What the Idaho deduction actually is
Idaho allows a homeowner to deduct the cost of a residential solar installation from state taxable income across four years: 40 percent of the system cost in year one, then 20 percent in each of the following three years.
It is capped at $5,000 per year and $20,000 in total, and is claimed on Idaho Form 39R in the Subtractions section, which is where deductions live rather than credits.
On a $22,000 system, 40 percent is $8,800, but the annual cap limits the year one deduction to $5,000. Across four years the deduction total is bounded by both the percentages and the $20,000 ceiling.
The value you actually receive is that deducted amount multiplied by your marginal Idaho income tax rate, not the deducted amount itself. That is a fraction of the headline figure.
Working out what it is worth to you
Take the amount you would deduct in a given year, apply your marginal Idaho income tax rate, and that is the cash the deduction returns for that year.
That is a different and smaller number than the deduction itself, and it depends on your own tax position rather than being the same for everyone.
So this is a question for a tax professional rather than for an installer. Ask your installer for the system cost and the schedule; ask a tax professional what the deduction is worth in your circumstances.
Ask directly whether the quote treats it as a credit or a deduction. If a projection subtracts 40 percent of the system cost from the price, it is describing a credit that does not exist.
And what replaced the federal credit, which is nothing
The 30 percent federal Residential Clean Energy Credit under Section 25D expired for property placed in service after December 31, 2025. A cash or loan purchase now receives no federal tax credit.
The Idaho deduction is not a replacement for it in any meaningful sense. A 30 percent credit and a capped deduction worth a marginal rate multiple are different orders of magnitude.
Section 48E survives at 30 percent for third-party owners under leases and power purchase agreements. But under a lease you generally do not own the system, which affects whether you can claim the Idaho deduction at all.
Ask that question explicitly before choosing a structure, and confirm the tax treatment with a tax advisor rather than with the salesperson.
Rebuilding the estimate from what is confirmed
Strike the federal residential credit from any quote showing it, since Section 25D expired for property placed in service after December 31, 2025.
Restate the Idaho incentive as a deduction with the four-year schedule and the $5,000 annual and $20,000 total caps, and value it at your marginal rate rather than at face.
Add net billing under the Idaho Power arrangement: retail-rate offsetting for what you consume on site, and a season and time-varying export credit for the rest.
Ask for that version in writing, with the deduction valued correctly and the export credit shown by season rather than as an annual average.