Popular Cities in Minnesota
How to Use the Solar Calculator
The best way to learn about local rebates, your home’s energy potential, and your eventual return on investment is to use our ModSun Solar Cost Calculator (see above). Enter your home address in the box, then click Check My Roof. You’ll get an instant picture of your roof’s productivity, your average energy expenses, and installation costs in your area—whether you decide to buy or loan. We’ll also provide system size recommendations and information about rebates and incentives you may be eligible for. Just select More Info under each purchasing strategy to learn more, and then connect with a solar pro.
Solar Power in Minnesota
Land of a thousand lakes, mecca for solar power—yes, we mean Minnesota! In fact, the Minnesota Commerce Commissioner projects that the state will soon leap into tenth place in the U.S. for installed solar capacity, with a whopping 500-megawatt increase in power expected just for 2016 alone.
If you don’t want to be left in the cold—literally and figuratively—you’ll want to get in on the trend soon so you can maximize your savings from government and utility incentives that will most likely be harder to come by as solar goes mainstream. Those who invest now can lock themselves into solar purchasing programs and rebates that may be lost when there’s less reason to encourage residents to make the switch to solar power. If you’re thinking of installing solar on your Minnesota rooftop, here’s a rundown of everything you need to know about residential solar power in your state.
Minnesota’s Solar Productivity
While it’s true Minnesota isn’t exactly known for its blistering sun, don’t make the mistake of underestimating the power of a few good hours of daylight. The National Renewable Energy Laboratory tracks solar potential throughout the U.S. and found that, with a UV index level of 0.84, some parts of Minnesota may get enough sun on average to generate a regular 5 kilowatt hours of electricity daily. The southwestern corner of the state tends to be slightly more productive than the north and east, so systems in southern towns like Alberta Lea, Worthington, and Montevideo may generate slightly more energy than their cousins to the east.
Solar Popularity in Minnesota
As mentioned earlier, Minnesota is climbing its way toward being one of the most pro-solar states in the country. That number is based mostly on projection, however—at the end of 2015, the state had a mere 35 megawatts of solar power installed. However, the state legislature’s aggressive renewables portfolio standard is making solar panels a hot commodity—in fact, Minnesota’s clean energy goal is to generate at least ten percent of its power from renewable sources by 2020.
Many residents have caught the state’s solar fever, and installations having been popping up everywhere. Notably, households throughout the state have the option of participating in one of the area’s new community garden program through Xcel Energy, or receiving their energy from one of the utility-scale installations either currently in operation, or soon to be live, throughout Minnesota, like North Star Solar near North Branch or Minnesota Power’s new solar project at Camp Ripley near Little Falls.
Average Minnesota Residential Electricity Use and Cost
Minnesota residents know the importance of good HVAC—with the state’s harsh winters, residents here can’t afford a heat failure. But those heating costs have a way of racking up—even if Minnesotans do pay a little less than average for electricity, an average per-kilowatt cost of 10.9 cents, compared to the national rate of 12 cents per kilowatt. Meanwhile, the Land of Lakes consumes quite a bit of electricity—in 2014, the state used almost 23,000 million kilowatt hours of energy, according to the U.S. Energy Information Association. That means residents here could benefit from a smarter energy source that will help them save more dollars on their electricity bills, and solar represents one of those options.
Installing Solar in Minnesota
There are around 20 different solar installers working throughout Minnesota, mostly located in and around Minneapolis. Larger national chains, like SolarCity, are not currently operating in the state; however, if solar takes off here the way that representatives are predicting, then you can bet larger installers will take note, making it easier to access alternative purchasing strategies like solar leases. Additionally, if you’re installing a solar water heater or solar space heater in your home, you should note that it must be approved for operation in Minnesota using the Solar Rating and Certification Corporation’s standards.
Minnesota State Solar Support
Minnesota’s enthusiastic portfolio standard sends a clear message about its solar positioning—in a word, the more solar power, the better. And indeed, the state is just bursting with incentives and local utility rebate programs to choose from. In fact, in this state, even if you aren’t ready to install your own solar power, or don’t think you can afford it, you can still benefit from some of the community solar installations or low interest loan programs the government has in place to bring solar to households of all stripes.
Minnesota State Solar Incentives
Minnesota has about as many incentives to choose from as it does wetlands—which is great in one way, because it means you’ll definitely find a program that will offer you access to solar power, no matter what your living situation is like. However, it can also be tough to parse through thirty different options. Here are some of the most applicable measures and programs Minnesota has implemented for households looking to purchase or install solar power.
Fix-Up Loan: The Minnesota Housing Finance Agency’s Fix-up Loan program provides households low-interest loans for energy efficiency updates, including solar thermal electric systems and solar photovoltaics. The maximum loan amount and repayment term is $20,000 for 120 months. Loans are issued at 6.032% APR, and only households with a net income less than $96,500 are eligible.
Net Metering: Like most states in the U.S., Minnesota offers its residents an incentive called net metering, which credits their solar system’s excess energy returned to the grid against the home’s electricity consumption, allowing homeowners to credit that excess on their utility bill at retail rate or better.
Value of Solar Tariff: Minnesota’s state legislature also offers an alternative to net metering that local utilities may elect to pay their solar customers, known as the value of solar tariff. That tariff amount fluctuates and is set by the state’s Department of Commerce, and is paid to solar residents for their total energy generation in place of metering excess power against usage, as with net metering. Currently no public utilities have chosen to opt for this policy change; however as solar system efficiencies rise, you can expect to see more utilities adopting alternative pricing structures.
Solar-Electric Systems Property Tax Exemption: Solar panels have a tendency to drive up property values, which is great one one hand—your home will be worth more—but not too easy on the wallet when you factor in all those extra property taxes. In Minnesota, however, the state government has opted to waive excess property taxes added by the installation of solar equipment, so you get all the benefit on your valuation without any of the extra expense.
Solar Energy Sales Tax Exemption: Almost all solar devices, including solar PV systems, solar space heaters, solar water heaters, and solar pool heaters qualify for an exemption in sales tax when you purchase them in Minnesota. With the average PV system averaging between $25,000 to $35,000, that’s a significant savings.
Community-Based Energy Development (C-BED) Tariff: This regulatory policy supports community solar installations, by requiring utilities to offer a 20-year power purchasing agreement, also known as a PPA, to buy energy from community-owned solar projects.
Additionally, if you live in Minnesota and decide to erect a solar PV array in your home, you may qualify for a national tax credit administered on your income taxes, as well. The Residential Renewable Energy Tax Credit is worth up to 30 percent of the solar equipment costs, and may be applied for using IRS form 5695 when you file your income taxes.
Minnesota Local Solar Incentives
Some of the most lucrative rebate programs are managed through individual local utilities. In fact, most city energy providers have some sort of incentive in place to reward solar households and encourage the purchase of solar electricity, water heating, and space heating devices. Here are some of those offerings as well:
Rochester Public Utilities Solar Rebate Program: Households served by Rochester Public Utilities that install solar panels on their rooftop are eligible for an incentive through the utility company, worth $0.50 per watt of rated system capacity, with a $5,000 cutoff. Solar water heaters also may qualify for an additional rebate of up to $1,200, at $15 per square foot of collector area.
Austin Utilities Solar Rebate Program: Residential solar PV and solar water heaters installed by Austin Utility companies qualify for a nearly identical rebate of $5,000 for solar PV or $1,200 maximum for solar water heating. Systems must be warranteed in order to receive the credit.
Owatanna Public Utilities Solar Rebate Program: Owatanna residents can apply for their own utility rebate for solar electricity and water heating systems. The maximum return is $5,000 for solar PV or $1,200 for solar water heating.
Marshall Municipal Utilities Solar Thermal Water Heater Rebate Program: ENERGY-STAR certified solar water heaters installed in the Marshall Municipal Utilities service area may be eligible for a rebate through the energy provider worth $20 per square foot of collector area, up to $2,000.
Brainerd Public Utilities Renewable Incentives Program: Customers served by Brainerd Public Utilities can receive an additional tariff that pays them two dollars for every watt of power generated. Systems must comply with the state’s net metering interconnection standards.
Dakota Electric Association Residential Energy Efficiency Rebate Program: If your home is powered by Dakota Electric Association, the utility will pay you for the installation of your new solar system, a rebate worth $0.50 per watt of installed solar, capped at $4,000 total.
Moorhead Public Service Utility Renewable Energy Incentive: If you are served by Moorhead Public Service Utility and install solar panels on your home, you may qualify for a rebate of up to $1,500 per kilowatt of installed solar capacity.
New Ulm Public Utilities Solar Electric Rebate Program: This utility also offers a rebate for its solar customers, worth up to $1 per watt of nameplate capacity, up to $2,000 total.
Stearns Electric Association Residential Energy Efficiency Rebate Program: Solar water heaters installed in the homes of Stearns Electric Association customers qualify for a $200 rebate.
Made in Minnesota Solar PV Incentive Program: Customers of Interstate Power and Light, Minnesota Power, and Otter Tail Power can opt for this incentive, which rewards solar households for the power they generate. Residential incentive amounts vary depending on the make of your panels (you can find more details here); however, systems must be sized less than 40 kilowatts in order to qualify. Xcel Energy customers may not participate in this program and the Xcel Energy Solar*Rewards Program. Solar water heaters qualify for a separate incentive, worth 25 percent of the device cost, up to $2,500.
Xcel Energy Solar*Rewards Program: Xcel Energy customers who have installed residential systems sized at 20 kilowatt or less may be eligible for a production-based rebate that pays these households an annual return of $0.08 per generated kilowatt hour for the first 10 years of the installation’s lifetime. Residents cannot participate in this program if they already receive rebates through the Made in Minnesota Solar PV Incentive Program.
Minnesota Power SolarSense Solar Rebate Program: Minnesota Power customers can receive $20,000 or 60 percent of their installed costs for solar PV arrays, whichever is less, and $2,000 for solar water heaters.