the smallest amount that qualifies for a refund!
What is the procedure for installing solar panels in Montana?
Because of Montana’s interconnection policy, the PV system installation process is standardised. However, to minimise delays and additional expenditures, we still recommend that you choose solar panel installation professionals knowledgeable about the process.
If you’ve already decided to build a solar PV system for your Montana house, the process is pretty straightforward, and you can get started right away:
1. Complete our solar installation form by entering basic property information.
2. Get thorough bids from reputable solar contractors in your area.
3. Compare quotes and select the most appropriate solution for you. At the very least, three are recommended.
4. Have your contractor install the PV system, and you’ll be able to use clean energy while also benefiting the environment.
The installation process is swift and painless, taking only 3 to 4 days from when you sign the contract with your preferred contractor.
Remember that all of the information on this page is based on a 5-kilowatt system and Montana’s average sunlight conditions. Once you receive a quote from a reputable solar installer in your area, you will know the exact pricing and expected system performance.
Because of all the available state incentives and tax exemptions, Montana is an excellent place for solar power investors to make money. Despite the low cost of electricity in Montana, the vast range of incentives available makes solar power a good investment: you can get a $2,000 refund, a $1,000 tax credit, and a complete exemption from sales and property taxes.
When you subtract the federal government’s 30 per cent ITC, you’re left with a PV system that’s practically half the price!
The Renewable Portfolio Standard can be updated, and a new renewable energy goal can be set to improve the circumstances for solar power in Montana. This could result in even greater rebates and performance payments from local utilities.
People Also Ask:
Solar Power laws in Montana
Going solar in Montana is a terrific way to save money on your energy bills. State law requires private-owned utilities to provide complete retail net metering to their consumers. Montana residents can also claim a personal tax credit when constructing a renewable energy system on their land.