Is Solar Worth It in Montana in 2026?
Montana is a paradox for solar: strong, clear high-altitude sun (Billings sits at 46.9°N, but thin, dry air and roughly 189 sunny days a year push production higher than the latitude alone suggests) paired with some of the cheaper electricity in the country. Cheap power is good for your wallet and bad for your solar payback math — every kWh a panel makes is worth less here than in a state paying 20 or 30 cents. That tension is the honest starting point for this page.
2026 also changed the federal picture. The 30 percent tax credit that used to make Montana solar pencil out faster ended for systems completed after December 31, 2025. What's left is a state property tax exemption, full-retail net metering with a distinctly Montana twist, and genuinely good production numbers. Solar can still work here — especially for a high-usage home with a good south-facing roof — but it's a longer-horizon bet than it would have been a year ago. This page gives you Montana's real numbers so you can run your own math instead of trusting a slide deck.
Montana Electricity Prices Over Time
Solar is a wager on where electricity prices go next, because every kilowatt-hour your roof makes is one you don't buy from NorthWestern Energy or your co-op. Here's the long view, from federal EIA data.
Full Montana electricity price data (1990–2025)
| Year | Montana (¢/kWh) | US avg (¢/kWh) |
|---|---|---|
| 1990 | 5.5 | 7.8 |
| 1991 | 5.8 | 8.0 |
| 1992 | 5.8 | 8.2 |
| 1993 | 5.8 | 8.3 |
| 1994 | 6.0 | 8.4 |
| 1995 | 6.1 | 8.4 |
| 1996 | 6.2 | 8.4 |
| 1997 | 6.4 | 8.4 |
| 1998 | 6.5 | 8.3 |
| 1999 | 6.8 | 8.2 |
| 2000 | 6.5 | 8.2 |
| 2001 | 6.9 | 8.6 |
| 2002 | 7.2 | 8.4 |
| 2003 | 7.6 | 8.7 |
| 2004 | 7.9 | 9.0 |
| 2005 | 8.1 | 9.5 |
| 2006 | 8.3 | 10.4 |
| 2007 | 8.8 | 10.7 |
| 2008 | 9.1 | 11.3 |
| 2009 | 8.9 | 11.5 |
| 2010 | 9.2 | 11.5 |
| 2011 | 9.8 | 11.7 |
| 2012 | 10.1 | 11.9 |
| 2013 | 10.3 | 12.1 |
| 2014 | 10.2 | 12.5 |
| 2015 | 10.9 | 12.7 |
| 2016 | 10.9 | 12.6 |
| 2017 | 11.0 | 12.9 |
| 2018 | 11.0 | 12.9 |
| 2019 | 11.1 | 13.0 |
| 2020 | 11.2 | 13.2 |
| 2021 | 11.2 | 13.7 |
| 2022 | 11.3 | 15.0 |
| 2023 | 12.5 | 16.0 |
| 2024 | 12.7 | 16.5 |
| 2025 * | 13.0 | 17.3 |
Source: US EIA, average residential retail electricity price. Values in cents per kWh. * 2025 is preliminary.
Montana residential electricity ran about 13 cents per kWh in 2025 (EIA preliminary figures) — up roughly 60 percent since 2005, a climb that has averaged about 1.8 percent a year over the last decade. That's real money over 20 years, but it's also a much gentler slope than states running on expensive natural gas peaker plants or hurricane-battered grids. Montana's rate growth is steady, not explosive, which is part of why payback here takes longer than the national picture you'll see in solar marketing.
The Montana Sun, Month by Month
Panels respond to the sun's angle and the length of the day, not to how cold it is outside — which is good news, because cold panels are actually slightly more efficient than hot ones. At 46.9°N, Montana's winter sun sits low and the days are short, but its summer days run long and the air is thin and dry, which cuts down on the haze that steals production in hazier climates.
Montana monthly solar production data
| Month | kWh per installed kW |
|---|---|
| Jan | 75 |
| Feb | 86 |
| Mar | 117 |
| Apr | 124 |
| May | 129 |
| Jun | 134 |
| Jul | 145 |
| Aug | 142 |
| Sep | 125 |
| Oct | 103 |
| Nov | 84 |
| Dec | 66 |
| Year | 1329 |
Source: NREL PVWatts typical-year estimate (Billings), per installed kW at latitude tilt.
The practical read: Billings-area systems produce around 1,329 kWh per installed kilowatt per year, a solid number nationally even though Montana sits well north of the Sun Belt. May through August carry most of the year's production, while December and January are thin. That seasonal swing matters more here than in most states, because it runs straight into the Settle-Up rule below — big summer surplus that isn't used by your specific settle-up date doesn't roll forward indefinitely.
What Solar Costs in Montana in 2026
Most residential installs in Montana run about $2.60 to $2.90 per watt as of 2026. Labor, permitting, and a licensed installer's overhead make up more of that number than the panels themselves. With the federal credit gone, the price you negotiate is close to the price you pay — there's no 30 percent to subtract afterward.
| System Size | Typical 2026 Cost | Roughly Offsets | Fits |
|---|---|---|---|
| 5 kW | $13,000 to $14,500 | ~6,645 kWh/yr (~$72/mo at 13¢) | Smaller home, lower usage |
| 8 kW | $20,800 to $23,200 | ~10,632 kWh/yr (~$115/mo) | Average Montana home |
| 12 kW | $31,200 to $34,800 | ~15,948 kWh/yr (~$173/mo) | Large home, electric heat |
Montana has no state sales tax, so there's no equipment tax on top of these figures — and no exemption to claim, since there was never a tax to exempt. Get at least three quotes and compare price per watt, equipment, and workmanship warranty; installed cost varies with roof pitch, access, and distance from the installer's home base.
Estimate Your Montana Payback
The calculator below starts from Montana's average electricity rate and Billings-area production. Enter your own monthly bill to see an estimated system size, payback period, and 25-year savings. Montana rates have grown about 1.8 percent a year over the last decade — a reasonable default for the inflation field, though you can drag it up or down to see how sensitive your payback is to future rate hikes.
Montana Solar Incentives That Still Exist in 2026
Here's what's gone and what's real going into 2026.
- Gone — the 30 percent federal credit: The federal Residential Clean Energy Credit ended for installations completed after December 31, 2025, with no phase-out. If a quote still nets out 30 percent, that installer hasn't updated its paperwork.
- Still here — the property tax exemption: Under MCA 15-6-224, the added assessed value from a qualifying solar system is exempt from property tax for 10 years, capped at $20,000 of assessed value. It isn't automatic — you file Form AB-14 with the Montana Department of Revenue to claim it. See how assessments otherwise work in our property taxes and home finances guide.
- No state income tax credit: Montana repealed its old residential alternative-energy tax credit years ago — don't confuse that with the separate, also-dead federal 25D credit.
- A loan, not a rebate: The state's Alternative Energy Revolving Loan Program (AERLP), run by Montana DEQ, offers low-interest loans for solar and efficiency upgrades. It lowers financing cost, but it isn't free money.
- Partially — leases and PPAs: Third-party-owned systems can still capture a separate federal business credit through 2027, but it belongs to the leasing company. It may show up as a lower lease payment, or it may not. Compare any lease against a cash or loan purchase before assuming it's the better deal.
A few rural co-ops run narrow rebates outside typical rooftop solar — Yellowstone Valley Electric Cooperative, for instance, rebates solar livestock-watering setups, not home arrays. Ask your utility or co-op what, if anything, applies to your address.
Net Metering and the Annual Settle-Up
Montana law (MCA 69-8-601 et seq., implemented through NorthWestern Energy's Rule 16 and the equivalent at Montana-Dakota Utilities) requires full-retail-rate net metering statewide for systems up to 50 kW — comfortably above what a typical home installs. Extra power your panels send to the grid banks as a kWh credit at the same rate you'd pay to buy it, and that credit rolls over month to month.
The distinctly Montana part is the annual Settle-Up: once a year, on the anniversary of your interconnection (not a fixed calendar date), any kWh credit still on your account is zeroed out — no cash-out, nothing carried forward. This policy has been tested and held: in November 2019, the Montana Public Service Commission unanimously rejected a NorthWestern Energy proposal to end net metering, add a monthly demand charge, and move solar customers to an export rate roughly 44 percent below retail. The PSC instead ruled that full-retail net metering stays in place until rooftop solar reaches 5 percent of NorthWestern's peak load — as of the most recent figures, it was still around 1 percent, so no trigger is imminent. No new docket has overturned that ruling as of mid-2026. Aggregate or community net metering isn't allowed on NorthWestern or Montana-Dakota Utilities service.
Sizing for Montana, Not for a National Rule of Thumb
Most solar sizing advice assumes you either get paid for excess export or keep the credit forever. Neither is quite true in Montana. Because your Settle-Up date forfeits whatever's left on the books, the smart approach is to size a system close to your actual trailing-year usage — enough to meaningfully cut your bill, not so much that you're producing a summer surplus you'll never get value from. A bigger array also pushes more current through your service panel, and older Montana farmhouses often still run 100-amp service that wasn't built with solar or an EV charger in mind — have your installer check panel capacity before finalizing a size. Our electrical guide covers how to tell if a panel needs upgrading.
How to Go Solar in Montana
Work through these steps in order before you sign anything.
- Pull your last 12 power bills and total your annual kWh usage — this, not roof size, should drive system sizing in a Settle-Up state.
- Confirm your roof faces south, east, or west with minimal shading, and has at least 10 to 15 years of life left before a reroof.
- Have your installer check your electrical panel's capacity, since older Montana homes may need a service upgrade before adding solar.
- Ask each installer for your specific Settle-Up (interconnection anniversary) date and how they've sized the system around it.
- Get at least three quotes and compare price per watt, equipment, and warranty — and confirm none assume a federal credit that no longer exists.
- Confirm current net metering terms with NorthWestern Energy, Montana-Dakota Utilities, or your co-op.
- File Form AB-14 with the Montana Department of Revenue after installation to claim your property tax exemption — it is not automatic.
For the fundamentals of how panels, inverters, and financing options work, read our main solar panels guide. It covers the technology and the buy-versus-lease decision in depth; this page focuses on what's specific to Montana.
Sources
Figures on this page are 2026-current. Rates: US EIA, Electric Sales, Revenue, and Average Price (2025 values preliminary). Federal credit repeal: IRS — Residential Clean Energy Credit. Net metering and the 2019 PSC ruling: Utility Dive, Vote Solar, and NorthWestern Energy Rule 16. Settle-Up mechanics: NorthWestern Energy. Property tax exemption: MCA 15-6-224 and the Form AB-14 application. Production estimates: NREL PVWatts. We review these figures every six months.