See how much it will cost to install solar panels for your home in Minnesota
Our estimates used by
Solar power in Minnesota
Last fact-checked on April 19, 2023, by Catherine Lane
Minnesota may not be the sunniest state in the U.S., and it has relatively inexpensive electric rates, but utilities offer a variety of rebates that make going solar an affordable option.
Those rebates, combined with the 30% federal tax credit and the state’s mandatory net metering law, make going solar a solid investment in Minnesota.
Cheap power paired with snowy weather draws out the payback period for a solar system to about 8 to 10 years in the North Star State. Fortunately, after that, 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!
Compare solar quotes from the top solar companies in Minnesota
Minnesota solar power facts
$2.68 watt
Average cost: 5kW solar power system
?7 Years 10 Months
Average payback time
$54,626
Average lifetime savings
?5¢ kWh
Levelized cost of solar energy
21¢ kWh
If you don't get solar
?15,232 kWh
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.
3
Solar companies in Minnesota that provide pricing through the Solar-Estimate marketplace.
How much can solar panels save you in Minnesota
Average total cost of solar panel installation in Minnesota
| System Size | Cash purchase After 30% solar tax credit |
Financed purchase After 30% solar tax credit |
|---|---|---|
| 3kw | $5,859 | $6,328 |
| 4kw | $7,644 | $8,256 |
| 5kw | $9,380 | $10,130 |
| 6kw | $11,004 | $11,884 |
| 7kw | $12,593 | $13,600 |
| 8kw | $14,056 | $15,180 |
| 9kw | $15,498 | $16,738 |
| 10kw | $16,800 | $18,144 |
How much do solar panels cost in Minnesota?
$2.68 per watt
Cash purchased solar system
Before 26% solar tax credit
$2.97 per watt
Financed solar system
Before 26% solar tax credit
$0.0¢ /kWh
Lease/PPA
Ave 15 year term, 2.5% price escalator
What are the pros and cons of installing solar panels in Minnesota?
The advantage of installing solar panels in Minnesota is the great utility incentives. Also, the state’s net metering law required utilities to offer full retail credit for excess solar generation. Since Minnesota has a solar carve out in its renewable portfolio standard, utilities are mandated 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 30% federal tax credit as well.
The main disadvantage of installing solar panels in Minnesota is that the state doesn’t get a ton of sunshine compared to other states, meaning a solar system here will produce less energy 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 solar system a bit longer.
Enter your details to calculate the potential costs and savings you can see from installing solar panels for your home.
Best solar companies in Minnesota
Compare solar quotes from the top solar companies in Minnesota
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:
1,150kWh
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 zip code.
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 electricity sales minus the yearly 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 a percentage of their electricity from renewable sources. This percentage steadily increases, reaching 20% in 2020, and is set to reach 25% in 2025. The goal is to reach 55% renewable generation by 2035.
To meet these requirements, utilities can obtain renewable energy credits (RECs), which represent the environmental benefits of producing energy through renewable sources. A registered solar system produces 1 REC for every megawatt-hour (MWh) of solar electricity generated. In response, some utility companies created rebate programs to pay their solar customers in exchange for the RECs their customers’ systems produce.
Check your utility’s website to find out what solar rebate programs are available.
Xcel Energy’s Solar*Rewards Program
Customers of Xcel Energy can enroll in the Solar*Rewards program. If you meet eligibility requirements, annual payments are made to the solar customer in exchange for Renewable Energy Credits (RECs). This is a performance-based incentive and pays $0.02 per kWh of solar energy produced.
Tax exemptions
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 aims to match funds for property owners who make property updates that lead to greater energy efficiency and pollution reduction.
This program targets buildings in designated “Green Zones,” which fall into the income-qualified housing category. For example, those enrolled in the 4d Affordable Housing Incentive are in this category. The incentive rate is different based on each type:
- Base category: $0.20/kWh
- Environmental justice: $0.35/kWh
- Income-qualified housing: $0.40/kWh
Funds up to $50,000 are available for each category for solar projects and up to $75,000 for other energy-efficient projects. For more 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.
Minnesota Solar Calculator
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 you 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.
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:
| Incentive Name | Eligibility | Type |
|---|---|---|
| Residential Clean Energy Tax Credit | Federal | Personal Tax Credit |
| Net Metering | State | Net Metering |
| Wind and Solar-Electric (PV) Systems Property Tax Exemption | State | Property Tax Exemption |
| Solar Energy Sales Tax Exemption | State | Sales Tax Exemption |
| 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 |
| Dakota Electric Association - EnergyWise Solar Installation Rebate | Utility | Performance Based Incentive |
| Shakopee Public Utilties - Solar Electric Rebate | Utility | Rebate Program |
| Xcel Energy's Solar*Rewards Program | Utility | Performance-Based Incentive |
| Xcel Energy Solar*Rewards Income Qualified incentive | Utility | Low-Income Program |
Find your local rebates and incentives
Your city may have further incentives to offer. Please keep in mind that the best source of up-to-date information on incentives is the solar installers who specialize in your area.
