Alternative Energy Investment Tax Credit

July 18, 2021


Commercial and net metering alternative energy investments of $5,000 or more are eligible for a tax credit of up to 35% against individual or corporate tax on income generated by the investment. The investment must be depreciable. The credit is applied only against taxes due as a consequence of taxable or net income produced by:

  • A manufacturing plant that is located in Montana and that produces alternative energy generating equipment;
  • A new business facility or the expanded portion of an existing business facility that supplies basic energy needed from the alternative energy generating equipment, on a direct contract sales basis; or
  • The alternative energy generating equipment itself.

This credit is available to taxpayers purchasing an existing facility as well as to those building a new facility. While net metered systems are eligible, the tax credit is only for any income generated by the system.

The tax credit must be taken the year the equipment is placed in service; however, any portion of the tax credit that exceeds the amount of tax to be paid may be carried over and applied against state tax liability for the following 7 years. If a project sized 5 megawatts (MW) or larger is installed on a tribal reservation in Montana, a credit may be extended through the 15th tax year succeeding the tax year of installation, provided that the installation meets other specified criteria.

Taxpayers may not take this credit in conjunction with any other state energy or state investment tax benefits, or with the property tax exemption for non-fossil energy property.

Program Overview

Implementing Sector: State
Category: Financial Incentive
State: Montana
Incentive Type: Industry Recruitment/Support
Web Site:
Administrator: Montana Department of Revenue
Start Date: 1/1/2002
Eligible Renewable/Other Technologies:
  • Geothermal Electric
  • Solar Thermal Electric
  • Solar Photovoltaics
  • Wind (All)
  • Biomass
  • Landfill Gas
  • Wind (Small)
  • Hydroelectric (Small)
  • Fuel Cells using Renewable Fuels
Incentive Amount: 35% tax credit
Maximum Incentive: Not specified.
Terms: Participant investment must be greater than or equal to $5,000. Unused credit may be carried forward 7 years. See below for criteria to qualify for a 15-year carryover.


This program has 1 incentives
Technologies: Geothermal Electric, Solar Thermal Electric, Solar Photovoltaics, Wind (All), Biomass, Landfill Gas, Renewable Energy, Wind (Small), Hydroelectric (Small), Fuel Cells using Renewable Fuels
Sectors: Commercial, Industrial
Parameters: The incentive is 35.00 %


Name: MCA § 15-32-401 et seq.
Date Enacted: 5/5/2001
Effective Date: 1/1/2002
Expiration Date: None
Name: ARM 42.4 Subchapter 41


Name: Information Specialist - MT Dept. of Rev.
Organization: Montana Department of Revenue
Address: P.O. Box 8018
Helena MT 59604-5805
Phone: (406) 444-6900
Name: Chris Dorrington
Organization: Montana Department of Environmental Quality
Address: 1520 East Sixth Ave
Helena MT 59620-0901
Phone: (406) 444-2544

This information is sourced from DSIRE; the most comprehensive source of information on incentives and policies that support renewables and energy efficiency in the United States. Established in 1995, DSIRE is operated by the N.C. Clean Energy Technology Center at N.C. State University.