State solar guide
Minnesota has strong solar fundamentals in 2026. The federal residential credit expired December 31, 2025, but state incentives and net-metering rules still support solid payback timelines for qualified homeowners.
Sources: ElectricChoice June 2026 | NREL PVWatts (statewide range; Minneapolis area approximately 4.61 peak sun hours per day) | EnergySage May 2026 | Federal residential credit: Section 25D expired December 31, 2025, H.R.1 (One Big Beautiful Bill Act).
Net metering
Minnesota offers full retail net metering for systems up to 40 kW. Credits offset future electricity bills and roll over month to month. At year-end, public utility customers receive payment at avoided-cost rate for unused credits; cooperative and municipal utility customers may forfeit unused credits. Xcel Energy territory provides the best economics due to additional Solar Rewards performance incentives layered on top of net metering.
Xcel Energy is the largest Minnesota IOU and offers Solar Rewards ($0.03 per kWh for 10 years for income-standard customers) on top of full retail net metering. Minnesota Power serves northeastern Minnesota. Great Plains Energy (formerly Otter Tail Power) serves western Minnesota. Electric cooperatives set their own credit policies. Source: iSolarMN, Xcel Energy Solar Rewards program documentation, June 2026.
Program: Minnesota Net Metering (full retail up to 40 kW). Last verified: June 2, 2026. DSIRE source (opens in new tab).
Verify with your utility
Net-metering rules change by utility and program cycle. Confirm current export credit rates and eligibility with your specific Minnesota utility before contracting. Current program details at DSIRE (opens in new tab).
State incentive stack
The federal residential credit expired December 31, 2025. The programs below are what remains for Minnesota homeowners. Amounts and availability change; every program is date-stamped and linked to its DSIRE source.
Federal residential solar credit (Section 25D): expired. The Section 25D residential investment tax credit expired December 31, 2025. The residential credit rate is 0%. State and local incentives below may still significantly reduce your net system cost. Commercial systems still qualify for Section 48E (30%).
| Program | Benefit | Eligibility | Status | Source |
|---|---|---|---|---|
| Xcel Energy Utility rebate / export credit active - verify current enrollment and funding availability | See description (as of 2026-06-02) Solar Rewards Program: $0.03 per kWh production incentive for 10 years on all solar generated (income-standard customers). Income-qualified customers: upfront incentive of $3.00 per watt up to 6 kW. Battery storage incentive: $175 per kWh up to $5,000 ($370 per kWh for income-qualified). Source: Xcel Energy Solar Rewards program documentation, June 2026. | Xcel Energy customers. Verify eligibility directly with your utility. | Active | DSIRE (opens in new tab) |
| Minnesota Solar Property Tax Exemption Property tax exemption Confirm exemption filing requirements with your county assessor. | Exemption on solar-added home value (amount varies by local tax rate and system size) Minnesota exempts solar installations from property tax assessment increases under Minnesota Statute 272.0279. Solar-added home value is fully exempt from property tax statewide. | Minnesota residential property owners with qualifying solar installations. | Active | DSIRE (opens in new tab) |
| Minnesota Solar Sales Tax Exemption Sales tax exemption Verify that your specific installation and municipality qualify for the Minnesota sales tax exemption. | State sales tax savings on system equipment and installation All solar system components including panels, inverters, and mounting hardware are exempt from Minnesota's 6.875 percent sales tax. Approximate savings: $2,000 on a typical 8 to 10 kW system. | Minnesota homeowners purchasing qualifying solar energy systems. | Active | DSIRE (opens in new tab) |
Data last verified June 2, 2026. Incentive programs change; verify current amounts and availability at dsireusa.org (opens in new tab) before committing to a project.
Battery storage incentives in Minnesota
Minnesota offers two battery storage incentives stacked independently. The Minnesota Department of Commerce provides $250 per kWh of battery capacity up to $7,000 for income-standard customers ($1,000 per kWh up to a higher cap for income-qualified customers). Xcel Energy additionally offers $175 per kWh up to $5,000 for its residential customers ($370 per kWh for income-qualified). Both programs are available statewide (Xcel territory only for the Xcel incentive). Battery storage improves economics by shifting self-consumption and capturing more of the full-retail net metering credit. Source: Minnesota Department of Commerce, Xcel Energy Solar Rewards program documentation, June 2026.
Savings example
This example uses real Minnesota market data. No federal residential credit is applied. Figures are illustrative; your in-home assessment uses your actual utility bills and the current rate schedule for your specific utility.
Annual production estimated at approximately 11,000 kWh for an 8 kW system at 4.61 peak sun hours. Full retail net metering: assumes 65 percent self-consumption at 15.39 cents per kWh; remaining 35 percent exported at 15.39 cents per kWh (full retail). Solar Rewards $0.03 per kWh production incentive applied to all generated kWh adds approximately $330 per year for Xcel customers. Utility rate escalation at 3 percent annually. Federal residential credit: $0 (expired). Figures are illustrative; your in-home assessment will use your actual bills and current program terms.
Minnesota homeowner savings example (illustrative)
Illustrative example. Federal residential credit: $0 (Section 25D expired December 31, 2025). Your estimate will use your actual utility bills and current rate schedule.
Permitting
Minnesota does not have a statewide solar permit fee cap. Permit requirements vary by municipality and county. Minneapolis, St. Paul, Rochester, and Duluth each have separate building departments. Typical residential solar permit approval takes 2 to 6 weeks. SolarAPP+ adoption in Minnesota is limited. Contract to energization typically runs 10 to 16 weeks statewide.
Xcel Energy interconnection review is separate from the building permit for Xcel customers. Non-Xcel customers should verify interconnection requirements with their specific cooperative or municipal utility. Community solar gardens are an alternative for renters or those with roof limitations.
Commercial solar in Minnesota
The commercial solar credit (Section 48E, 30 percent) remains available for qualifying commercial projects. Construction must begin by July 4, 2026 to qualify for the full placed-in-service window. Combined with MACRS accelerated depreciation and 100 percent first-year bonus depreciation, the combined first-year federal benefit can reach 45 to 55 percent of project cost for many Minnesota business owners. Direct Pay is also available for nonprofits, municipalities, and other tax-exempt entities.
Commercial solar overviewCommercial solar projects must begin construction by July 4, 2026 to qualify for the 30 percent Section 48E federal tax credit. After that date, the system must be placed in service by December 31, 2027.
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