2023 Solar Incentives Guide for Cottage Grove, MN - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Cottage Grove.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2023 and beyond)
- Ways to optimize your solar investment
Solar installers are experts in maximizing your solar tax credits and rebates.
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By EcoWatch Local Advisors
Data Analysis: James Savino
Ranking Methodology: Karsten Neumeister
Updated March 14, 2023
Why you can trust EcoWatch
What Solar Tax Credits, Incentives, and Rebates are Available in Cottage Grove?
Xcel Energy - Solar*Rewards Program
Medium-sized Systems 25.1-500 kW: $0.0375/kWh
Large Systems (>500kW): Determined through competitive bid
Solar Energy Sales Tax Exemption
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
ECM Motor Furnace Fan: $125
Programmable Thermostat: $10
Heat Pumps: $175-$475
Water Heating: $100-$250
Clothes Washer: $10
Ground Source Heat Pump: $150/ton
Brainerd Public Utilities - Residential Energy Efficiency Rebate Program
Clothes Washer: $35
Electric Clothes Dryer: $35
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
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
Great River Energy (28 Member Cooperatives) - Energy Wise Residential Efficiency Rebates
Home Energy Loan Program
Renewable Energy Production Incentive
1.0¢/kWh for certain hydro facilities in need of repair
Dakota Electric Association - Residential Energy Efficiency Rebate Program
LED Yard Light: $30/fixture
Clothes Dryer: $25
Central AC/Heat Pump Tune-Up: $25
Central A/C Installation: $280- $330 depending on SEER rating
Air-Source Heat Pump Installation: $480- $630 depending on SEER rating
Ductless Air-Source Heat Pump: $300 - $500
Geothermal Heat Pump: $400/ton
Electric Thermal Storage Heat: $50/kW
Electric Water Heater: Up to $400
Heat Pump Water Heater: up to $400
Refrigerator/Freezer Recycling: $75
ECM Furnace Motor: $100
Pool Pump Variable Speed Motor: $200
Air-Source Heat Pump Pool Heater: $400
Solar Panel Installation: $0.50/watt of installed solar, not to exceed $4,000
Load Management: Varies
Federal Residential Renewable Energy Tax Credit
The term "solar incentives" broadly refers to financial incentives designed to encourage the adoption and use renewable energy by making installing and using solar panels more affordable. These incentives could include cash back, upfront discounts or monthly credits towards your utility bill. Some incentives are given 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: These can come in the form of property tax exemptions, which let you exclude the value of your solar system when paying taxes on your house. They may also include exemptions on sales tax at the time of purchase.
- Net Metering: You may be able to sign a net metering agreement with your Cottage Grove utility company that will apply to all or a percentage of the excess electricity your solar panels generate. Your utility company will then subtract this value from your utility bill each month.
- Rebates: A solar rebate is a partial refund after the purchase of your solar panels. These may be offered by your local utility company, your county or your state. The rebates are usually applied before tax credits are calculated.
- Tax Credits: Tax credits reduce, dollar-for-dollar, the total amount of tax you owe the government. These differ from tax deductions.
Federal Solar Incentives
When you think about solar incentives, you probably think of federal incentives first. The solar incentive that you may be most familiar with is the Federal Solar Investment Tax Credit (ITC), which gives you a credit on your taxes equal to a predetermined percentage of your solar system's cost.
The ITC covers solar systems installed after January 1, 2006 and allows you to deduct from your taxes a percentage of the total cost of solar panels, accessories, labor and equipment. This credit can apply towards a solar panel system installed on a primary or secondary residence in the United States that you own. Originally, you could claim 30% of the total cost, although certain projects may qualify for only 26%, depending on the details. There is no maximum claim amount.
To know exactly how much money the ITC could save you, talk to your local Cottage Grove solar panel installation expert.
In August 2022, the Inflation Reduction Act made revisions to the ITC, now dubbed the Clean Energy Credit. The Clean Energy Credit bolsters the current credit, increasing it up to 30% for solar installations undertaken between January 1, 2022 and December 31, 2032. After this, the credit percentage will decrease slightly each year until the end of the program in 2035. The expansion also makes it easier to get credit for energy storage systems, starting in 2023.
More information about the new Inflation Reduction Act can be found here. The easiest way to learn more about how the new Clean Energy Credit will apply to you is to reach out to your local Cottage Grove solar panel company with your questions.
State & Local Solar Incentives
Some solar incentives are often also offered at the local or state level. As with federal incentives, these can include rebates, tax credits and more. Certain incentives are offered for only a limited time, while others are ongoing. These local incentives could come from the Minnesota government, or from your specific county or municipality.
Next Steps for Installing Solar in Cottage Grove
Nationwide solar energy use has gone up tremendously in the past 15 years, in part due to the growth in the number of solar incentives. You can obtain these incentives from the Minnesota government, the federal government or your local utility company. When you're ready to switch over to solar energy, reaching out to your local Cottage Grove solar panel installation expert is an excellent place to start.
- Price-match guarantee
- Sleek, efficient, and durable solar panels
- Best solar battery on the market
- Some reported issues with customer service
- Customer service varies by local dealer
Best Social Impact
- Expansive service area
- Makes charitable contributions
- Certified B Corp
- No leases or PPAs
- Quality of installation may vary by location
EcoWatch's Cottage Grove, MN Solar Incentives FAQs
How much will solar panels save me on my electric bill in Cottage Grove annually?
Once you add solar panels to your house in Cottage Grove, you can expect to save approximately $970.40 per year, or approximately $18,437.63 over the next 20 years.
What are the highest-rated solar panel installation companies near me?
To find the right solar panel installer for you, check out our guide to Cottage Grove's top solar panel companies.
What are some environmental benefits of adding solar panels to my home?
Solar energy is renewable — by switching where you get your energy, you help lessen the strain on our planet's resources. A solar system can also reduce your home's CO2 emissions by 450 pounds annually, or around 9,000 pounds over 20 years.
How long until the federal solar tax credit ends?
The federal solar tax credit, formerly known as the ITC and now titled the Clean Energy Credit, is set to end January 1, 2035. The current 30% credit will end in 2032, replaced by a 26% credit in 2033 and a 22% credit in 2034.
If I change out my appliances for ones that can utilize solar energy, are there benefits I can claim?
The new Inflation Reduction Act introduces a number of incentives designed to reward homeowners for making eco-friendly upgrades. Some of these incentives include rebates and tax credits for installing new electric appliances. You can find more details about these incentives here.
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.