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:
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
27 solar companies in Minnesota provide pricing on SolarReviews. Here are the best rated companies near you.
4.87 354 Reviews
Latest review
Joanne Handibode , 1 week ago
We got the OK to turn our panels on today and we could not be happier with the entire experience with All Energy. Carlo has been with us since the beginning. He was always available, proactive knowledgeable and helpful. Alfie, the electricians and the install crews that came to to the house were phenomenal. They were quiet, kept a clean site and were there when they said they'd be. They were fair and honest, and respectful. I will be contunue to highly recommend them in the future.
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Latest review
Joanne Handibode , 1 week ago
We got the OK to turn our panels on today and we could not be happier with the entire experience with All Energy. Carlo has been with us since the beginning. He was always available, proactive knowledgeable and helpful. Alfie, the electricians and the install crews that came to to the house were phenomenal. They were quiet, kept a clean site and were there when they said they'd be. They were fair and honest, and respectful. I will be contunue to highly recommend them in the future.
4.80 56 Reviews
Latest review
Brent, 3 weeks ago
I have very few contractors I have used who I would highly recommend to anyone. MN Solar met and exceeded my expectations making adding solar to my house a completely seamless process. MN Solar installed a 5.55kw system on my house, and I couldn't be happier. From the initial contact until the final inspection and final payment, MN Solar showed extreme professionalism. If you are uncertain about how difficult the process is, I would quickly tell you that they make it as seamless as possible.
Read more
Average cost (5kW system)
$16,500 ($3.30 per watt)
Latest review
Brent, 3 weeks ago
I have very few contractors I have used who I would highly recommend to anyone. MN Solar met and exceeded my expectations making adding solar to my house a completely seamless process. MN Solar installed a 5.55kw system on my house, and I couldn't be happier. From the initial contact until the final inspection and final payment, MN Solar showed extreme professionalism. If you are uncertain about how difficult the process is, I would quickly tell you that they make it as seamless as possible.
4.74 187 Reviews
Latest review
Isral DeBruin, 2 days ago
DO IT. You won't regret it. Our solar array has been 'live' for about six months now, and we are so glad we went for it. It is already saving us TONS of money (wiping out our entire electrical bill, even during peak summer AC months). Our system uses Enphase microinverters, so we've got a cool phone app that allows us to see exactly how much electricity we're generating at any time relative to how much power we are consuming. Our experience with Sun Badger was mostly positive. The sales experience was great. Our rep was helpful, knowledgable, and very responsive. He wasn't pushy at all, but was prompt with correspondence, deliverables (like revised quotes) scheduled follow-ups, etc. The installation guys were friendly and professional. We did have one minor issue where they placed a utility box in our basement without asking us about the location, but they moved it with no questions asked. Our solar project was part of a much larger remodel, and this meant some of the solar work had to be scheduled around other parts of the project. This caused some delays (mostly because of COVID). Sun Badger was pretty flexible about this, though I did have some tense phone calls with one of the top bosses, who was unhappy about how long the project had been drawn out. Ultimately we found an agreeable solution. So, overall -- I would definitely recommend going solar, and I would give a thumbs up to Sun Badger.
Read more
Latest review
Isral DeBruin, 2 days ago
DO IT. You won't regret it. Our solar array has been 'live' for about six months now, and we are so glad we went for it. It is already saving us TONS of money (wiping out our entire electrical bill, even during peak summer AC months). Our system uses Enphase microinverters, so we've got a cool phone app that allows us to see exactly how much electricity we're generating at any time relative to how much power we are consuming. Our experience with Sun Badger was mostly positive. The sales experience was great. Our rep was helpful, knowledgable, and very responsive. He wasn't pushy at all, but was prompt with correspondence, deliverables (like revised quotes) scheduled follow-ups, etc. The installation guys were friendly and professional. We did have one minor issue where they placed a utility box in our basement without asking us about the location, but they moved it with no questions asked. Our solar project was part of a much larger remodel, and this meant some of the solar work had to be scheduled around other parts of the project. This caused some delays (mostly because of COVID). Sun Badger was pretty flexible about this, though I did have some tense phone calls with one of the top bosses, who was unhappy about how long the project had been drawn out. Ultimately we found an agreeable solution. So, overall -- I would definitely recommend going solar, and I would give a thumbs up to Sun Badger.
4.69 27 Reviews
Latest review
Patrick, 2 weeks ago
Solar Connection truly provided a connection of history with the present. The solar panel installation on an historic carriage house renewed the purpose of the building. Where hay was once fed to horses to pull carriages, the panels now power an electric car. Solar Connection professionaly made this dream come true.
Read more
Average cost (5kW system)
$20,550 ($4.11 per watt)
Latest review
Patrick, 2 weeks ago
Solar Connection truly provided a connection of history with the present. The solar panel installation on an historic carriage house renewed the purpose of the building. Where hay was once fed to horses to pull carriages, the panels now power an electric car. Solar Connection professionaly made this dream come true.
4.66 43 Reviews
Latest review
Jeremy , over 1 month
The EverlightSolar team should up and were very professional. They answered all the questions we had and made everything very smooth. Very easy to work with.
Read more
Latest review
Jeremy , over 1 month
The EverlightSolar team should up and were very professional. They answered all the questions we had and made everything very smooth. Very easy to work with.
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.
Read more
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!
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