Solar in Idaho: Cheap Power Makes Solar a Tough Sell

Idaho is one of the hardest states in the country to justify solar on pure economics. It is not because of the weather — southern Idaho gets decent sun, comparable to many Midwest states. The problem is that Idaho has some of the lowest electricity rates in America, thanks to abundant hydroelectric power from the Snake River and Columbia River systems.

When your electricity costs $0.08-$0.10/kWh, every kilowatt-hour your solar panels produce is worth about half of what it would save a homeowner in Connecticut, California, or Hawaii. The math is just harder.

Here is the honest picture for Idaho homeowners considering solar in 2026.

The Good News

Decent Solar Resource in Southern Idaho

Boise and southern Idaho average 4.5-5.2 peak sun hours per day — solidly above the national average. The high desert climate means clear skies for much of the year. If you live in the Boise, Twin Falls, or Idaho Falls area, your panels will produce well.

Northern Idaho (Coeur d'Alene, Moscow) gets less sun — closer to 3.8-4.3 peak sun hours — and is a tougher proposition for solar.

Net Metering (Under Pressure)

Idaho currently requires investor-owned utilities to offer net metering for systems up to 100 kW. Idaho Power, the state's largest utility, credits excess generation at a rate that has historically been close to retail, though the utility has pushed to reduce this.

In recent years, Idaho Power has proposed changes to net metering that would reduce the export credit rate. As of 2026, the net metering structure is still intact, but this is a state where the utility has been actively hostile to residential solar. Check current rates before making assumptions.

Property Tax Exemption

Idaho exempts the added value of solar energy systems from property taxes for the first four years after installation. After four years, the exemption expires and the added value may be taxed. This is less generous than states with permanent exemptions, but it helps during the early payback period.

Growing Installer Market

Idaho's solar market has grown steadily, and several regional installers now serve the Boise metro area with competitive pricing. Per-watt costs have dropped to $2.80-$3.30, roughly in line with national averages.

The Challenges

Extremely Low Electricity Rates

This is the fundamental problem. Idaho Power's average residential rate is approximately $0.09-$0.11/kWh — among the lowest in the nation. Cheap hydroelectric power is great for your current bill but terrible for solar payback calculations.

When you save $0.10 per kWh instead of $0.16 or $0.25, a $22,000 solar system takes significantly longer to pay for itself. This single factor makes Idaho solar economics roughly 40-60% worse than states with average or high electricity rates.

No State Tax Credit or Rebate

Idaho offers no state income tax credit for solar installations. There is no state rebate program. No SREC market. With the federal ITC expired, you have zero upfront incentives. The full system cost comes out of your pocket.

Winter Production Drop

Idaho winters are long and can be snowy. December and January production drops significantly — sometimes to 30-40% of summer output. Snow coverage on panels reduces production further, though panels typically shed snow faster than the surrounding roof due to their smooth surface and dark color.

Annual production estimates account for this seasonal variation, but be aware that your winter electricity bills will not be offset nearly as much as summer bills.

The Idaho Solar Math (2026)

Typical 7kW system:

• Installed cost: $21,700 ($3.10/watt)
• Federal ITC: $0 (expired January 1, 2026)
• State credits: $0
• Net cost: ~$21,700

Annual production: ~10,200 kWh (Boise area)

Idaho Power retail rate: $0.10/kWh

Net metering credit: ~$0.08-$0.10/kWh

Annual savings: $900-$1,020

Payback period: 21-24 years (at flat rates), 16-19 years (with 4% annual rate increases)

25-year savings: $5,000-$15,000

Those numbers are rough. A 20+ year payback at flat rates means you are essentially betting on electricity rate increases to make solar work. If Idaho Power rates climb to $0.14-$0.16/kWh over the next decade — which is possible as hydro resources face climate and regulatory pressure — the math improves considerably. But that is a bet, not a guarantee.

With margins this thin, getting the lowest possible installation price matters more in Idaho than almost any other state. Comparing multiple installer quotes can shave $2,000-$4,000 off your total cost.

When Solar Makes Sense in Idaho

Install if:

• You live in southern Idaho with strong solar access (Boise, Twin Falls, Pocatello)
• Your Idaho Power bill is over $150/month (indicating above-average usage)
• You plan to stay in your home 20+ years
• You are motivated by energy independence or environmental values, not just payback period
• You believe electricity rates will rise significantly over the next decade
• You can pair solar with an EV to increase self-consumption

Wait or skip if:

• Your electricity bill is under $100/month (the savings are just too small)
• You live in northern Idaho with limited sun exposure
• You want a payback period under 15 years
• You plan to move within 10 years
• You are on a tight budget and cannot absorb a 20+ year payback

Key Takeaways

• Idaho's cheap hydroelectric power is the main obstacle — low rates mean low savings per kWh
• No federal or state tax credit is available in 2026
• Net metering exists but is under pressure from Idaho Power — check current terms before signing
• Southern Idaho gets good sun (4.5-5.2 peak hours) but northern Idaho is marginal
• Typical payback is 16-24 years depending on rate assumptions — among the longest in the nation
• Property tax exemption lasts only 4 years — less generous than most states
• Idaho is an honest below-average state for solar economics — the math works better as a long-term hedge than a near-term investment

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