Minnesota’s Key Solar Incentives: A Breakdown

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Minnesota is a leader in promoting renewable energy, offering a variety of solar incentives to make the transition to solar power more accessible and affordable for residents and businesses. This article explores the various solar incentives available in Minnesota, detailing how they can significantly reduce the financial burden of going solar.

Residential Renewable Energy Income Tax Credit

The Residential Clean Energy Credit, formerly known as the federal investment tax credit (ITC), can reduce the cost of your solar panel system by 30%. This incentive covers the entire system, including equipment, labor, permitting, and sales tax. For a 5 kW solar panel system, costing around $15,603 in Minnesota, the credit reduces the price to $10,922. To qualify, you must purchase the system with cash or a solar loan. If your tax liability isn’t high enough, you can roll over the credit until 2034 when the ITC expires. Tax-exempt entities may be eligible for a direct payment instead.

Solar for All

• The Community Power Coalition (CPC)’s SFA program, “Powering America Together,” will collaborate with and enhance the impact of the US Department of Energy’s National Community Solar Partnership and Community Power Accelerator program. Led by Inclusive Prosperity Capital, Inc., CPC comprises seasoned community solar experts who have contributed to the Community Power Accelerator as developers, lenders, trainers, and technical assistance providers. The program aims to support the development of low-income community solar projects, reduce carbon emissions, lower energy costs, and promote quality jobs, community wealth-building, energy resilience, and equitable workforce development. 
• The Division of Energy Resources within the Minnesota Commerce Department (COMM) is committed to facilitating residential solar access for low-income and disadvantaged households throughout Minnesota, including federally recognized Tribal communities within the state’s boundaries. Leveraging Solar for All (SFA) funds, COMM will offer financial support in the form of grants, loans, and credit enhancements, alongside workforce development initiatives, interconnection assistance, pre-development technical guidance, energy navigation services, community engagement and educational efforts, and administrative support. 
• The Midwest Tribal Energy Resources Association, Inc. (MTERA), along with coalition partners GRID Alternatives (GRID), the Alliance for Tribal Clean Energy (ATCE), and the Native CDFI Network (NCN), will implement Tribally-owned residential solar projects, including storage and essential upgrades, benefiting the 35 Tribes located in Michigan, Minnesota, and Wisconsin. Based in Wisconsin, the coalition will capitalize on the extensive expertise and experience of its members to develop a program that empowers Tribes and tribal energy advocates. It will offer technical assistance for project deployment to aid in planning and constructing residential solar projects on Tribal Lands in the Midwest, while also focusing on workforce development to bolster Tribal self-determination and self-sufficiency.
• Grid Alternatives’ Western Indigenous Network Solar For All (WIN-SFA) program draws on its extensive experience in working with Tribal communities, aiming to maximize benefits for Tribal households and advance energy sovereignty while addressing environmental degradation and climate change. Through the provision of financial assistance in the form of grants and incentives, coupled with technical support from organizations with expertise in equitable deployment of renewable energy in Tribal settings, WIN-SFA seeks to bring solar power to thousands of Native American households nationwide.
• Teaming up with lead applicant GRID Alternatives, a coalition of ten mission-driven nonprofit solar and affordable housing providers and allies has collaborated to develop the Solar Access for Nationwide Affordable Housing Program (SANAH). SANAH is meticulously crafted to maximize benefits for households and communities while advancing equity, reducing harmful pollution, and combating climate change. The program offers a multitude of advantages, including expanded access to solar and storage for income-qualified households, significant energy savings and relief from burdensome costs, as well as additional benefits like efficiency improvements and electrification. 

Net Metering

The Minnesota Public Utilities Commission’s net metering program allows customers who generate their own electricity to receive compensation for excess energy supplied to the grid. The compensation rate varies based on system size, utility type, and chosen rate structure. Options include average retail utility energy rates, simultaneous purchase and sale rates, and time-of-day rates. Customers can receive payments as bill credits or checks, and may also bank kWh credits for future use. The program aims to encourage distributed energy generation while ensuring fair compensation for excess production.

Sales Tax Exemption

Minnesotans are fortunate to be exempt from paying sales tax on solar panels, thanks to the state lawmakers. This means that residents do not have to allocate any portion of their budget towards state sales taxes when purchasing solar electric and heating systems. This exemption results in significant savings for individuals looking to invest in solar energy.

Minnesota Power’s SolarSense program

Minnesota Power’s SolarSense program aims to make solar energy more accessible to customers by offering rebates to reduce the initial costs of installing solar systems. This program specifically caters to customers who are interested in installing solar electric photovoltaic (PV) systems. The allocation of funds for the year 2024 is done through a lottery system, ensuring fairness in the distribution process. To be considered for funding, customers must submit a SolarSense application. The application period begins on March 1st of each program year. The total budget for 2024 is $87,675, with the possibility of additional funds carried over from previous years. As projects receive rebate allocations, the corresponding funds are moved to the reserved box. Once the project is completed and the rebates are processed, the funds are then transferred to the paid box. It is important to note that any reserved funds that are not utilized may be returned to the pool for reallocation.

Xcel Energy Solar*Rewards Program

All solar customers are entitled to receive Net Energy Metering (NEM) benefits through the installation of a solar system on their property. When the solar system generates more energy than the home consumes, the surplus energy is fed back into the grid. Any excess energy is stored in a virtual solar bank for the customer’s future use, particularly during months when solar production may be lower than the home’s energy consumption.

Moreover, customers who meet the criteria for Income Qualified or Disproportionately Impacted Communities can receive an upfront rebate of $1 per watt of installed solar, up to a maximum of 7kW, in addition to the Net Metering benefits.

Owatanna Public Utilities – Solar Rebate Program

OPU’s Conserve and Save® solar rebate program offers a cost-effective solution for installing solar technologies in your residence or commercial property. This initiative includes a rebate system that operates on a first-come, first-served basis.

Green Cost Share

The Green Cost Share program in Minneapolis offers solar funding of $200–$400 per kilowatt (kW) of installed solar capacity, up to a maximum of $50,000. This one-time funding is available to nonprofits, solar group purchases, multifamily units, and participants in the Minneapolis 4d Affordable Housing Incentive program. Additionally, energy efficiency projects are eligible for funding. 

Chaska Energy Rebates

The city of Chaska offers residents a one-time rebate for installed solar energy systems and other home energy-efficiency upgrades. The rebate is $250 per kilowatt (kW) of installed solar capacity, up to a maximum of $2,500. This incentive aims to support the adoption of renewable energy and enhance energy efficiency in homes.

Disclaimer

The information provided herein is for informational purposes only and is accurate as of the time of publication. Please be aware that the solar energy landscape, including technology, regulations, incentives, and market conditions, changes frequently. Therefore, it is essential to consult with qualified experts and professionals before making any decisions regarding solar energy installations or investments. This will ensure that you receive the most current and applicable advice tailored to your specific circumstances.