Solar Incentives
Minnesota solar incentives and rebates give homeowners support when installing a new system. By taking advantage of these solar savings opportunities, you can reduce costs and maximize your return on investment.
Xcel Energy Solar Rewards Program
Xcel Energy’s Solar Rewards is a 10-year incentivized program that provides annual payments based on your energy system’s production. If you take part in this opportunity you will receive Renewable Energy Credits (RECs) in exchange for the excess power your system generates and sends back to the grid.
Incentive Information For 2025
Customer receives $0.03 per kilowatt-hour (kWh) of energy produced, no matter if you use that energy or not.
This amount gets deducted from your monthly energy bill in the form of bill credits, further lowering your monthly energy expenses.
[based on availability]
Upfront Payment: $3.00 per Watt installed, paid within 60 days post installation
Production Incentive: $0.03 per kWh produced, no matter if that energy is consumed or not.
Reduced from your monthly bill in the form of bill credits.
Upfront Payment: $1.00 per Watt installed, paid within 60 days post installation
Production Incentive: $0.02 per kWh produced, no matter if that energy is consumed or not.
Reduced from your monthly bill in the form of bill credits.
Upfront Payment: $0.50 per Watt installed, paid within 60 days post installation
Production Incentive: $0.02 per kWh produced, no matter if that energy is consumed or not.
Reduced from your monthly bill in the form of bill credits.
Eligibility Criteria
- Must be an Xcel Energy customer.
- The system should generate no more than 120% of your historical energy usage when under ideal test conditions.
- Property ownership where the solar system is installed.
- Meet Xcel’s personal liability insurance requirement of $300,000.
It's advisable to apply for the Solar*Rewards program before installing a new solar energy system, as funds are limited and allocated on a first-come, first-served basis.
Net Metering In Minnesota
Net metering is a solar incentive that allows customers to send excess electricity back to the grid in exchange for energy credits. These credits can be used to offset future electricity bills. This applies for systems up to 40kW in size!
Extra energy your system produces gets sent back to the grid and your energy provider credits your account.
You will receive full retail value for energy sent to the grid, this will be the same rate as you pay for electricity!
If you produce more energy than you use in a month, credits roll over to the next billing cycle.
At the end of the year, excess credits may be paid out at a lower “avoided cost” rate.
State Sales Tax Exemption
Minnesota exempts solar energy systems from state sales tax, providing an additional 6.875% savings on the total system cost.
For the average homeowner, this could result in savings of $1,000 or more.
Commercial Solar Incentives & Rebates
Modified Accelerated Cost Recovery System [MACRS]
This allows businesses to depreciate the cost of the system over five years, reducing taxable income and providing significant tax savings.
Thanks to bonus depreciation, businesses can also deduct 100% of the system’s cost in the first year (through 2026), providing an even greater tax benefit.
Xcel Energy offers a Solar*Rewards program for commercial systems, providing production-based incentives(PBI).
Businesses can earn $0.06 per kWh of solar energy generated for the first 10 years.
This creates ongoing savings and a faster return on investment.
Commercial solar systems in Minnesota can participate in net metering, which credits businesses for excess electricity sent back to the grid.
This helps offset electricity bills and reduces overall energy costs.
Systems up to 1 MW(MegaWatt) qualify for net metering.
Minnesota Property Assessed Clean Energy Financing
Minnesota offers Property Assessed Clean Energy (PACE) financing, which helps businesses finance solar installations with low interest, long term loans.
Re-payments are made through property tax assessments, making it a flexible and affordable financing option.
Sales & Property Tax Exemption
Commercial solar systems in Minnesota are exempt from state sales tax, which reduces the overall installation cost.
This exemption applies to the equipment, labor, and installation services.
Although solar panels increase a property’s value, they are exempt from property tax assessments in Minnesota, meaning businesses can enjoy the added value without higher property taxes.