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:
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Learn what solar incentives are available to Minnesota homeowners
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See what Minnesota solar incentives you qualify for based on your utility company and city
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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
Showing data for:
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Prices based on a 10.1kW system, after 26% federal tax credit
Solar prices near you
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.
4.87 279 Reviews
Latest review
Brad Johnson, 1 week ago
AllEnergy Solar of St. Paul, MN had installed a grid-tied solar system on a friend's barn several years ago, and she has raved about it since. When my budget finally allowed, I contacted them to get my own system. AllEnergy did a site survey, looked at a years worth of my electric usage and designed a system to keep my house powered when the grid is down; grid-tied with batteries. I wanted to use a newer kind of batteries - LiFePo4 or LFP for short- which use lithium ferrous phosphate instead of the lithium-ion chemistry. AllEnergy has used Enphase microinverters for a long time, and the company has a great track record for reliability and customer support. I learned that they had developed an entire home energy management system, the Ensemble, which includes LFP storage, so I asked the powers-that-be at AllEnergy to install one on my home. Despite the newness of the system and the fact that they had never installed one before, they agreed. The system is so brand new that getting all the pieces in place to do the install took a while, but in September, the install got done. On the morning of the first day, the equipment arrived for digging the postholes for the ground-mounted solar array and trenching the cable ways from the array to the house. The install team arrived and quickly set to work, operating like a well-oiled machine. They were Luke Everson, lead, with Darion Evasku and Sam Newport as the install team and John McCarthy was the electrician. Despite having to overcome several distinct challenges involving my home's electrical system, the whole operation was done in three days, with an additional couple of visits to provision and update the system once it was up and running. Throughout the process, I was continually impressed with the professionalism and thoroughness of each member of the team. They treated me and my home with utmost respect, observing all the extraordinary safety measures we have come to consider essential these days. When they finished, I had the extreme delight of watching my electric meter spin merrily backwards as the sun lit up my array. From the beginning, AllEnergy has been great! They planned the system, filed building permit applications, connected me with lenders who specialize in solar energy loans, submitted applications for the state incentives and rebates, coordinated with the local utility and basically brought the whole thing together in one seamless operation. My project manager, Nick Judkins, was always available to answer questions and respond to my concerns. AllEnergy solar really is a "one-stop" provider, and I know that I would never have been able to bring my dream of solar power to reality without their help. I'd like to give a special recognition to Brian Allen, one of the founders of AllEnergy Solar, for agreeing to let me be the first of the Ensemble systems his company installed. He embraced my request with "can do" and then made it happen! I strongly recommend AllEnergy Solar!
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Latest review
Brad Johnson, 1 week ago
AllEnergy Solar of St. Paul, MN had installed a grid-tied solar system on a friend's barn several years ago, and she has raved about it since. When my budget finally allowed, I contacted them to get my own system. AllEnergy did a site survey, looked at a years worth of my electric usage and designed a system to keep my house powered when the grid is down; grid-tied with batteries. I wanted to use a newer kind of batteries - LiFePo4 or LFP for short- which use lithium ferrous phosphate instead of the lithium-ion chemistry. AllEnergy has used Enphase microinverters for a long time, and the company has a great track record for reliability and customer support. I learned that they had developed an entire home energy management system, the Ensemble, which includes LFP storage, so I asked the powers-that-be at AllEnergy to install one on my home. Despite the newness of the system and the fact that they had never installed one before, they agreed. The system is so brand new that getting all the pieces in place to do the install took a while, but in September, the install got done. On the morning of the first day, the equipment arrived for digging the postholes for the ground-mounted solar array and trenching the cable ways from the array to the house. The install team arrived and quickly set to work, operating like a well-oiled machine. They were Luke Everson, lead, with Darion Evasku and Sam Newport as the install team and John McCarthy was the electrician. Despite having to overcome several distinct challenges involving my home's electrical system, the whole operation was done in three days, with an additional couple of visits to provision and update the system once it was up and running. Throughout the process, I was continually impressed with the professionalism and thoroughness of each member of the team. They treated me and my home with utmost respect, observing all the extraordinary safety measures we have come to consider essential these days. When they finished, I had the extreme delight of watching my electric meter spin merrily backwards as the sun lit up my array. From the beginning, AllEnergy has been great! They planned the system, filed building permit applications, connected me with lenders who specialize in solar energy loans, submitted applications for the state incentives and rebates, coordinated with the local utility and basically brought the whole thing together in one seamless operation. My project manager, Nick Judkins, was always available to answer questions and respond to my concerns. AllEnergy solar really is a "one-stop" provider, and I know that I would never have been able to bring my dream of solar power to reality without their help. I'd like to give a special recognition to Brian Allen, one of the founders of AllEnergy Solar, for agreeing to let me be the first of the Ensemble systems his company installed. He embraced my request with "can do" and then made it happen! I strongly recommend AllEnergy Solar!
4.75 110 Reviews
Latest review
Sree, 1 week ago
I started looking into solar energy in April 2020. In May I finally selected Sun Badger Solar; I like their professionalism and how easy it was to work with them. Pricing was reasonable too. It did take a long time to go from there to the installation on Oct 29th. I give them a pass on this, as these COVID19 times makes everything challenging. After installation, the inspections and the work by WE Energies to install the new meter took place very quickly, and I was up and running on Nov 11th. I did not have to worry about paperwork, approvals or dealing with various government agencies. Sun Badger Solar took care of all that - I just had to sign some papers (we did all that online). All in all, I'm very happy with the work.
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Latest review
Sree, 1 week ago
I started looking into solar energy in April 2020. In May I finally selected Sun Badger Solar; I like their professionalism and how easy it was to work with them. Pricing was reasonable too. It did take a long time to go from there to the installation on Oct 29th. I give them a pass on this, as these COVID19 times makes everything challenging. After installation, the inspections and the work by WE Energies to install the new meter took place very quickly, and I was up and running on Nov 11th. I did not have to worry about paperwork, approvals or dealing with various government agencies. Sun Badger Solar took care of all that - I just had to sign some papers (we did all that online). All in all, I'm very happy with the work.
4.74 35 Reviews
Latest review
DevinM, 3 weeks ago
Purchasing a house in the summer with solar panels and hardware already attached was overwhelming on what I would need to learn. However, with MN Solar and More answering all questions and concerns I feel well protected by this company.
Read more
Average cost (5kW system)
$16,500 ($3.30 per watt)
Latest review
DevinM, 3 weeks ago
Purchasing a house in the summer with solar panels and hardware already attached was overwhelming on what I would need to learn. However, with MN Solar and More answering all questions and concerns I feel well protected by this company.
4.60 18 Reviews
Latest review
Lansing, 3 weeks ago
I chose them because they were close to where I live, knowledgeable and willing to work with me.
Read more
Average cost (5kW system)
$20,550 ($4.11 per watt)
Latest review
Lansing, 3 weeks ago
I chose them because they were close to where I live, knowledgeable and willing to work with me.
4.55 61 Reviews
Latest review
Vicki D, over 1 month
We had an amazing experience working with Energy Concepts in Hudson, WI. From start to finish, they were detailed and professional in their proposal and explanations. Russel and Claudia were great to work with. They helped us with our Focus on Energy rebate info and did everything they said they were going to. Our panels are beautiful and absorbing tremendous amounts of energy already! We highly recommend Energy Concepts.
Read more
Latest review
Vicki D, over 1 month
We had an amazing experience working with Energy Concepts in Hudson, WI. From start to finish, they were detailed and professional in their proposal and explanations. Russel and Claudia were great to work with. They helped us with our Focus on Energy rebate info and did everything they said they were going to. Our panels are beautiful and absorbing tremendous amounts of energy already! We highly recommend Energy Concepts.
4.44 15 Reviews
Latest review
Michael O., over 1 month
I was at first a bit nervous going with Northstar due to how much smaller and newer they were compared to some of the much larger Solar guys that are out there. However they know their stuff, I and am overall glad that I chose to go with them. Explanation of the upfront quote and options was way more detailed (in a good way) than other suppliers. Pricing is also competitive. We ran into a few minor road bumps along the way, but Frank (the owner) ultimately listened to our concerns and made things right. Our system has been up and running for 6+ months and is working great. Good, legitimate small-business company that is local.
Read more
Average cost (5kW system)
$22,250 ($4.45 per watt)
Latest review
Michael O., over 1 month
I was at first a bit nervous going with Northstar due to how much smaller and newer they were compared to some of the much larger Solar guys that are out there. However they know their stuff, I and am overall glad that I chose to go with them. Explanation of the upfront quote and options was way more detailed (in a good way) than other suppliers. Pricing is also competitive. We ran into a few minor road bumps along the way, but Frank (the owner) ultimately listened to our concerns and made things right. Our system has been up and running for 6+ months and is working great. Good, legitimate small-business company that is local.
4.42 8 Reviews
Latest review
Venkat, over 1 month
Mark and Ben’s team did an excellent job on the solar installation at our home late 2019 and early 2020. We have been super happy with their professionalism and how they have explained all options to us on our journey. I would recommend the live wire guys to any body that is looking at Solar.
Read more
Latest review
Venkat, over 1 month
Mark and Ben’s team did an excellent job on the solar installation at our home late 2019 and early 2020. We have been super happy with their professionalism and how they have explained all options to us on our journey. I would recommend the live wire guys to any body that is looking at Solar.
4.38 7 Reviews
Latest review
Randi, over 1 month
Working with Olson Solar Energy was amazing from the quote, through installation, and after install when submitting documentation for the energy rebates. They made it easy for me as the homeowner, which I really appreciate. I highly recommend them if you are looking into adding solar to your home.
Read more
Latest review
Randi, over 1 month
Working with Olson Solar Energy was amazing from the quote, through installation, and after install when submitting documentation for the energy rebates. They made it easy for me as the homeowner, which I really appreciate. I highly recommend them if you are looking into adding solar to your home.
4.32 25 Reviews
Latest review
JOHN, over 1 month
first, the office was local, second the response from the salesman and installation team was very cordial and helpful.
Read more
Latest review
JOHN, over 1 month
first, the office was local, second the response from the salesman and installation team was very cordial and helpful.
Latest review
Tom Loeffler, over 1 month
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