Summary of Minnesota solar incentives 2021
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% at the end of 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 $0.083 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 2021
10.1kW
Solar panel cost calculator
Best 10 solar companies in Minnesota
24 solar companies in Minnesota provide pricing on SolarReviews. Here are the best rated companies near you.
4.86 305 Reviews
Latest review
Jeff Rakers, 2 days ago
My wife and I chose All Energy Solar for our solar installation and am happy to recommend them to anyone considering solar for their home. They did a great job of helping lead us through the process, providing all the technical, financial and utility company related information my wife and I needed in an understandable and professional manner. We never felt pressured or unsafe, even doing this in the midst of the COVID-19 pandemic. The installation was easy and efficient and I was kept in the loop all the way. David D'Onofrio did a great job explaining the details of the system and the proposal, and after we went with All Energy Solar, Carlo Maloni did a great job as the Project Manager keeping us up to speed on what was happening and what we needed to do. We are very satisfied and glad we chose All Energy Solar! We started exploring our solar options last summer. After getting quotes from 5 different solar installers, reviewing and comparing their offerings and the financing options, All Energy gave us what we found is the right sized system with brand named components at the best value. They pointed us to and helped us with financing options. All of the people we engaged with were great people to deal with, including the designers and installers. So overall a great experience that we are happy with and feel we will be happy with for years to come!
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Latest review
Jeff Rakers, 2 days ago
My wife and I chose All Energy Solar for our solar installation and am happy to recommend them to anyone considering solar for their home. They did a great job of helping lead us through the process, providing all the technical, financial and utility company related information my wife and I needed in an understandable and professional manner. We never felt pressured or unsafe, even doing this in the midst of the COVID-19 pandemic. The installation was easy and efficient and I was kept in the loop all the way. David D'Onofrio did a great job explaining the details of the system and the proposal, and after we went with All Energy Solar, Carlo Maloni did a great job as the Project Manager keeping us up to speed on what was happening and what we needed to do. We are very satisfied and glad we chose All Energy Solar! We started exploring our solar options last summer. After getting quotes from 5 different solar installers, reviewing and comparing their offerings and the financing options, All Energy gave us what we found is the right sized system with brand named components at the best value. They pointed us to and helped us with financing options. All of the people we engaged with were great people to deal with, including the designers and installers. So overall a great experience that we are happy with and feel we will be happy with for years to come!
4.77 45 Reviews
Latest review
Chris, 4 hours ago
I'm SO happy with the experience we had with MN Solar. They were knowledgeable about current state, federal and utility incentives and made sure that I was taking advantage of every program available to me. Their process was thorough, smooth, and painless from my end. I felt informed of next steps throughout and their installers took the time to talk me through everything any time I had questions. I highly recommend them for your solar installation.
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Average cost (5kW system)
$16,500 ($3.30 per watt)
Latest review
Chris, 4 hours ago
I'm SO happy with the experience we had with MN Solar. They were knowledgeable about current state, federal and utility incentives and made sure that I was taking advantage of every program available to me. Their process was thorough, smooth, and painless from my end. I felt informed of next steps throughout and their installers took the time to talk me through everything any time I had questions. I highly recommend them for your solar installation.
4.73 142 Reviews
Latest review
Lindsey, 1 week ago
Overall a good experience. Communication could have been a little better during the project. My panels are working great! Can't wait to see my Xcel bill go way down. Brenda was a great salesperson and Lindsey was very helpful after my panels were installed.
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Latest review
Lindsey, 1 week ago
Overall a good experience. Communication could have been a little better during the project. My panels are working great! Can't wait to see my Xcel bill go way down. Brenda was a great salesperson and Lindsey was very helpful after my panels were installed.
4.63 20 Reviews
Latest review
Derek & Rachel, over 1 month
From initial inquiry to the commissioning, working with their Team made the unknown path of going solar a breeze. Each person was very informative and quick to help any way possible. They made each step go smooth. We would definitely recommend Solar Connection!!
Read more
Average cost (5kW system)
$20,550 ($4.11 per watt)
Latest review
Derek & Rachel, over 1 month
From initial inquiry to the commissioning, working with their Team made the unknown path of going solar a breeze. Each person was very informative and quick to help any way possible. They made each step go smooth. We would definitely recommend Solar Connection!!
4.57 62 Reviews
Latest review
Jesse Hennum, over 1 month
Energy concepts developed a great plan for our cabin and due to unexpected events beyond their control had to fight through some pretty huge obstacles in this pandemic year. Despite those challenges they completed a beautiful 12 kw project in the expected time frame. Russel is extremely responsive for all questions and concerns.
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Latest review
Jesse Hennum, over 1 month
Energy concepts developed a great plan for our cabin and due to unexpected events beyond their control had to fight through some pretty huge obstacles in this pandemic year. Despite those challenges they completed a beautiful 12 kw project in the expected time frame. Russel is extremely responsive for all questions and concerns.
4.46 16 Reviews
Latest review
M.T. Mondovi, WI, over 1 month
Winona's quote proved the best value of three different quotes I received. They were professional and timely throughout the whole process. I found them to be honest and straightforward. I appreciated the staff's willingness to explain various details before, during and after installation. All members of the team gave the same professional courtesy and personal touch, which I felt confirmed a company with a great culture of service. I would not hesitate to recommend Winona Renewable Energy, in fact I would encourage anyone interested in solar to go with Winona Renewable!
Read more
Average cost (5kW system)
$19,050 ($3.81 per watt)
Latest review
M.T. Mondovi, WI, over 1 month
Winona's quote proved the best value of three different quotes I received. They were professional and timely throughout the whole process. I found them to be honest and straightforward. I appreciated the staff's willingness to explain various details before, during and after installation. All members of the team gave the same professional courtesy and personal touch, which I felt confirmed a company with a great culture of service. I would not hesitate to recommend Winona Renewable Energy, in fact I would encourage anyone interested in solar to go with Winona Renewable!
4.46 9 Reviews
Latest review
Ryan R, over 1 month
I had always found solar really interesting but didn't understand how to do it or the ROI. Olson Solar made it super easy and an extremely painless, fast process. If you're in WI, call these guys first. Reliable and efficient.
Read more
Latest review
Ryan R, over 1 month
I had always found solar really interesting but didn't understand how to do it or the ROI. Olson Solar made it super easy and an extremely painless, fast process. If you're in WI, call these guys first. Reliable and efficient.
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.
4.42 22 Reviews
Latest review
Anonymous, over 1 month
Midwest installed an 18.9 kw ground mounted system for us that was an especially challenging set of circumstances. Without going into all the details, let's just say they went above and beyond to do whatever it took to make this work, and stayed at their quoted amount even after a lot of challenges. Top notch organization!
Read more
Latest review
Anonymous, over 1 month
Midwest installed an 18.9 kw ground mounted system for us that was an especially challenging set of circumstances. Without going into all the details, let's just say they went above and beyond to do whatever it took to make this work, and stayed at their quoted amount even after a lot of challenges. Top notch organization!
4.40 42 Reviews
Latest review
Marc Wallace , 5 days ago
From the initial call through the build and with following up on the switch on, everyone has been good to work with and positive. They even sent a team to fill in a trench in the yard with soil and grass seed. Seeing the energy production on the app is gratifying too.
Read more
Latest review
Marc Wallace , 5 days ago
From the initial call through the build and with following up on the switch on, everyone has been good to work with and positive. They even sent a team to fill in a trench in the yard with soil and grass seed. Seeing the energy production on the app is gratifying too.
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