Is solar worth it in Montana?
At Montana’s average rate of 13.7¢/kWh and about 1350 kWh per kW of panels a year, a typical home pays back its system in roughly 14.2 years on electricity savings alone — no federal credit, which ended for buyers at the end of 2025 — then keeps saving. Run your own numbers below.
Sources: EIA · NREL · IRS. No federal credit — it ended 31 Dec 2025.
Independent estimate for guidance only — not a quote or advice. Retail net metering helps, but low power prices plus the end of the federal credit make for a long payback here.
What drives solar payback in Montana
Montana homeowners pay about 13.7¢/kWh, which is 4.7¢ below the national average. A rooftop here generates roughly 1350 kWh per kW each year — about the typical US figure. On exports, Montana offers full retail net metering: Retail net metering helps, but low power prices plus the end of the federal credit make for a long payback here.
Montana electricity price trend
Average residential rate, monthly, May 2023 – Apr 2026. Up 9% over the period.
Source: U.S. Energy Information Administration (EIA), Electric Power Monthly · range 11.38–14.81¢/kWh
A worked example
For a Montana home with a $120/month power bill (typical household usage at Montana’s rate):
That nets out to a payback of about 14.2 years — shorter than simply dividing net cost by year-one savings, because power prices climb ~2.5%/yr so your savings grow each year. Assumes 3.00 $/W installed before incentives and a typical 40% self-consumption; your actual cost, roof and usage will differ — adjust the calculator above.
Who supplies your power in Montana
Montana's electricity market is dominated by NorthWestern Energy, the investor-owned utility serving most of the western and central parts of the state, including Billings, Bozeman, Helena and Missoula. Eastern Montana is largely served by Montana-Dakota Utilities (MDU). Beyond the two IOUs, a large share of rural Montana gets its power from electric cooperatives — Flathead Electric Cooperative, Missoula Electric Cooperative, Yellowstone Valley Electric and others. The distinction matters for solar: the net-metering rules below bind only the investor-owned utilities. Co-ops write their own policies, and terms differ enough that members should get theirs confirmed in writing before committing to anything.
What you’re paid for what you export
The good news first: Montana's investor-owned utilities must credit your exports at the full retail rate, one kilowatt-hour out cancelling one in — a real asset in a state where power is cheap. Surplus credits roll forward month to month, so summer overproduction effectively gets banked against winter use, and residential systems up to 50 kW qualify. The bad news arrives at the annual true-up, when any leftover credit balance is typically forfeited or paid out at a low avoided-cost rate instead of retail. Overbuilding gains you nothing, in other words; match the system to your annual consumption. And if a rural cooperative supplies your power, none of this is guaranteed — co-ops aren't bound by the state's retail net-metering rule, so ask for their export terms separately.
Montana incentives & taxes in 2026
Thin is the polite word for what Montana offers. What exists: a property-tax exemption covering the added value of a residential renewable-energy system for a number of years after installation, so the panels themselves won't inflate your tax bill. What's doubtful: the state's older Alternative Energy Systems income-tax credit has been altered over time and may no longer be available at all, so verify its current status before letting it anywhere near your calculations. What's absent: any SREC or performance-payment market — nothing here resembles New Jersey's SuSI.
The 30% federal credit ended on 31 December 2025 and can now only reach a homeowner indirectly through a lease or PPA. Check the current state and utility programs on DSIRE’s Montana list, then type any incentive into the calculator above to see how it shortens your payback.
What solar costs in Montana
Budget $2.90 to $3.40 a watt here, a notch above going rates elsewhere in the country. The premium is structural: a small, spread-out market, long travel distances and few installers competing outside the towns. A 7-8 kW home system works out somewhere in the low-to-mid $20,000s before incentives, and the sticker price is the price you'll actually finance. That makes competitive quotes worth more in Montana than in high-volume markets — get two or three.
The honest verdict for Montana
Call Montana what it is: a long-payback state. Full retail net metering is the one strong card in the hand, but it can only stretch 13.6 cents/kWh power so far. With no SREC market and only a property-tax break on the state side, the return comes almost entirely from avoided electricity at a low rate — which pushes simple payback well into the mid-to-late teens for most owned systems. That can still suit heavy users, off-grid ambitions or people who plan to stay in the house for decades. Just go in expecting a slow, modest return rather than a quick win.
Sources for this page
Driving electric — or heating electric — in Montana?
Your home electricity rate also sets what it costs to charge an EV and whether a heat pump beats a gas furnace. See the Montana EV charging cost and the Montana heat pump vs gas comparison.