Minnesota solar rebates and tax credits calculator

Solar incentive

Federal ITC 26% (tax credit)

State tax credit: No

Net metering (by utility)

Calculate for your homes location

There can be solar tax credits and incentives available at the federal, state and local levels. The calculator above will show you the value of all incentives your home is eligible for.

Summary of Minnesota solar incentives 2020

Minnesota continues to develop solar friendly programs. Lawmakers recently adopted the IEEE solar interconnection standard, making it easier to connect your panels to the grid. Minnesota has also been a leader in implementing innovative community solar programs, and the state's largest utility company, Xcel Energy, also offers a great low-income solar program.

All told, the North Star State loves the sun, and going solar here can be a great financial decision, too! Read on to learn more about the ins and outs of solar in Minnesota.

On this page, you can:

  1. Learn what solar incentives are available to Minnesota homeowners

  2. See what Minnesota solar incentives you qualify for based on your utility company and city

  3. Find out how much these incentives and/or Minnesota solar tax credits will reduce your cost to go solar and add batteries

Federal solar investment tax credit

The federal solar investment tax credit will have the biggest impact on the cost you will face to go solar in Minnesota

This perk is commonly known as the ITC, short for “Investment Tax Credit”. If you install your photovoltaic system in 2020, the federal tax credit is 26% of the cost of your solar panel system. This is 26% off the entire cost of the system including equipment, labor and permitting.

Example: If your solar energy system costs $20,000, your federal solar tax credit would be $20,000 x 26% = $5,200.

The federal tax credit falls to 22% in 2021. Unless new legislation is introduced in Washington D.C., this program will be gone in 2022.

Net energy metering in Minnesota

With net metering in some states, you get full retail rate credit for the amount of electricity you send back into the grid with your solar panels.

Net Metering requires your utility to monitor how much energy your solar power system produces and how much energy you actually consume. If you run a surplus, you get credit for it.

Minnesota’s net metering law applies to all utilities, and requires them to provide net metering for all solar power systems less than 40 kW. The 40-kW limit should cover virtually all residential solar systems, which typically come in somewhere around 5-kW for a single-family home.

While commercial and industrial customers may not be able to take advantage of net metering, it’s a pretty sweet deal for your residential system. You get compensation for any surplus you generate at the “average retail utility energy rate.” Minnesota has a specific formula for determining what that is, but it basically amounts to the same as the retail rate you pay every month for electricity. Compensation may come as either actual payment (i.e. a check) or a credit on your future bills.

Minnesota solar rebates

Because Minnesota has such a strong RPS, there are a number of great utility rebates offered for solar. Most are paid as a simple calculation of dollars-per-kilowatt of generating capacity, but there's one that's different.

Minnesota Power offers a solar rebate program based on your first-year estimated production. The current incentive is $.83 per kilowatt-hour (kWh), and with an average 5-kW system pumping out about 6,200 kWh, you can expect around $5,150 back as a rebate. That's a great incentive, but they disappear fast, so get in touch with a solar expert near you today and get the ball rolling on that rebate!

Xcel's Solar*Rewards performance payments program

If you’re lucky enough to be an Xcel customer in Minnesota, you should definitely sign up for their Solar*Rewards Program. It pays you on an ongoing basis for the amount of kwh you produce with your solar panels.

You sign a contract to give your renewable energy certificates to Xcel for 20 years. They will pay you for the first 10 years at a rate of $.07/kwh, which is huge!

On an average sized 6kW system, you can expect to reap about $700 annually or $6,500 over those ten years.

Xcel's low-income solar program

Income-qualified Xcel customers who receive benefits under the Low-Income Heating Assistance Program (LIEAP) or Weatherization Assistance Program (WAP) can get a whopping $2,000 per kilowatt solar rebate from Xcel. If you make about $52,000 or less for a family of 4, you can qualify. The system must be sized to a maximum of 120% of your usage. For an average sized 6kW system, that amounts to $12,000!

Tax exemptions

A newly-installed solar power system is 100% exempt from associated property taxes. When a solar power system is installed, your home value rises significantly – twenty times estimated annual electricity savings. With the Minnesota property tax exemption in place, you’ll never pay any taxes on that home value jump.

The purchase of your solar power system in Minnesota is 100% exempt from sales tax. That saves you almost 7% up front.

Cost of solar panels in your part of Minnesota after all applicable solar incentives

Solar prices near you

Cost range of local prices

$19,865-$24,279

Payback period

10.4-12.7 years

Net profit (savings less system cost)

$33,842-$41,363

Average size system installed in MN in 2020

10.1kW

Solar panel cost calculator

Best 10 solar companies in Minnesota

21 solar companies in Minnesota provide pricing on SolarReviews. Here are the best rated companies near you.

Related solar news