Solar Panel Cost In 2023 (Homeowner’s Installation Savings Guide)
By Karsten Neumeister /
Most Montanans find that going solar is a great investment, as solar electric systems typically pay for themselves in around 13 years and provide additional energy savings after that totaling over $15,000, on average!
Montana ranks 43rd in the country for the rate of solar adoption, according to the Solar Energy Industries Association (SEIA).1 However, most Montana residents who switch to solar find that it’s worth it, thanks to below-average equipment costs and below-average energy consumption.
All-in system prices are lower in Montana than in most states, and the local solar incentive programs help bring down costs even further. The average cost of solar panels in MT is around $16,000 after the federal tax credit, but energy savings overcome this upfront cost and provide net savings over time.
In this guide, we’ll be discussing the solar conversion process from start to finish so that you’re prepared for each step. You can also use the links below to jump to a particular part of the process for more information.
Step 1: What to Consider When Buying Solar Panels
Step 2: Getting a Quote from a Solar Provider
Step 3: Signing a Solar Contract
Step 4: What to Expect on Solar Panel Installation Day
Step 5: Final Inspection for Installed Solar Panels
Step 6: Permission to Operate (PTO)
Solar is a great option for most Montanans, but given the equipment costs, your first course of action should be to confirm that it will be beneficial for your home in the long run. We’ll discuss how to go about assessing your home’s solar viability in the following sections.
In general, Montana is a good place to go solar, but you should confirm that your property is a good fit first before investing $20,000+ on your solar energy system.
We recommend starting by getting an idea of how many panels you need to offset your energy demands. You can use our solar calculator for this estimate. The typical solar array size in your area is 9 kilowatts (kW), so you can use that as a point of comparison.
If your recommended size is significantly bigger than the average, then you might have some factor at play that’s limiting your production. Common limiting factors include:
It’s a good idea to compare your weather conditions to the average in the state as well. Photovoltaic (PV) panels generate less energy in cloudy conditions and under snow, so particularly cloudy cities or snowy areas will see less value from solar adoption.
Montana sees around 189 sunny days per year and 40 inches of snow annually.2,3 If your city sees fewer sunny days or more snowfall on your panels, then solar will likely be a bit less beneficial and valuable than they would be in most other areas in the state.
Another crucial thing to consider when assessing solar viability is the net metering program provided by your utility company. Net energy metering (NEM) is a policy that provides energy credits for every excess kilowatt-hour (kWh) your panels produce and send to the electric grid. The credits you accrue pay down future bills, reducing your effective electricity rates.
The Public Service Commission (PSC) in Montana mandates net energy metering for all residential solar customers, which is outstanding. This mandate includes investor-owned utilities (IOUs), municipal electric companies and electric cooperatives.
However, it doesn’t set a specific credit rate that you’re guaranteed to get paid for each kWh you export. The closer to the retail rate you’re offered, the more beneficial your system will be overall.
NorthWestern Energy offers the full retail value per kWh, which is great.4 Any unused credits carry over and reset at the end of the annual billing cycle. The Montana-Dakota Utilities Company uses an avoided-cost rate, which is closer to the wholesale rate per kWh and ends up being much less beneficial over time.5
Central Montana Electric Power Company (CMEPC) also uses an avoided-cost rate for customers.6 This is still helpful for pushing up long-term energy savings, but it’s not as good as the retail rate.
The table below includes some statistics for solar system costs and overall value in Montana as compared to the U.S. as a whole. These stats should help illustrate how valuable solar is in your area compared to other states.
|Montana State Average||United States National Average|
|Solar Power System Size Required||9 kW||9 kW|
|Typical Cost Per Watt to Install Photovoltaic (PV) Equipment||$2.54||$2.66|
|Average Total System Cost Before Federal Solar Income Tax Credit||$22,860||$23,940|
|Average Federal Solar Tax Credit Value||$6,858||$7,182|
|Average Total System Cost After Federal Credit||$16,002||$16,758|
|Average Panel Payback Period||13 years||12 years|
|Average Lifetime Savings of Converting to Solar||$15,189||$22,379|
If you determine in your preliminary research that solar is a good option for your property, then you can move on to researching the different solar financing options to see which is the most suitable for you and your financial situation.
If you haven’t already, now is a good time to use our solar calculator to see how many panels your home requires. You can multiply the total size in watts by the average cost per watt of $2.54 in the state to get a roundabout total cost for your Montana solar system.
Remember that your panels are expected to pay for themselves and provide additional net savings. Your all-in cost might seem intimidating at first, but the savings over time should help ease any concerns you have about spending thousands on PV equipment.
There are four main ways to pay for your solar system:
Montana also offers the Alternative Energy Revolving Loan Program, which is a state-funded loan program for Montana homeowners, businesses and nonprofits installing solar panel systems. It provides low APRs and down payment requirements for loans up to $40,000.7
Now that you have your ideal financing option in mind, you can start looking for clean energy system installation companies in your area. We’ll discuss some research you should do on providers before requesting an estimate in the following sections.
According to the SEIA, there are around 20 installation companies that service the State of Montana.8 While this might not seem like a lot, researching all of these to see what each offers can quickly become overwhelming.
We recommend looking for the following qualities in an installer to make sure you get quality equipment and service:
To help get you started in the right direction, we’ll include a list of some of our top-rated solar companies in Montana below:
Within a day or two of requesting a quote from a solar company, a sales rep should reach out to you to get some additional information. They should ask for a copy of a recent energy bill, set up an in-person inspection of your roof and property and ask some additional questions about your energy consumption.
Once the information is gathered, and the in-person inspection is completed, your solar project will move to the design team, which will create schematics for a system that will fit your roof and meet your energy needs. When the design is completed, you’ll receive a solar proposal, and your sales rep should connect with you again to discuss the proposal.
The solar quote contains all of the information you need to decide if this is the right company and system for you. Below is a list of things you should see on your proposal:
It’s a good idea to get to the proposal step with a few different companies so that you can compare quotes and choose the one that is most beneficial to you. Some companies will offer a price match if they know you’re getting multiple quotes, too, and others might offer add-on products or other perks to make their deal more appealing to you.
PV panels and inverters are common among all solar arrays, but you might want to include additional products in your solar setup. You can ask each company that you request a quote from to include any add-on products in your estimate.
Below is a list of some of the more popular add-on options that Montanans choose that you might want to consider:
Once you have estimates for your system and get a chance to compare them to find the one that suits you best, you can sign the contract to get the preparation and installation processes started. We’ll explain what to look for in your contract and what to expect after signing in the sections below.
The first thing we recommend looking for in your solar contract is the warranty coverage included with your system. There are three types of solar warranties to look for, including the following:
Most Montanans wait between three and six months between the time they sign the contract and the time their panels are installed and connected to the grid. There are a few things that can extend this timeline a bit. These include:
Snowfall can also make rooftop solar power system installation dangerous, so the weather in your area can also lead to short delays.
Permits are required for solar installations throughout Montana — they’ll need to be filed for and usually come with a mandatory permit fee.
The good news is your installer should be the one filing for the permits, but you’ll be responsible for the application fee. You can ask your installer about these fees or check your solar proposal, which should include them in the cost breakdown.
The fee you’ll have to pay depends on where you live, as building permits and electrical permits are governed by individual municipalities. In Montana, these fees can range between $40 and $400.10 Below are some examples:
Another application your solar installation company should handle is for interconnection. Interconnection governs how your solar system and the grid interact with each other, and it’s a mandatory step for grid-tied systems to access net metering programs.
All electric companies in the state require that an application be filed for grid-tied system interconnection, and some may have a fee for applying. Much like building and electrical permits, your installer should complete the interconnection application, but you will be on the hook for the application fee if there is one.
NorthWestern Energy has an application available online, and your installer will need to file this along with a line diagram and site plan for your system.15 Nearly all residential solar customers will use the Level 1 application. There is no fee for applying.
The Montana-Dakota Utilities Company also requires a printed application with site plans, and it doesn’t charge any fee for applying.16
While the application process is quick and straightforward, enrolling in interconnection can extend your installation timeline by weeks if your energy provider is backed up with inspections. However, it’s worth just about any wait, as interconnection gives you access to the massively beneficial net energy metering solar perk.
Solar installations take between four and eight hours on average in Montana. Your installer should show up to begin preparing your roof in the morning and you should expect them to work through the afternoon. Many installers will be able to complete the installation in one day.
Most solar customers ask, “do I need to be home for solar panel installation?” You should plan on at least one adult being home for the entire day when your panels are being installed. Most of the installation takes place outside, but your technicians will need interior access throughout the day to install add-on products, connect to your electric panel and complete the panel installation.
Since the process of waiting for your utility provider to inspect your system to approve interconnection can take quite some time, some installers will schedule the inspection on the installation day to save time. Solar inspections take about 30 minutes on average, so this can add a bit of time to your installation.
After the installation is completed, the solar company should schedule a final inspection with your building department. Since your system is up and running at this point, the inspection might seem non-essential. However, it’s required to close out your permits, and since open permits can cause issues if you go to sell your home, it’s an important part of the process.
If you just have panels installed, some building inspectors will only do an exterior inspection, which means you may not need to be home for the inspection.
Other inspectors might require interior access, in which case your installer should coordinate an inspection for when you can be home. Most inspectors will require interior access if you have solar batteries or other add-on products installed in your home.
In either case, you shouldn’t be hit with any inspection fees unless you miss a scheduled inspection. Some municipalities still won’t charge anything, while others will charge a re-inspection fee.
After the building inspection is completed, no other officials will inspect your system to make sure it continues to work properly. However, some panel manufacturers offer free solar monitoring apps for homeowners like you to track production and consumption. Your installer should be able to help you connect your system to an app if one is available.
The last step in the process, if it hasn’t been done already at this point, is getting the final inspection completed by your power company. Remember, some installers will schedule this on the installation day, so this might be done by the time your building department gets around to closing out your permits.
If it hasn’t been completed, your solar contractor will schedule the inspection. You shouldn’t need to be home for this part of the process.
Once the inspection of your off-grid system is completed, your utility company will issue permission to operate (PTO), which is your formal approval to start using your panels. Finally, your installer can turn on your system or explain to you how you can turn them on. They should also show you how to use the emergency shut-off switch located outside your home near your electric meter.
This is a good time to ask your installer about a solar monitoring app if you don’t already have access to one.
The last thing you need to know is the emergency contact number for your electric company, which you should call after dialing 911 in case of an emergency. We’ll list some emergency numbers for the larger power providers in your area below:
After your final inspections are completed, you can relax and enjoy the many benefits your panels are expected to provide. Not only are you doing your part to reduce pollution and emissions by going solar, but your system will also begin saving you money each month on your energy bills.
You’ll enjoy energy independence and avoid future energy rate hikes. Over time, your home solar savings should add up to around $15,000 or more.
You’re also expected to see a return on investment even if you sell your home after converting to solar. It might not be the same value, but you’ll still see an upside since panels make your home more valuable.
We get questions from Montanans all the time about the process of going solar in the Treasure State. We’ll answer some of the more common ones we see below.
Montana is one of the few states that hasn’t yet passed solar rights laws. As such, homeowners associations (HOAs) can prohibit panel installation. If you live in an HOA, we recommend contacting the board to ask about PV panel installation before going through the research and quoting process.
Montana sees a below-average number of sunny days per year and has average energy consumption, and residents enjoy slightly below-average prices for electricity. As such, solar isn’t as valuable in Montana as it is in many other states.
However, solar is still worthwhile for most Montanans. The average resident will see energy savings that offset their installation costs in just 13 years. After that point, additional savings are expected to hit over $15,000. The solar incentives and rebates in MT also help make solar conversion more valuable in the area.
Most solar panels last for around 25 years, and some can last for 30 or more years. Montana sees minimal extreme weather, so there isn’t much to threaten the lifespan of PV equipment in the area. As such, most homeowners in the state should see 25 to 30 years of useful life from their solar equipment.
Montana currently doesn’t charge state sales tax on any products, so, technically, all PV equipment in the state is exempt from taxation at the point of sale. The state also offers the Renewable Energy Systems Exemption, which is a property tax exemption. This prevents your taxes from going up even though your panels bump up your home value.
No, Montana currently does not offer a state tax credit for solar arrays. However, all taxpayers in the state are able to take the federal tax credit if they haven’t taken it in the past. This is for 30% of the total system value with no cap on credit value.
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