Is Solar Worth It in Montana? (2022 Homeowner's Guide)

Here’s a quick overview of solar viability in Montana:

  • Montana ranks 43rd in the country for solar installations.*
  • The average electricity rate is 11.24 cents per kilowatt-hour.**
  • The average solar payback period is 13 years.***
  • Homeowners are eligible for the Renewable Energy Systems Exemption and the federal solar investment tax credit (ITC).
  • The average homeowner saves $15,189 over the lifetime of their solar system.***

*According to the Solar Energy Industries Association.1
**Data from the Energy Information Administration.2
***Calculated assuming the system is purchased in cash.

Ecowatch Author Dan Simms

By Dan Simms, Solar Expert

Updated 9/19/2022

Why You Can Trust EcoWatch

Our solar experts have conducted hours of research and collected dozens of data points to determine whether solar is a good fit for homeowners in each state. We’ve also unbiasedly ranked and reviewed hundreds of solar installers to empower you to make the right choice for your home. 

Is Montana Good for Solar Energy?

In this article, we’ll discuss whether solar is worth it for the majority of Montana homeowners, but whether solar panels are worth it will ultimately depend on your home’s configuration and your energy needs. To speak with an EcoWatch-vetted professional who can help you determine whether solar is worth it for your Montana home, follow the links below.

Jump to Section:

  1. Figure Out if Solar Panels are Worth It in Montana
  2. Benefits of Solar Energy in Montana
  3. What to Look Out For When Considering Solar in Montana
  4. Is Solar Worth it in Montana?
  5. Frequently Asked Questions

 

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Montana ranks 43rd in terms of solar conversions, meaning the solar industry is less prevalent there than in many other areas throughout the country. Considering the slow adoption and the below-average electricity rates residents enjoy, Montana homeowners are left to wonder if going solar is worth it. Generally speaking, it is, but there are quite a few things you need to consider to ensure your system will save you money. Below, we’ll discuss the factors that affect solar viability for your home, as well as the benefits you’ll enjoy if you do decide to go solar. We’ll also provide some information on things you should look out for when moving forward with solar conversion in Montana.

How to Figure Out if Solar Panels are Worth It in Montana

Converting to solar is a great option and a sound financial investment for many Montana homeowners, but it’s not ideal for everyone. Below are some things to consider while you assess your home to see if solar panels are worth it.

What’s Your Home Electricity Consumption?

Your home’s monthly energy needs are often a good indication of whether solar could be a good investment for you. Solar panels save you money on your electric bills, so the less you pay for energy, the fewer savings you’ll enjoy. An average monthly electricity consumption of 500 kilowatt-hours is a common benchmark for solar viability. If you use more than this amount per month, the likelihood is that solar will be worthwhile for your home. Montana homeowners use an average of 858 kWh monthly, which is well above this benchmark. As such, most residents will find that solar is a good option, at least in terms of energy needs. You can check your average monthly consumption on your past electric bills.

How Much Is It To Go Solar in Montana?

The total price to go solar in Montana depends on many factors, but residents pay an average of $2.54 per watt, which is well below the national per-watt price of $2.66. The typical system size requirement in MT is 9 kilowatts, meaning the standard total will be about $22,860 before the federal tax credit or $16,002 after.

Solar panels provide the most value where electricity rates or energy usage is high. Montana residents use above-average energy but pay less than the national average per kWh. Coupled with the low price of solar equipment, the above-average energy needs mean solar will be a great investment for most homeowners in the area.

What’s the Payback Period for Solar in Montana?

man installing solar panel on a hazy day Solar panels let you offset your electric bills and save money every month they’re functioning for 25+ years of expected life. Those savings almost always add up to cover the entire expense of the system and then continue to provide savings. The timeline for the savings to pay off the those expenses is referred to as the solar payback period, and it’s a helpful metric for determining how well your solar power system will serve you. The average payback period in Montana is 13 years, which is slightly above the national average of 12 years. Most homeowners in the area will recuperate their total system expense in between 10 and 16 years. You can estimate your timeline using a solar calculator or by having a solar installer determine it for you. If your payback period is longer than 16 years, you’ll still likely save money, but your overall return on investment will be less than the average in the state.

What Are Average Buy-Back Rates in Montana?

Net metering is one of the most popular state solar incentives in the country, and many states provide energy buy-back programs to make converting to clean energy more appealing. The policy lets you sell excess energy you produce with your panels to your electric company for a credit to your bill for incoming energy. Montana does mandate net metering, but it doesn’t specify a rate at which your utility company has to buy the excess power. The rate will vary between companies, with some offering the retail rate and others offering well below it. If you only have access to a less appealing net metering program, adding a solar battery to your system will help you maintain low energy bills or eliminate them altogether.

How Much Sun Does Your Roof Receive?

Solar panels are only as efficient when they receive direct sunlight, which means homes that get more sunlight will naturally be a better fit for solar panels and will have a higher potential for energy savings. Montana as a whole receives 201 sunny days per year, which is about in line with the national average of 205 sunny days. From a sunlight availability perspective, Montana is a relatively good place to go solar. However, not all homes in MT will be ideal, so you’ll have to assess your specific property. The direction your roof faces makes a difference, as south- and west-facing roofs receive the most sun, by far. Additionally, shading on your property from trees or buildings can make solar less profitable for you overall, as it will reduce the amount of sun your panels receive.

What’s the Outlook on Solar in Montana?

Solar power is far less popular in Montana than in most states, but the prevalence of residential solar conversion is growing and is expected to do so in the future. Solar installations have steadily increased in numbers over the past decade, even after the state met its Renewable Portfolio Standard (RPS) goals. Although solar adoption has been slower in Montana than in many other states, this effectively means that the industry only has more room to grow than in most of the country. As solar becomes more prevalent, the price of the equipment is expected to drop even further, and various solar loans and incentives will likely become more accessible and plentiful.

Benefits of Solar Energy in Montana

Provided you determine that solar panels are a good fit for your Montana home, they provide numerous benefits that are difficult to pass up. We’ll discuss the upsides of going solar in Montana below.

Electricity Bill Savings

Most prospective solar customers know that the most significant financial benefit to going solar is the savings enjoyed on electric bills. Most home solar PV systems pay for themselves via the energy savings provided. In Montana, systems typically pay themselves off in around 13 years and provide the average homeowner an additional $15,189 in savings after that payoff period. Not to mention that solar panels effectively lock in a lower power rate for 25+ years, which is the expected system lifespan. Energy prices have historically gone up and will very likely continue to do so, which means your total savings could be even higher in the long run.

Lower Taxes & Access to Other Incentives

The federal and the state governments provide some incentives for homeowners to convert to solar, which provides you with some additional benefits.

One of the most significant solar incentives is the federal tax credit (ITC), which is a credit to your federal income tax liability for the year your panels are installed. The ITC is for 30% of your total system expense, which, in Montana, will be around $6,858.

The solar incentives available in Montana aren’t as plentiful as in other states and there is no state tax credit to reduce the price of solar panels. However, there are some benefits you can take advantage of. First, net metering is mandated for all utility companies in the state, which means you’ll have the opportunity to offset or even eliminate your electric bills. Additionally, Montana provides a Renewable Energy Systems Exemption, which is a property tax exemption that prevents your property taxes from increasing as a result of going solar.

Home Resale Value Increase

An enormous benefit that many solar customers overlook is the bump in home value when going solar. Installing solar panels will cause your property value to go up by around 4.1%, according to research completed by Zillow.3 In Montana, where the average home value is around $428,294, the typical homeowner will see added value in the amount of $17,560!4 The added value to your home could be even higher in more expensive areas, like Bozeman, Helena, Missoula and Big Sky. The property value increase that solar panels provide would normally cause your property taxes to increase as well. However, Montana provides a property tax exemption, which prevents any effect on your property taxes.

Clean, Renewable Energy

Many homeowners will choose to go solar for the environmental benefits, and there are plenty to speak of when it comes to solar conversion. By limiting your dependence on fossil fuels, you’ll be reducing your carbon footprint, contributing less to global warming and creating less air and water pollution. You’ll also be less reliant on traditional utility companies, meaning you’ll enjoy the benefits of energy independence as well.

What to Look Out For When Considering Solar in Montana

There are several things you’ll want to keep in mind as you decide if solar is right for your Montana home. We’ll discuss some important considerations you should make below to ensure the best experience possible.

Upfront Fees

close-up shot of dark solar panel details The upfront fees of your solar panel system will always be an important thing to consider as you decide if panels will fit into your budget. Despite the below-average price of solar equipment in Montana, the total system price can still be quite high. You can keep upfront expenditure down by choosing more affordable solar panels, limiting your equipment choices so as not to include expensive add-on products and finding a solar financing option with a low down payment or none at all.

Payback Period

As mentioned above, the time it takes your panels to pay for themselves is a very important consideration to make. Not only is this timeline a good metric for determining if solar is a good investment for your home, but it also helps you calculate your estimated total savings over the lifespan of your system. The average payback period in Montana is around 13 years, with a standard range of between 10 and 16 years. If your payback period is calculated higher than 16 years, you’ll still save money in most cases, but your return on investment will naturally be lower than average.

Net Metering Policies in Montana

Net metering is mandated in Montana, so all solar customers will have access to this policy. However, the rate at which you’re credited for excess energy is not set by the state, so the terms of the net metering policy will vary between utility companies. It’s best to check with your electricity provider before making any decisions. If your electric company has a less favorable buy-back rate, you might need to install a solar battery along with your panels to see a significant ROI.

Pending Policies & Changes to Incentives

The policies and incentives mentioned above are all subject to change in the future as the solar industry in Montana matures. Some incentives could be expiring soon, others might improve over time and there might be new incentives or rebate programs by the time you’re ready to commit to solar energy. While we don’t recommend waiting for more appealing incentives to come along, you should check for updates to policies and incentives before committing to solar.

Weather & Climate in Montana

Solar panels are most profitable near the equator, where the sun is most direct, intense and abundant. As such, many homeowners worry that the northern location of Montana means photovoltaic equipment won’t be worth it. There are quite a few cloudy days per year, which can leave solar panels with limited power production. However, the weather is quite conducive to solar conversion, with around the national average number of sunny days as well and an overall lack of extreme weather that can put solar panels at risk of damage. Many Montana residents worry about the snowfall in the area, as the state receives nearly double the national average amount of snow each year. Snow covering your panels will reduce efficiency, but it will also serve to keep the panels clean, which will maximize efficiency during the sunny days. The frigid winters are also a concern for some, but electricity flows more quickly in the cold, so your solar energy system can still provide good efficiency even in the winter months in Montana.

Companies Pushing Solar Leases or PPAs

Finally, you should be keenly aware that not all solar panel installation companies are equal, and you should take great care to choose one that has your best interests at heart. Specifically, you should stay away from companies advertising “free panels.” Panels are never free, and this is a marketing tactic to get you to sign a solar lease or power purchase agreement (PPA). These options are far less beneficial than financing because they provide fewer savings over time, they don’t let you take the federal solar tax credit and they don’t increase your property value.

Unfortunately, there are some companies in Montana that are only out for profit and try to use high-pressure sales tactics or even outright lie about incentives and savings to get customers to sign agreements. KULR 8 has reported on solar scams in MT and warned readers to opt for reputable, certified companies.5 Always be sure to work with a vetted solar company to avoid falling victim to scams like these.

Wrap Up: Is Solar Worth it in Montana?

Generally speaking, solar panels are a sound investment for most taxpayers in Montana; they typically provide substantial energy savings and make your home more eco-friendly in the process. However, solar isn’t ideal for all properties, so assessing your home for solar viability is crucial before you convert to clean energy. Some things you’ll want to consider include your estimated solar panel payback period, the direction your roof faces, shading from trees or buildings on your property, your estimated return on investment, and more. We strongly recommend connecting with a reliable solar panel installation company in your area to help you decide if your home is a good candidate for solar conversion.

See also: Find out how much solar power your roof can produce with our solar calculator

Read More About Going Solar

Frequently Asked Questions

The EcoWatch team is happy to get questions about the benefits of going solar in Montana and how to decide if it’s a good option. Below are some of the questions we see most often, along with our responses. If you have specific questions that aren’t answered here, reach out to our team of solar experts at solar@ecowatch.com.

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Dan Simms

Solar Expert

Dan Simms is an experienced writer with a passion for renewable energy. As a solar and EV advocate, much of his work has focused on the potential of solar power and deregulated energy, but he also writes on related topics, like real estate and economics. In his free time — when he's not checking his own home's solar production — he enjoys outdoor activities like hiking, mountain biking, skiing and rock climbing.