North Dakota’s Key Solar Incentives: A Breakdown

Image source: Canva.com

North Dakota may not be the first state that comes to mind when thinking about solar energy, but it offers a range of incentives that make solar power more appealing to homeowners and businesses. With a combination of federal tax credits, state programs, and utility-based incentives, North Dakotans have several opportunities to reduce the cost of installing solar systems. In this guide, we’ll break down the key solar incentives available in North Dakota, explaining how they work and how you can take advantage of them to maximize your savings while contributing to a cleaner energy future.

The Residential Clean Energy Credit

The Residential Clean Energy Credit, previously 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.

To claim this incentive, you need to purchase your system with cash or a solar loan, as leasing does not qualify for the ITC. You must have a sufficient federal tax liability to use the credit, though any unused portion can be rolled over year-to-year until the ITC expires at the end of 2034. Direct payment of the ITC is only available to tax-exempt entities, such as nonprofit organizations.

Net Metering

In North Dakota, investor-owned utilities are required to offer net metering to all customers, providing a valuable opportunity for homeowners to offset their energy costs. However, electric cooperatives and municipal utilities are exempt from this regulation, meaning only customers of investor-owned utilities can take advantage of net metering. If you’re one of the fortunate customers of these utilities, the electric company will issue a payment for any surplus energy your solar system generates, but only at the utility’s avoided-cost rate, which is typically lower than the retail rate. This means you won’t be fully compensated for the electricity your system sends back to the grid.

All systems up to 100 kW in size are eligible for net metering, but for residential-sized systems, it’s crucial to size your system properly. Overproduction of energy could lead to sending valuable electricity back into the grid at a reduced rate, minimizing your potential savings. To maximize your solar investment, it may also be worth exploring home energy storage options, allowing you to store and use your own power when you need it, rather than selling it back at a lower cost. Proper system sizing and storage could help you make the most of North Dakota’s net metering policy.

Property Tax Exemption

The state of North Dakota offers an important opportunity for homeowners to ease their financial burden through a property tax credit. By applying for this credit through the North Dakota Office of State Tax Commissioner, residents can take advantage of potential savings on their property taxes. If their application is approved, eligible homeowners may receive a credit of up to $500 against their property tax obligations for the year 2024. This initiative aims to provide relief to North Dakotans, helping to make homeownership more affordable and sustainable in the community. Homeowners are encouraged to explore this beneficial program and submit their applications to potentially reduce their tax liabilities.

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 North Dakota Solar for All (SFA) initiative aims to mitigate greenhouse gas and other air pollutants by promoting the widespread adoption of solar technologies throughout the state. This effort involves providing solar arrays to single-family homes and facilitating the development of solar units for multi-family dwellings through grants, tax incentives, and low-interest lending programs. 
• The Northern Plains Tribal Solar for All (NPT-SFA) program aims to revolutionize energy and economic systems within disadvantaged communities through substantial and concentrated investments. Initially focusing on North Dakota, South Dakota, and Montana, with later expansion to include tribes in Wisconsin and Wyoming, NPT-SFA draws inspiration from a successful pilot program conducted on the Northern Cheyenne reservation in Montana. Central to its strategy is the establishment of Tribally-owned and managed portfolios of solar systems installed at the homes of Tribal members. By capitalizing on factors such as high electricity prices, frequent power outages, and inefficient housing stock, NPT-SFA aims to implement impactful initiatives. 
• 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. 

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.