2023 Solar Incentives Guide for Farmington, MN - Tax Credits & Rebates

In this guide, we'll cover the latest solar incentives and rebates available in Farmington.

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.
Get a free quote from one of our trusted Farmington solar installers to see how much you can save.

By EcoWatch Local Advisors

Data Analysis: James Savino

Ranking Methodology: Karsten Neumeister

Updated March 14, 2023

Why you can trust EcoWatch

We work with a panel of solar experts to create unbiased reviews that empower you to make the right choice for your home. No other site has covered renewables as long as us, which means we have more data and insider information than other sites. Our rankings are never affected by revenue or partnerships.

What Solar Tax Credits, Incentives, and Rebates are Available in Farmington?

Xcel Energy - Solar*Rewards Program

Incentive Type:
Performance-Based Incentive
Systems 0.5 kW - 25 kW: $0.005/kWh
Medium-sized Systems 25.1-500 kW: $0.0375/kWh
Large Systems (>500kW): Determined through competitive bid

Solar Energy Sales Tax Exemption

Incentive Type:
Sales Tax Incentive
100% exemption

Wind and Solar-Electric (PV) Systems Exemption

Incentive Type:
Property Tax Incentive
Solar: 100% exemption from real property taxes
Wind: 100% exemption from real and personal property taxes

Wind Energy Sales Tax Exemption

Incentive Type:
Sales Tax Incentive
100% of sales tax

Xcel Energy (Electric and Gas) - Residential Energy Efficiency Rebate Program

Incentive Type:
Rebate Program
Refrigerator/Freezer Recycling: $50
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

Incentive Type:
Rebate Program
Dishwasher: $35
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

Incentive Type:
Grant Program
Varies

Connexus Energy - Residential Energy Efficiency Loan Program

Incentive Type:
Loan Program
$7,500
OR
$20,000

Great River Energy (28 Member Cooperatives) - Energy Wise Residential Efficiency Rebates

Incentive Type:
Rebate Program
Varies by measure and member cooperative offering.

Home Energy Loan Program

Incentive Type:
Loan Program
$20,000

Fix-Up Loan

Incentive Type:
Loan Program
$15,000. Applicants may be eligible for higher loan and term amounts depending on income

Renewable Energy Production Incentive

Incentive Type:
Performance-Based Incentive
1.5¢/kWh
1.0¢/kWh for certain hydro facilities in need of repair

Dakota Electric Association - Residential Energy Efficiency Rebate Program

Incentive Type:
Rebate Program
LEDs: up to $2/bulb
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: $75
Freezer: $75
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

Incentive Type:
Personal Tax Credit
30% federal tax credit for systems placed in service after 12/31/2021 and before 01/01/2033. Good for: solar water heat, solar photovoltaics, biomass, geothermal heat pumps, wind (small), fuel cells using renewable fuels.

Source: https://www.dsireusa.org/


The term "solar incentives" includes a range of financial incentives designed to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. Solar incentives might include cash back, upfront discounts or credit towards your monthly utility bill. Some incentives are offered by the federal government, some by the state of Minnesota and some by your specific utility company, county or municipality. Some solar incentives you might qualify for are:

  • Rebates: Rebates, or cash back after a purchase, are typically given before any solar tax credits are calculated. These rebates might be given by your local utility company, by your state or by your county.
  • Net Metering: Make sure you talk to your Farmington utility company about signing a net metering agreement. This will allow you to get a credit towards your monthly utility bill for the value of excess energy generated by your solar panels. You may receive either a dollar-for-dollar credit or a percentage of the value.
  • Tax Credits: Unlike tax deductions, tax credits reduce, dollar-for-dollar, the amount of income tax that you owe the federal government.
  • Tax Exemptions: Sales tax exemptions are applied at the point of sale for your solar panels. Property tax exemptions let you ignore the added value of your solar system when you're calculating how much property tax you need to pay on your house.

Federal Solar Incentives

Federal incentives are the type of incentives that you are most likely to have some familiarity with. The solar incentive that you're most familiar with is probably the Federal Solar Investment Tax Credit (ITC), which provides a credit on your taxes equal to a specified percentage of your solar system's cost.

The ITC applies to the value of solar panels installed on your primary or secondary residence in the United States. The solar panels have to have been installed after January 1, 2006 on a property owned by you for you to be eligible for the credit. The ITC initially covered 30% of all system installation costs (panels, equipment, labor and accessories), although the covered amount has fluctuated slightly over time between 26-30%. The amount you qualify for will depend on when your solar system was installed. There is no cap on the amount you can claim.

Wondering how the ITC applies to your specific situation? Contact your local Farmington solar panel installation expert to get more information.

In August 2022, the Inflation Reduction Act laid out new provisions for the ITC, now referred to as the Clean Energy Credit. The Clean Energy Credit has increased the current credit up to 30% for solar systems installed between 2022 and 2032. At this point, the percentage will be reduced slightly each year until the program expires in 2035. Starting in 2023, it will also be easier to obtain credits for energy storage systems under the new laws.

Click here to learn more about the new Inflation Reduction Act. Your local Farmington solar panel installation experts can answer any questions you have and explain how the new Clean Energy Credit may apply to you.

State & Local Solar Incentives

There are more than just federal solar incentives; tax credits, rebates and more might also be offered at the state and local level. Some incentives are ongoing, while others may only be available for a limited time. These incentives may be provided by the Minnesota government, or by your county or municipality.

Next Steps for Installing Solar in Farmington

Solar energy use nationwide has gone up significantly in the past 15 years, in part due to the growth in the number of solar incentives. You may get these incentives from your local utility company, the federal government or the Minnesota government. Contact your local solar panel installation expert today to discover more about the various programs and to save the most money possible on solar panels for your Farmington home.

Best National Provider

SunPower

★★★★★
5.0

  • Most efficient panels on the market
  • National coverage
  • Cradle to Cradle sustainability certification
  • Great warranty coverage
  • Expensive
  • Customer service varies by local dealer

Best Technology

Tesla Energy

★★★★★
4.5

  • 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

Palmetto Solar

★★★★★
4.0

  • Expansive service area
  • Makes charitable contributions
  • Certified B Corp
  • No leases or PPAs
  • Quality of installation may vary by location

EcoWatch's Farmington, MN Solar Incentives FAQs

What if I want to add a solar system to a vacation home, rental property or commercial property? Will I still qualify for incentives?

While we recommend talking to your local solar installer and/or tax professional to fully understand what solar incentives apply to you, many incentives will apply to a second home, provided that it is in the United States and owned by you. There may be other incentives available for commercial properties specifically, depending on the details.

How do I know if I qualify for solar incentives?

Typically, solar incentives apply to:

  1. a new solar system
  2. installed on property you own
  3. within the U.S.
  4. within the date range specified by a particular incentive.

Specific incentives, including ones handled by the Minnesota government or by your county/municipality, may have additional qualifications. Talk to your local Farmington solar installer to find out what incentives your project may qualify for.

What are some of the environmental benefits of switching to solar?

You can decrease your carbon footprint by 450 pounds of CO2 annually when you switch to solar panels. This adds up to around 9,000 pounds over 20 years. In addition, solar power is a renewable energy source, meaning that switching your home over lessens the drain on our planet's resources.

Can I apply for incentives both towards the up-front cost of solar panels, and later as reimbursement?

The order that incentives will be applied in could vary depending on which incentives you are eligible for but usually yes, you can claim multiple types of incentives for your solar project. Check with your solar installer or a local tax professional to be sure you are claiming all of the incentives you qualify for and applying them in the correct order.

Can I use solar and another type of renewable energy in combination to power my home?

Yes, you can use multiple types of renewable energy to power your home, such as a combination of geothermal and solar. You can also use both renewable energy sources and a backup source of non-renewable energy. Be sure to discuss the details of your plan with your local Farmington solar installation expert, so that you understand what you'll need and what kinds of incentives you might or might not qualify for.

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.

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