2025 Solar Incentives Guide for Austin, MN - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Austin.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2024 and beyond)
- Ways to optimize your solar investment
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What Solar Tax Credits, Incentives, and Rebates are Available in Austin?
Xcel Energy - Solar*Rewards Program
Medium-sized Systems 25.1-500 kW: $0.0375/kWh
Large Systems (>500kW): Determined through competitive bid
Wind and Solar-Electric (PV) Systems Exemption
Wind: 100% exemption from real and personal property taxes
Wind Energy Sales Tax Exemption
Xcel Energy (Electric and Gas) - Residential Energy Efficiency Rebate Program
Natural Gas Furnace Existing Home: $200-$400
Natural Gas Furnace New Construction: $100-$200
Natural Gas Hot Water Boiler: $100-$400
ECM Furnace: $100
Central AC: $150-$450
Tank Water Heater: $75-$500
Tankless Water Heater: $250
Attic/Wall Insulation: 30% of project cost
Air Sealing: $150-$200
Furnaces: $200-$425
Boilers: $125-$400
ECM Motor Furnace Fan: $125
Programmable Thermostat: $10
Heat Pumps: $175-$475
Water Heating: $100-$250
Clothes Washer: $10
Refrigerator: $15
Ground Source Heat Pump: $150/ton
Brainerd Public Utilities - Residential Energy Efficiency Rebate Program
Clothes Washer: $35
Electric Clothes Dryer: $35
Refrigerator: $35
Freezer: $35
Dehumidifier: $20
Room/Window A/C: $35
High Efficiency Electric Water Heater: $35
Central A/C Tune-Up: $35
Central A/C: $200-$350
Mini Split/Ductless A/C: $250
ECM Replacement Motor: $100
Furnaces: $200-$375
Heat Pump Water Heater: $250
Air Source Heat Pump: $250
Geothermal Heat Pump: $100/ton
Xcel Energy - Renewable Development Fund Grants
Connexus Energy - Residential Energy Efficiency Loan Program
OR
$20,000
Home Energy Loan Program
Fix-Up Loan
Renewable Energy Production Incentive
1.0¢/kWh for certain hydro facilities in need of repair
Austin Utilities - Solar Rebate Program
Solar Water Heating: $15 per square foot net aperture
Austin Utilities (Gas and Electric) - Residential Conserve and Save Rebate Program
Clothes Washer: $25-$150
Dehumidifiers: $15-$25
Dishwasher: $25-$40
Refrigerators/Freezers: $25
Room AC: $25
Bonus Recycling Rebates: up to $15
LED Lighting: 50% of bulb or fixture cost
Central AC Clean and Tune: $25
Air Source and Water Source Heat Pumps: $100 and up
Geothermal Heat Pumps: $200/ton + $150/EER above minimum efficiency requirement + $250/desuperheater
Furnace Fan Motor: $50-$125
Natural Gas Rebates
Furnaces: $100-$400
Boiler: $100-$300
Clothes Dryers: $50
Clothes Washers: $25-$150
Water Heaters - Tank: $50-$150
Water Heaters - Instantaneous: $200-$250
Programmable Thermostats: $25-$75
Attic Insulation: $125-$350
Electronic Ignition hearth: $75
Furnace/Boiler Clean and Tune: $25
Doors: $25
Water Rebates
Clothes Washer: $25 - $150
High-Efficiency Toilet: $25
Rain Barrels: $10
Weather-Based Irrigation Controls: $75WaterSense Showerhead: $25
Federal Residential Renewable Energy Tax Credit
Source: https://www.dsireusa.org/
The term "solar incentives" includes a wide range of financial incentives put in place to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. The incentives might include upfront discounts, cash back or monthly credits towards your utility bill. Some incentives are provided by the federal government, some by the state of Minnesota and some by your utility company, county or municipality. Some broad categories of solar incentives include:
- Tax Exemptions: Sales tax exemptions are applied at the point of sale for your solar panels. Property tax exemptions allow you to exclude the value added by your solar system when you calculate how much property tax you need to pay on your house.
- Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the federal government. (A tax credit is different from a tax deduction.)
- Rebates: Rebates, or cash back after a purchase, are typically given prior to any solar tax credits being calculated. These rebates might be given by your local utility company, by your state or by your county.
- Net Metering: Net metering factors in after your solar panels are up and running. If you have a net metering agreement with your Austin utility company, they will subtract the value of the excess energy your solar system produces from your utility bill each month. In some locations, this is a dollar-for-dollar credit, while in others you might make back a percentage of the value.
Federal Solar Incentives
When thinking about solar incentives, you likely think of federal incentives first. You might have heard of the Federal Solar Investment Tax Credit, or ITC. This incentive is a tax credit equal to a specified percentage of the money you spend on your solar system.
The ITC applies to the total cost of solar panel installation, including the panels themselves as well as accessories, labor and equipment. This credit can be claimed for panels installed after January 1, 2006, on a primary or secondary residence that you own, as long as it is located in the United States. From its original value of 30% of the total cost, the credit has fluctuated slightly between 26-30%, and you may qualify for varying percentages depending on when your project was completed. There is no maximum claim amount.
Curious how the ITC might apply to your specific situation? Get in touch with your local Austin solar panel installation expert to get more information.
In August 2022, the ITC (now referred to as the Clean Energy Credit) was bolstered by the passage of the Inflation Reduction Act. The new Clean Energy Credit extends until 2035. American homeowners are now eligible for a 30% credit for solar systems installed between January 1, 2022, and December 31, 2032. The total credit will then be decreased by a few percentage points every year until it expires. Beginning in 2023, it will also be easier to obtain credits for energy storage systems under this new program.
Click here to learn more about the new Inflation Reduction Act. The best way to fully understand how the new Clean Energy Credit might apply to you is to get in touch with your local Austin solar panel installation expert.
State & Local Solar Incentives
Tax credits, rebates and more can be claimed at multiple levels. In addition to federal solar incentives, there are often state and local ones as well. Certain incentives are ongoing, while others are offered for only a limited time. Local solar incentives might come from the Minnesota government, or from your specific county or municipality.
Next Steps for Installing Solar in Austin
You can qualify for solar incentives from the federal government and the Minnesota government, as well as from your local utility company. Growing availability of solar initiatives in the past 15 years has helped increase solar adoption nationwide. Your local Austin solar panel installation expert can provide you with more details about which incentives you may qualify for, and get you on track to switch to renewable energy today.
EcoWatch's Austin, MN Solar Incentives FAQs
How much can I save annually on my electric bill if I install solar panels on my house in Austin?
After adding solar panels to your house in Austin, you can expect to save about $971.43 per year, or about $18,457.08 over 20 years.
What are the environmental benefits of switching to solar?
Solar energy is a renewable energy source — by switching where you get your energy, you can help lessen the strain on our planet's resources. A solar system can also lower the CO2 emissions from your home by 450 pounds yearly, or around 9,000 pounds over 20 years.
If I switch my appliances out for ones that can use solar energy, are there credits I can claim?
With the passage of the new Inflation Reduction Act, there are a number of new financial incentives to encourage you to make eco-friendly improvements to your home. More details on these incentives, including information about incentives for purchasing new appliances, can be found here.
Can I claim incentives both towards the initial cost of solar panels, and later as reimbursement?
Yes, you can receive both rebates and tax credits towards the cost of your solar panels. Depending on which incentives you are claiming, they may apply in a different order. Be sure to speak with your solar installer or a local tax professional to ensure that you are claiming incentives correctly and that you're getting the most money possible.
Can I receive any incentives when I add solar panels to a vacation home, rental property or commercial property?
Many solar incentives apply to a property you own that is located within the United States; most secondary residences will fall under this distinction. There may be other solar incentives available for commercial properties, depending on the details. We recommend talking to your local solar installer and/or tax professional to better understand what incentives apply to your specific situation.
Our goal is to reach as many people as we can with sensible solutions like solar energy. Our team of full-time local researchers collects solar price and installation data for every city in America then compiles it to create these digestible city guides. If you want to read our solar expert's opinion on the top solar companies featured here, follow this link.
Solar incentive research was conducted by Melissa Smith and Karsten Neumeister. Local data analysis was conducted by James Savino. See something we missed or could do better? Email the editor.