2022 Idaho Solar Incentives
Now is the best time to go solar in Idaho! With the new Inflation Reduction Act, you can claim 30% of your Solar System Costs!
Our team will help you navigate the latest solar updates to capture the best value for your project.
Inflation Reduction Act (IRA)
This most recent bill, creates more of an incentive for Americans to invest in solar and, additionally, opens the possibility for otherwise overlooked communities to go solar.
Here is what Idahoans need to know:
- 30% tax credit for homeowners who install solar until 2032.
- Note: If you installed solar this year, in 2022, and were expecting a 26% credit, you can now claim a 30% credit.
- Allows nonprofits, schools, and municipalities to take a cash payment in lieu of the 30% tax credit. As entities that don’t pay taxes, these institutions were previously unable to benefit from the credits.
- Solar battery storage installations are now eligible to claim 30%
- Expands the Rural Energy for America Program (REAP) to help farms and rural small businesses to go solar.
- Provides funding to help electric cooperatives and tribal communities go solar.
Contact Creative Energies at 208.354.3001 or info@CEsolar.com today for the latest solar incentives in your area.
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Federal Tax Credits, Rebates, Incentive, and Grants for Solar (Updated August 2022)
Solar IRA Details for Residential and Commercial Projects
- The new IRA bill allows homeowners and business owners to claim 30% of the solar power system cost. Although the act officially begins at the end of the year, those installing solar in 2022 can retroactively claim 30%. A tax credit is a dollar-for-dollar reduction of the income tax you owe. If you can’t use the full value in one year, you can roll over the remainder to the next year. You should check with a tax adviser to make sure you can claim the entire value.
- The Solar ITC extension is included in the stimulus package legislation H.R. 133.
- Read more in depth about the IRA bill here
Solar Backup Batteries Qualify for Federal Tax Credit
- If you add a battery for backup power battery storage like the Tesla Powerwall or SolarEdge Energy Bank to your solar system, they also qualify for the tax credit at 30%.
Commercial Solar Federal Tax Credit
- The commercial solar federal tax credit at 26% applies to all kinds of businesses, including farms, ranches, agricultural businesses, breweries, car dealerships, coffee shops, restaurants, outdoor industry retail shops, bike shops, and more.
USDA Grants for Solar
- The United States Department of Agriculture Rural Energy for America Program (REAP) grants provide guaranteed loan financing and grant funding to agricultural producers and rural small business owners to purchase or install solar energy systems. Our team can help you go through the application for solar grants.
Local Idaho Solar Incentives
Residential Alternative Energy Tax Deduction
Idaho residents may qualify for a tax deduction of 40% of the cost of their solar in their first year, and 20% for the following three years. The maximum deduction is $5,000 per year and not to exceed $20,000 total.
The deduction for full-year residents is calculated on the Idaho Supplemental Schedule 39R, section B, with the result transferred to Idaho Form 40. For part-year and non-residents of Idaho, the deduction is calculated on Idaho Form 39NR, section B, with the results transferred to Idaho Form 43. The tax forms and instructions for Idaho residents can be found here.
What is important to understand is that it is a deduction of your taxable income not a tax credit. Meaning you subtract 40% of the project costs from your total income. So, you apply your tax rate to your deduced annual income.
For example, if someone earns $110k and they buy a $25k PV system, they would take 40% of the total cost and subtract it from their taxable income. 40% of $25k is $10k. However since the maximum deduction is 5k, that will be the amount deducted. They subtract $5k from $110k to get $105k. Then they would calculate their tax as $100k*6.5%=$6,825. They otherwise would have had to pay $110k*6.5%, which equals $7,150, so their savings in the first year is $325. The next 3 years, they get to reduce their taxable income by 20% of the project cost, so they end up with half of the savings of the 1st year, which is $162. So with the 4 years combined, the homeowner would save $811.
This is just an example, every situation is different. Read up on these resources or contact your tax expert.
Idaho Solar Rebates
At this time there isn't a local community solar program in Idaho, but more towns are going #SolarForGood with clean energy commitments and Creative Energies has worked on several community-sponsored solar programs in the past. We closely follow and advocate for renewable energy policies and programs, so we'll keep you updated.
You should check with a tax adviser to make sure you can claim the entire value of solar tax credit(s).