Alternative Energy Investment Tax Credit (Personal)

October 27, 2016


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.

A "net metering system" means a facility for the production of electrical energy that:
(a) uses solar, wind, or hydropower for fuel;
(b) has a generating capacity of 50 kilowatts or less;
(c) is located on the customer-generator's premises;
(d) operates in parallel with the utility's distribution facilities; and
(e) is intended primarily to offset part or all of the customer-generator's requirements for electricity.

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 an Indian 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: Personal Tax Credit
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%; participant investment must be greater than or equal to $5,000.
Maximum Incentive: Not specified.
Eligible System Size: Not specified.
Equipment Requirements: System must be new and in compliance with all applicable performance and safety standards.
Carryover Provisions: Unused credit may be carried over for 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, 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: 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: Kathi Montgomery
Address: 1520 East Sixth Ave.
Helena MT 59620
Phone: (406) 444-6586

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.