*Solar panel cost varies by location, solar panel mqanufacturer, system size and the amount of electricity your home uses.
There are three ways you can reduce your Xcel Energy bill: changing your habits, switching your rate plan, and adding solar panels.
You've probably heard a lot about reducing energy consumption by doing things like switching to LED lightbulbs and adding insulation to your walls, but these fixes are relatively easy compared to the far more impactful step of making changes to your lifestyle.
The second thing you can do is switch your rate plan. Xcel Energy offers time-of-use billing that can help you save money by shifting your usage of energy-intensive appliances to off-peak hours, and there may be other options for you as well.
Finally, you can reduce or even eliminate your electricity bill by installing solar panels on your home.
For some people, the savings from switching rate plans may only be a few dollars per month, but for many it can be $20-$100 per month. That's between $240 and $1,200 that you may now be paying to Xcel Energy Minnesota each year for no reason.
Finding out what's available to you is as simple as a phone call or email to Xcel Energy Minnesota. Even a small savings can be worth it.
Yes! With Xcel’s Solar Rewards program, available low income rebate, and sales and property tax exemptions, home solar panels make a lot of sense for Xcel customers in Minnesota. Xcel’s net metering rate also allows you to get full credit on your power bill for the excess solar electricity your panels produce which you can’t use onsite. Your credits accrue at the same rate as retail rates, and roll over to your next monthly bill.
Yes, Xcel Energy Minnesota offers 1 for 1 net metering. This means you are paid the same rate for excess solar energy that you export to the utility grid during the middle of the day as what you pay for power purchased from the grid.
In the case of Xcel Energy Minnesota, Time of Use (TOU) pricing applies. You will earn an average of $0.22 for power exported at peak rate times, and an average of $0.04 for power exported at off-peak times.
In addition to net metering, Xcel offers its Minnesota customers a program called Solar*Rewards, which pays a small additional amount for every kWh of solar energy your panels generate. The current payment is $.07/kWh for systems up to 40 kW in size, which can save the average Minnesota solar owner an extra $700 per year.
The major financial incentive currently available until the end of 2023 is the 30% federal solar tax credit. The way this works is that the full cost of the system needs to be paid to the installer, and this tax credit can then be claimed back as cash when you next do your taxes.
Many states, local governments and utilities also offer incentives for homeowners who go solar. This help can take the form of state tax credits, rebates, tax breaks, SRECs or even performance-based incentives. The best part is that all of these incentives apply in addition to the federal credit.
Here is every incentive you may be eligible for as a Xcel Energy customer:
Upfront Incentives | Value* |
---|---|
Residential Clean Energy Tax Credit (Federal) | -$7,121 |
Net Metering
(State)
Utilities must offer net metering and compensate at the average retail utility energy rate. |
Varies |
Wind and Solar-Electric (PV) Systems Property Tax Exemption
(State)
Solar property is exempt from property tax assessment. |
Varies |
Solar Energy Sales Tax Exemption
(State)
The purchase of PV generation equipment is exempt from sales tax |
Varies |
TOTAL | -$7,121 |
*Based on 10.18 kW system, average installation cost $23,735
If you input the details for a Xcel Energy customer with a power bill of $200 per month into the best online solar panels calculator, it tells you that you need a 10.18 kW solar system that will produce 14,226 kWh per year and that this system will return the owner a $52,454 profit after repaying the cost of the system.
The solar savings possible for you as a Xcel Energy customer will depend on the amount of electricity you use and the cost of the solar system you buy. Savings also vary based on the direction of your roof or any shading of your roof that affects output.
Here is a monthly and lifetime solar savings estimate for the same relatively typical Xcel Energy customer with a $200 per month electric bill prior to solar and who installs a 10.18 kW solar system.
System Size (for 100% usage offset) 10.18 kW |
Annual Power Generation 14,226 kWh |
Pay-back time (assuming Cash purchase) 6.3 Years |
Internal Rate of Return (IRR) on Investment 13.4% |
Gross cost $23,735 |
Total Upfront Incentives and Rebates -$11,668 |
Net Cost of System after rebates and incentives $12,069 |
Total Cost of Utility Power Avoided over 25 years $64,523 |
Please note that the investment return figures do not include the possible increase in property value.
While most homeowners decide to install solar panels because of financial savings over time, the environmental impacts of this choice are the primary motive for others. Here is a breakdown of the environmental benefits from a Xcel Energy Minnesota customer installing a 10.18 kW solar system on their property:
A solar system generating 14,226 kWh per year will save you money AND make the world a nicer placeSaves you
on average per year
Reduces CO2 emissions
tons per year
Equivalent to planting
per year
Equivalent to driving
less per year
CO2 emissions calculation based on the electricity generation and emissions data for your state in 2015 as published by the US Government Energy Information Administration.
The cost of installing solar panels will vary with brands of solar panels and inverters you choose and also the installation company you choose to install them.
It is common to see really good systems, using quality brands of equipment, being sold for around $2.33 per watt or $12,069 for a standard 10.18 kW solar system after the customer claims the 30% federal solar tax credit.