Investing in Solar

Curious to know what an investment in solar looks like?

Customers invest in solar for a variety of reasons, and it is important to know how solar may meet your goals.

Many factors affect payback, including the cost per watt of the system, its energy production, the export credit value, and your tax credit eligibility. A system’s energy production depends on the technology used, how the system is configured, and environmental factors.

Additionally, Idaho Power’s rules and pricing structures are not contracts and are subject to change at any time with approval from the IPUC. Modifications to the compensation structure could result in changes to how excess energy sent back to the grid by the customer is measured and credited and the value of that credit. Those changes could impact any savings realized from a rooftop solar system and potential payback on the investment.

What might solar look like for a typical home?

The example below shows a customer who uses an average amount of energy per year and installs a standard system with a life of 30 years. This customer would see a simple payback period of 14-18 years under the current net billing structure. If the system is financed, the simple payback period extends further. If the investment is evaluated using a discounted payback method, which is more accurate for evaluating the financial value of a project, it may not pay back over the life of the system regardless of whether it is financed or paid for in cash.

Example for using solar on-site generation to match about 75% of a home’s energy use under current and proposed future compensation structures.

illustration of a medium sized house


Average Monthly Energy Use: 1,000 kWh

Average Monthly Bill: $122 on the standard residential rate

Solar System Size: 6 kW

Average System Life: 30 years


Measurement Interval Net Billing Net Billing Time of Use 
Excess Energy Credit Value 4.8¢ off-peak
16.9¢ on-peak
4.8¢ off-peak
16.9¢ on-peak 
Estimated Break-Even Point
(Simple Payback) if Paying in Cash
14 to 18 years 17 to 21 years
Estimated Break-Even Point
(Discounted Payback) if Paying in Cash
23 to 27 years Financial loss. Does not pay back within 30 years.
Estimated Break-Even Point
(Simple Payback) if Financing with 20-year Loan
25 to 29 years Financial loss. Does not pay back within 30 years.
Estimated Break-Even Point
(Discounted Payback) if Financing with 20-year Loan
Financial loss. Does not pay back within 30 years. Financial loss. Does not pay back within 30 years.

The estimates and assumptions used in the payback scenarios are generalizations. Your actual payback will differ based on your energy needs, solar system size and cost, loan interest rate, tax credit eligibility, and any changes to Idaho Power’s compensation structure. You can view your monthly and annual energy needs on Idaho Power’s My Account. For a personalized estimate of solar, Idaho Power recommends researching professional installers and getting multiple bids.

The payback scenarios shown above used the following inputs:

  • Home’s energy use: 12,000 kWh per year (~1,000 kWh per month) with energy use highest in winter and summer for heating and cooling.
  • Solar PV System Size: 6 kWDC solar array (a common size for Idaho Power customers) in Boise. Production based on representative residential customer generation customer bills and compared to estimates from National Renewable Energy Laboratory’s (NREL) PV Watts Calculator, using the calculator’s default settings.
  • System cost: $3.00 to $4.00 per watt based NREL S. Solar Photovoltaic System and Energy Storage Cost Benchmarks, With Minimum Sustainable Price Analysis: Q1 2022 ( The cost for the example 6 kW solar system is $19,500 before tax credits and deductions.
  • Tax credits: 30% federal tax credit and full Idaho state tax deduction.
  • Energy costs: Idaho Power’s pricing for Schedule 1 (residential service) with seasonal tiered rates from approximately 8.9 to 14.4¢/kWh, and average kWh cost of approximately 10¢.
  • Utility bill increases: 1.81% per year based on historical data in Idaho Power’s Integrated Resource Plan (IRP).
  • Loan details: 20-year loan at 6.6% interest rate. Source: Google project sunroof. Credit realized first year.
  • Discount rate (required rate of return): 4.2%. This input should be based on one’s personal needs. When deciding your required rate of return, at a minimum, consider inflation and your loan interest rate to make sure you break even. Decide what is the best use of your money right now by comparing the expected returns from different investment options, like stocks, bonds, other purchases or simply saving for your future.
  • Excess Energy Credit Value: Time differentiated credit rate of approximately 4.8 to 16.9¢/kWh for excess energy delivered to grid.
  • Time of Use rate: Payback under a Time of Use rate may be improved by shifting energy use to off-peak times.

Want to explore further? Use our online solar calculator to start your estimate.

Start Your Estimate

If you are considering an investment in solar or solar + storage, use our online Solar Calculator to understand the savings potential based on your rooftop characteristics, energy usage, available tax credits and rebates, and current utility export credit rates. Then, compare options to make an informed decision about investing in solar.

Please note: You will be redirected to a third-party site. Your information will not be stored or sold. You can view and download your report.

If you’d like to learn more about what an investment in solar would look like at your home, read our online FAQs, call us at 1-800-632-6605 or email

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