Minnesota solar incentives

No. Minnesota has no state income tax credit for residential solar. It has two tax exemptions, which are often confused with a credit: a solar energy system is exempt from Minnesota sales tax under Minn. Stat. § 297A.67, subd. 29, and is exempt personal property for property tax purposes under § 272.02, subd. 24. Direct payments come from utilities — Xcel's Solar*Rewards and Minnesota Power's SolarSense — and from the Department of Commerce battery incentive, not from your state return.

$0.03 per kilowatt-hour produced, paid annually for ten years, in exchange for the renewable energy credits your system generates. Income-qualified customers get the same $0.03/kWh plus a $3.00-per-watt upfront payment from a separate budget with its own waitlist. Systems are capped at 120% of the previous twelve months of consumption at the address. The 2026 program opened January 7, 2026, and the 2025 waitlist did not carry over.

Yes, but it is far more restricted than most guides describe. SolarSense now requires household income below 150% of area median income, runs a five-day application window (March 1 to March 5 in 2026), and awards by lottery against an annual budget of $87,675. The rebate itself is the system's estimated annual production from NREL's PVWatts multiplied by $0.27/kWh, capped at $5,000 or 60% of installed cost, whichever is less. You must own both the PV system and the property.

Yes, and which one you get depends on your utility. Outside Xcel territory the Minnesota Department of Commerce pays $250 per kilowatt-hour of battery capacity up to $7,000. Inside Xcel territory the incentive is $175 per kilowatt-hour, or $370 if you are income-qualified, capped at $5,000. Both require the battery to be paired with solar at the same site and cap eligible capacity at 50 kWh. The Commerce program runs first come, first served until funds run out or June 30, 2027.

No. Minn. Stat. § 272.02, subd. 24 exempts personal property consisting of solar energy generating systems from property tax. Separately, § 272.0295 imposes a production tax of $1.20 per megawatt-hour on solar generating systems, but exempts any system of one megawatt alternating current or less — which covers every residential system by a wide margin. The exemption covers the equipment, not the land underneath it.

No. Minn. Stat. § 297A.67, subd. 29 states in full that "A solar energy system, as defined in section 216C.06, subdivision 17, is exempt." There is no application, cap, or expiration. On a $20,000 installation that is roughly $1,375 saved at Minnesota's 6.875% state rate, before any local option sales tax.

Yes, at full retail rate for systems under 40 kilowatts — which is essentially every home system. Under Minn. Stat. § 216B.164, subd. 3(d) a qualifying facility below 40 kW may elect compensation at the average retail utility energy rate. Above 40 kW at an investor-owned utility, exports are paid at avoided cost instead, or carried as kilowatt-hour credits cashed out annually. Watch one detail if you are with a cooperative or municipal utility: the kilowatt-hour credit option there cancels unused credits at the end of the calendar year with no compensation.

No. Minnesota has no SREC market a homeowner can sell into. The state's solar energy standard requires public utilities to generate 1.5 percent of retail sales from solar, with at least 10 percent of that from systems of 40 kW or less, but utilities meet it through their own programs rather than a tradeable compliance market. In practice the renewable energy credits from a Minnesota home system go to the utility as the price of the production incentive — that is what the $0.03/kWh from Solar*Rewards buys.

Yes, through a community solar garden. You subscribe to a share of a nearby garden through its operator and take your share of the output as a credit on your Xcel bill. Under the current state program gardens are capped at 5 MW, need at least 25 subscribers per megawatt, and no single subscriber may hold more than a 40 percent interest; at least 30 percent of a garden's capacity must go to low- and moderate-income subscribers. A new garden can take up to two years to reach commercial operation, so this is not a fast route.

Since July 1, 2023, a company contracting with a Minnesota homeowner to install rooftop solar must hold a residential building contractor or remodeler license from the Department of Labor and Industry — and the electrical work must be performed by a Minnesota-licensed electrical contractor. That is two separate licenses. The contractor license is what gives you access to the Contractor Recovery Fund if the company goes bankrupt part-way through your project, which is a reason to verify it in DLI's own lookup rather than trusting a badge on a website.

It now depends heavily on your utility, which was not true before. An Xcel customer keeps a production incentive worth roughly $2,700 over ten years on a 9,000 kWh-a-year system, plus retail net metering and both tax exemptions — and none of that requires federal tax liability to be useful, which the repealed federal credit always did. A Minnesota Power customer above 150% of area median income now gets no utility incentive at all. Everyone still gets the sales and property tax exemptions and net metering. Run the numbers on your own utility rather than on a national average.