Montana Solar Incentives & Net Metering (2026)
Written by Aditya Patil · Last updated 2026-09-24
While Montana doesn't have the highest electricity rates in the nation, its strong full retail net metering policy for NorthWestern Energy customers and a local property tax exemption make solar an increasingly viable way to lock in energy costs—especially as electricity prices have climbed sharply in the last year.
$102
Avg. monthly bill
15.14¢/kWh
Avg. rate
+17.5%
Rate increase (1 yr)
Full Retail
Net metering
NorthWestern Energy
Net metering & export rules
Montana law guarantees excellent net metering terms—but only for customers of regulated public utilities, which in practice chiefly means NorthWestern Energy.
Under this statewide policy, NorthWestern Energy must offer 1:1 full retail net metering for home solar systems up to 50 kW. This means the utility values the excess electricity your panels send to the grid at the exact same rate they charge you for pulling electricity from the grid. You receive a monthly 1-for-1 kWh credit for any excess generation, which is netted directly against your usage.
The catch: the annual settle-up. Your credits roll over from month to month, but once a year (on Jan 1, Apr 1, Jul 1, or Oct 1, depending on enrollment), any unused credit balance is forfeited back to the utility. There is no cash payout for leftover credits. This makes accurately sizing your solar system to match your historical usage crucial; oversizing your system won't earn you extra money.
Rural Electric Cooperatives are Exempt
If you get your power from a rural electric cooperative like Flathead Electric or Yellowstone Valley Electric, the state's 1:1 net metering law does not apply to you. Co-ops are governed by their own elected boards and are free to set their own solar policies. Some may offer full retail credit, while others may only pay a lower wholesale or avoided-cost rate. Always confirm the current local policy with your co-op before going solar.
Montana solar incentives & tax breaks
Montana offers a property tax break for renewable energy systems, but state-level tax credits have been discontinued. Remember that all Montana homeowners can still claim the federal residential clean energy credit (the 30% solar tax credit) on their federal taxes, provided they have tax liability.
| Program | Details | Status |
|---|---|---|
| Nonfossil Energy Generation Property Tax Exemption | Exempts up to $20,000 of the appraised value that a qualifying nonfossil (renewable) energy generation system — including solar — adds to a single-family home from Montana property tax, for 10 years following installation. The cap is $100,000 of added appraised value for multifamily residential or nonresidential buildings. Low-emission wood/biomass combustion devices qualify under the same statute. | open |
| Residential Alternative Energy System Tax Credit (Repealed) | Historically up to $500 per taxpayer, equal to the cost (including installation, less any grants received) of a qualifying nonfossil energy generation system (including solar) used to heat the taxpayer's principal home, or of a low-emission wood/biomass combustion device. This credit was repealed and is no longer available for any system. | closed |
Montana electric providers
A significant portion of Montana is served by NorthWestern Energy, which is regulated by the Public Service Commission (PSC). However, many residents are served by independent cooperatives.
| Utility / Cooperative | Residential rate | Customers |
|---|---|---|
| NorthWestern Energy LLC - (MT) | 14.23¢/kWh | 328,125 |
| Flathead Electric Coop Inc | 9.67¢/kWh | 63,317 |
| Yellowstone Valley Elec Co-op | 13.35¢/kWh | 21,182 |
Residential rate and customer counts are from EIA-861 data (see Data sources below).
Lease vs. buy in Montana
Because Montana offers 1:1 net metering for many residents, owning your system outright (via cash or a solar loan) often yields the best long-term financial return. However, if you do not have enough federal tax liability to claim the 30% federal tax credit, a solar lease or Power Purchase Agreement (PPA) can be a viable alternative, as the leasing company can claim the commercial credit and pass savings on to you. See our full lease vs. buy vs. PPA guide for more details.
Estimate your own numbers
Ready to see what solar looks like for your specific roof and usage? Use the solar calculator to map out costs, potential savings, and payback periods based on real data.
FAQ
What is the current solar net metering policy in Montana?
Montana law requires regulated utilities, primarily NorthWestern Energy, to offer 1:1 full retail net metering for residential solar systems up to 50 kW. Excess electricity generated during the day rolls over to offset future usage as a monthly kWh credit. However, any remaining credit balance at the end of your annual 12-month billing cycle (your settle-up date) is forfeited to the utility without cash compensation.
Are there any state tax credits for solar in Montana?
No active state tax credits remain for residential solar in Montana. The previously available Residential Alternative Energy System Tax Credit (up to $500) was officially repealed by the state legislature. However, the state does offer a Nonfossil Energy Generation Property Tax Exemption, which shields up to $20,000 of your solar installation's added value from property tax assessments for 10 years.
Does my local electric cooperative offer full retail net metering?
Not necessarily. Montana's statewide net metering statute specifically exempts rural electric cooperatives. Cooperatives like Flathead Electric and Yellowstone Valley Electric set their own independent net metering rules, credit rates, and true-up periods at the board level. You will need to check directly with your local co-op for their exact interconnection terms.
Data sources
Last updated 2026-09-24
- U.S. Energy Information Administration — Electricity Data Browser — accessed 2026-09-24
- NREL PVWatts — accessed 2026-09-24
- NREL Solar Resource Data — accessed 2026-09-24
- LBNL Tracking the Sun (public data file, host-owned residential systems) — accessed 2026-09-24
Written by Aditya Patil