Solar Power in Minnesota

Minnesota solar power producers in Xcel Energy territory receive an annual rebate for solar production for 10 years — in addition to net metering. This program offers incentives to customers for installing PV panels and inverters listed on the California Energy Commissions (CEC) list. The PV system must be designed to produce less than 120 percent of the customer’s annual energy use, based on the past 12 months of energy use, and may have a capacity of 0.5 to 40 KW. Only licensed Minnesota solar power installers can participate in this program.

Incentives for solar PV are performance-based, established by a system’s energy production, and paid for over 10 years.  

Schedule a free consultation to learn how this rebate can work for you!

Available for customers of Rochester, Owatonna, and Austin Public Utilities.

The Conserve & Save Rebate program offers incentives to customers of Rochester, Owatonna, and Austin Public Utilities for installing a PV system that meets the MN Dept. of Energy’s rebates requirements in addition to the utility requirements. The PV system must have a capacity of at least 2 KW.

Incentives for solar PV are currently set at a flat rate of $500 per system, regardless of size.

Schedule a free consultation to learn how this rebate can work for you!

Available for customers of Dakota Electric Association.

To assist residential members in recovering the costs associated with installing a solar system, Dakota Electric created a one-time $500 rebate, per premise, upon the installation and commission of your solar photovoltaic (PV) array.

Schedule a free consultation to learn how this rebate can work for you!

Available for solar customers of all utility companies throughout Minnesota.

What is net metering? Net metering is the policy that allows people with a solar power system on their property to receive a credit on their electric bill for the excess energy they produce. Customers of any Minnesota public utility, municipal utility, and rural electric coops may participate in net metering, however, the rules of how it works and how much compensation is received differ depending on the electricity provider in your area and the size of your solar energy system.

Solar power customers with utility net metered systems will be credited for each kilowatt produced by their system that is sent back into the grid. If your solar power generation exceeds your electricity usage for a given month, you will receive a credit for each excess kilowatt hour, to be applied in later months when you generate less electricity than you consume.

Schedule a free consultation to learn how net metering helps your system pay for itself!

Available for rural customers, as defined by the USDA. 

The Rural Energy for America Program (REAP) provides financial assistance to agricultural producers and rural small businesses in rural America to install solar PV systems.  The maximum funding available is 25% of system cost, and each business’s total incentive will be determined based on a business-level feasibility study.

Schedule a free consultation to learn whether your business qualifies for USDA REAP funding!

Available to any business in the United States. 

Under the federal Modified Accelerated Cost-Recovery System (MACRS), businesses may recover investments in PV through depreciation deductions.  A solar PV system is classified as five-year property (26 USC § 168(e)(3)(B)(vi)) under the MACRS, which refers to 26 USC § 48(a)(3)(A) to define eligible property. 

Schedule a free consultation to learn how accelerated depreciation on solar can help your business!

Available to any property owner in the United States.

Established by The Energy Policy Act of 2005, the federal tax credit for residential energy property applies to solar-electric systems and several other renewable energy technologies. The Consolidated Appropriations Act, signed in December 2015, extended the expiration date for PV technologies, and introduced a gradual step down in the credit value for these technologies. Additional extensions of the federal solar investment tax credit occurred in 2020 and 2022.

Expenditures with respect to the equipment are treated as made when the installation is completed. If the installation is at a new home, the “placed in service” date is the date of occupancy by the homeowner. Expenditures include labor costs for on-site preparation, assembly or original system installation, and for piping or wiring to interconnect a system to the home.

The maximum allowable credit, equipment requirements and other details vary by placed in service date, as outlined below.

Solar-electric tax credit step-down schedule

• 30% for all systems placed in service between 1/1/2022 to 12/31/2032
• 26% for systems placed in service after 12/31/2032 and before 01/01/2033
• 22% for systems placed in service after 12/31/2033 and before 01/01/2034
• Standalone solar battery storage is eligible for the tax credit, as of January 1, 2023
• Systems must be placed in service on or after January 1, 2006, and on or before December 31, 2034.
• For residential installations, the home served by the system does not have to be the taxpayer’s principal residence.
• For both residential and commercial installations, if the project meets certain criteria, the Investment Tax Credit can be greater than 30%.

If the federal tax credit exceeds tax liability, the excess amount may be carried forward to the succeeding taxable year. The form that you will need to complete in order to file for the federal tax credit is Form 5695. It is to be filed in conjunction with your Federal Income Tax Return. This form can be found at www.irs.gov.

Schedule a free consultation to learn how this tax credit can work for you!