Federal ITC 26% (tax credit)
State tax credit: No
Net metering (by utility)
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.
South Dakota is a decent place to install home solar panels, but not due much to the effort of state lawmakers here, outside of a property tax exemption. The state gets a good amount of sun throughout the year and solar panel module prices continue to fall.
Your financial savings could be enhanced further with a stronger state renewable portfolio standard, and nature would benefit from this transition, too. We urge anyone who cares about being part of a cleaner energy future to demand more from your state representatives.
Read on to explore the entire savings, policy, and incentive picture for home solar panel installation in South Dakota.
Learn what solar incentives are available to South Dakota homeowners
See what South Dakota solar incentives you qualify for based on your utility company and city
Find out how much these incentives and/or South Dakota solar tax credits will reduce your cost to go solar and add batteries
The federal solar investment tax credit will have the biggest impact on the cost you will face to go solar in South Dakota
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.
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.
Unfortunately, there is no state policy in South Dakota to ensure your utility company provides you credit for the excess solar electricity you produce and aren't able to use onsite. That's why it'll be important you size your home solar panel system well so you aren't regularly churning out more kilowatt hours than you consume!
While South Dakota does not have a dedicated state rebate for solar panel installation, some manufacturers like LG offer their own solar rebates. These programs are usually time sensitive. For example, LG offers a $600 solar rebate on their equipment, which your installer can help you redeem over the next year.
The only silver lining in South Dakota’s relative lack of solar incentives is its strong property tax exemption for home solar panels. All solar power systems less than 5 megawatts (all but the very largest solar power systems) are assessed in the same manner as a conventional energy system (even though the solar power system is actually worth significantly more because of long-term savings on your electric bill). That’s what we’re used to seeing in a property tax exemption.
South Dakota then takes it one dramatic step farther: the first $50,000 or 70% of the assessed value of the property used for producing solar power (i.e., your home), whichever is greater, is exempt from property taxes for four years. That may well be the strongest property tax exemption we’ve seen in the country.
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Prices based on a 10.5kW system, after 26% federal tax credit
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