Our complete guide to solar power in Minnesota
Solar power in Minnesota
Last fact checked on January 24, 2020 by Catherine Lane
Although Minnesota receives less sun exposure than some other states and has relatively inexpensive electric rates, utilities in the state offer a variety of rebates that make going solar an affordable and smart option. Those rebates combined with the 26% federal tax credit and the state’s mandatory net metering law make for great savings.
Cheap power plus snowy weather draws out the payback period for a solar system to about 8 to 10 years in The North Star State. However, after that time you will have about 15 years of free power to look forward to.
If you’re a Minnesota homeowner, you should take advantage of these incentives before they run out!
Calculate solar panel cost and savings for your home
Minnesota solar power facts
Average cost: 5kw solar power system?
9 Years 6 Months
Average payback time
Average lifetime savings?
Levelized cost of solar energy
If you don't get solar?
Annual power production
Cash flow graph based on cash purchase of a 11.73kW system
This 11.73kW system would offset 100% of your energy usage if your typical monthly bill in Minnesota is $150, however your situation may vary so try our solar calculator to get a result tailored to you.
Solar companies in Minnesota that provide pricing through the Solar-Estimate marketplace:
Compare solar quotes from the top solar companies in Minnesota
How much do solar panels cost in Minnesota?
Cash purchased solar system
Before 26% solar tax credit
Financed solar system
Before 26% solar tax credit
Before 26% solar tax credit
What are the pros and cons of installing solar panels in Minnesota?
The advantage of installing solar panels in Minnesota is that there are great utility incentives available. Also, the state requires utilities to offer full retail credit for excess solar generation. Since Minnesota has a solar carve out in their renewable portfolio standard, utilities are required to have a certain percentage of their energy come from solar systems smaller than 20 kilowatts (kW), which means incentives for residential solar systems are likely to stick around. Not to mention, you can take advantage of the 26% federal tax credit, as well.
SolarPowerRocks provides a great breakdown of solar incentives and policy for each state within the US.
The disadvantage of installing solar panels for your home is that there is less overall sunshine in Minnesota, meaning a solar system here will produce less than a solar system in a state like Arizona. Also, electric rates are less expensive compared to other states, making the payback period for a system a bit longer.
However, the available incentives more than make up for these shortcomings. Minnesota homeowners will be kicking themselves if they don’t install solar panels while these generous incentives are still around.
Best brands of solar panels
To find the best brands of solar panels you can use America's most trusted solar panel comparison and reviews website, SolarReviews.
However, reviews of solar panels can be a bit meaningless because most consumer owners have not had any issues and so while solar company reviews are very important when choosing solar installers they are of less use when choosing solar panels.
For more information to help you make an informed decision about this topic, I would recommend this article about buying solar panels.
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How much electricity will solar panels produce in Minnesota
Solar panels produce different amounts of energy in different locations.
Around the Minneapolis area solar panels installed on a south facing 35 degree pitch roof will typically produce:
per year per 1kw of peak DC (direct current) capacity
For more information about how your location, roof direction and roof tilt affects solar power production use the solar panels calculator and enter your address below.
See how much electricity your solar could produce
I want to buy a solar panel kit and install it myself
What rebates, solar tax credits and other solar incentives are available in Minnesota?
Net metering in Minnesota
Minnesota’s net metering law applies to all investor-owned utilities, municipal utilities, and electric cooperatives.
Each utility must compensate customers with systems less than 40 kW in size for net excess generation at the average retail utility energy rate. The average retail utility energy rate is equal to the total annual class revenue from sales of electricity minus the annual revenue resulting from fixed charges, divided by the annual class kWh sales.
Compensation for excess energy may take the form of an actual payment (i.e a check) or as a credit on the customer’s bill.
Renewable portfolio standard (RPS) and Minnesota Renewable Energy Credits (RECs)
Minnesota has a renewable portfolio standard (RPS) that requires utilities to generate 20% of their electricity from renewable resources by 2020, with that goal increasing to 25% of electricity to be generated from renewable sources by 2025.
The state’s RPS also requires a certain percentage of their renewable goal to be derived from solar power, and a certain percentage from solar power from solar systems with a capacity of 20 kW or less.
In order to meet their solar requirements, utilities must obtain RECs, which are credits that represent the environmental benefits of producing energy through renewable resources. A registered solar system produces 1 REC for every 1 megawatt hour (MWh) of solar electricity generated. In response, some utilities created rebate programs in which they will pay their solar customers a certain rate per kW of solar installed in exchange for the RECs their customers’ systems produce.
Check your utility’s website to find out what kind of solar rebate programs they have available.
Xcel Energy’s Solar*Rewards Program
Customers of Xcel Energy can enroll in the Solar*Rewards program. Through this program, Xcel will pay its customers a rate of $0.07 per kWh of solar energy produced. In return, Xcel Energy retains the rights to all RECs the systems produce.
Minnesota offers two tax exemptions for solar systems: a sales tax exemption and a property tax exemption.
Under the property tax exemption for solar generating systems, 100% of the assessed value of the solar system is exempt from the homeowner’s property taxes.
The sales and use tax exemption prevents the addition of sales and use tax to machinery and equipment associated with a solar energy system.
City of Minneapolis Green Cost Share
For residents of the city of Minneapolis, there is a local incentive program called Green Cost Share. This program targets buildings in designated “Green Zones” or citizens participating in the “4d Naturally Occurring Affordable Housing Program”.
Rebates of up to $75,000 for commercial and multi-family buildings are available, and up to $100,000 is available using the “Solar Group Buy” option. Solar Group Buy is used when several single-family home owners participate in a solar purchase with an approved solar installer.
For details, be sure to reach out to a local Minneapolis solar installer. You can also visit the City of Minneapolis Green Cost Share page for more information.
Is it better to lease or purchase solar panels in Minnesota?
It can be difficult to decide how to finance your solar system. Various zero-down solar leases and solar power purchase agreement (PPA) products are popular in Minnesota because they minimize upfront costs for installing solar. However, instead of entering into a third party-owned solar lease or PPA, you are likely to see far greater savings over the life of a system if you purchase your solar panels outright, whether it be with cash or through a loan.
You can use the solar savings calculator to see the difference in the overall savings over the life of a system.
Regardless of what you want to know about the economics of installing solar panels for your home or business in Minnesota we have a solar calculator that can show you exactly the information your require.
What you can find out about installing solar panels in Minnesota using our full monthly solar calculator
This solar calculator requires you to input your address, utility company, your average monthly power spend - It tells you:
- What size solar system do you need?
Answers the question of How many solar panels do I need?
- How many square feet of roof space you need for solar panels
- Solar electricity production in annual kWh (kilowatt hours) you can expect from your solar system in Minnesota
- The value of solar tax credits and other incentives you are entitled to based on the estimated size of system you need, your location and your utility provider.
- Likely cost based on an average of prices charged for solar systems of that size in the last year in Minnesota or Minneapolis ;
- The likely payback period on your solar panels and your investment return.
- Your total lifetime solar savings based on each of the major solar finance options, a cash purchase, a cash purchase funded with a HELOC sol (home equity line of credit) and a zero down PPA or third party lease product.
If you want to see all of the above but also see live pricing, the three best solar deals available in your city and get binding quotes from each of these solar companies then use this Minnesota solar panels calculator. This calculator requires you to also input your name and contact details because most of our 200+ installer partners will only authorize the sharing of their live solar pricing where we have validated that you are a real homeowner with a home in their service area. We respect the privacy of your data and only share your contact details with the solar companies you ask us to get binding quotes from.
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Going solar in Minnesota
Check out all of the ways energy providers of Minnesota can help you be more energy efficient and save money.
The following programs are available:
|Residential Renewable Energy Tax Credit||Federal||Personal Tax Credit|
|Net Metering||State||Net Metering|
|Minnesota Power - SolarSense Solar Rebate Program||Utility||Rebate Program|
|Owatonna Public Utilities - Residential Conserve and Save Rebate Program||Utility||Rebate Program|
|Rochester Public Utilities - Solar Rebate Program||Utility||Rebate Program|
|Austin Utilities - Solar Rebate Program||Utility||Rebate Program|
|Brainerd Public Utilities - Renewable Incentives Program||Utility||Rebate Program|
|New Ulm Public Utilities - Solar Electric Rebate Program||Utility||Rebate Program|
|Made in Minnesota Solar PV Incentive Program||Utility||Performance-Based Incentive|
|Dakota Electric Association - EnergyWise Solar Installation Rebate||Utility||Performance Based Incentive|
|Grand Rapids PUC - Solar Electric Rebate Program||Utility||Rebate Program|
|Shakopee Public Utilties - Solar Electric Rebate||Utility||Rebate Program|
|Xcel Energy's Solar*Rewards Program||Utility||Performance-Based Incentive|
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Your city may have further incentives to offer. Please keep in mind that the best source of up-to-date information on incentives are the solar installers who specialize in your area.