2023 Solar Incentives Guide for Eagan, MN - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Eagan.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2023 and beyond)
- Ways to optimize your solar investment
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What Solar Tax Credits, Incentives, and Rebates are Available in Eagan?
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
Home Energy Loan Program
Renewable Energy Production Incentive
1.0¢/kWh for certain hydro facilities in need of repair
Federal Residential Renewable Energy Tax Credit
Solar incentives help mitigate the cost of installing solar panels on your home. These financial incentives are in place to encourage more people to switch to renewable energy. These incentives can include cash back, upfront discounts or monthly credits towards your utility bill. Some incentives are handled by the federal government, some by the state of Minnesota and some by your utility company, county or municipality. Some solar incentives you might qualify for are:
- Tax Credits: Unlike tax deductions, tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the federal government.
- Net Metering: Net metering is an incentive you can get once your solar system is up and running. If you've signed a net metering agreement with your Eagan utility company, the company will subtract the value of the excess energy produced by your solar system from your utility bill each month. In some areas, this credit is dollar-for-dollar, while in other areas you might be refunded a percentage of the value.
- Tax Exemptions: These may come in the form of property tax exemptions, which allow you to exclude the value of your solar system when paying property tax on your home. You could also look for exemptions on sales tax at the time of purchase.
- Rebates: Rebates, or partial refunds after a purchase, are usually given before any solar tax credits are calculated. Rebates might be offered by your local utility company, by your state or by your county.
Federal Solar Incentives
Federal incentives are the kind of incentives that you are most likely to have heard of. The Federal Solar Investment Tax Credit, or ITC, is the most commonly known federal solar incentive. The ITC provides a tax credit for a predetermined percentage of your solar system's cost.
The ITC was originally for 30% of the cost of installing solar panels, and has fluctuated slightly over the years between 26-30%. The installation date of your solar system will determine what percentage you qualify for. The cost of installation includes the panels themselves as well as the cost of accessories, labor and equipment. There is no maximum amount you can claim. The ITC applies to solar systems installed after January 1, 2006 on your primary or secondary residence. The residence must be in the United States and owned by you.
Your local Eagan solar panel installer can provide more information about the ITC and how it applies to your situation.
The Inflation Reduction Act, passed in August 2022, made some changes to the ITC (as well as renaming it to the Clean Energy Credit). Homeowners can now qualify for a credit equal to 30% of the total solar system installation costs for projects that began after January 1, 2022 and will be finished by the end of 2032. The credit percentage will then begin to decrease yearly until the Clean Energy Credit ends in 2035. The program 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. To best understand how the new Clean Energy Credit applies to you, talk to your local Eagan solar installation expert.
State & Local Solar Incentives
Some solar incentives may be provided by state and local governments. As with federal incentives, these might include rebates, tax credits and more. Some incentives are ongoing, while others are offered for only a limited time. Local solar incentives could come from the Minnesota government, or from your specific county or municipality.
Next Steps for Installing Solar in Eagan
Solar energy use nationwide has significantly increased in the last 15 years, in part due to the proliferation of solar incentives. You may get these incentives from your local utility company, the federal government or the Minnesota government. Getting in touch with your local Eagan solar panel installer is a great first step towards making sure you get all the incentives you qualify for when you switch to solar energy.
EcoWatch's Eagan, MN Solar Incentives FAQs
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