2023 Solar Incentives Guide for Litchfield, MN - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Litchfield.
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 Litchfield?
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
Litchfield Public Utilities - Residential Energy Efficiency Rebate Program
Light Fixtures: 50% of cost
Refrigerators/Freezers: $25 plus an additional $50 to pay for recycling
Clothes Washers: $50-$100
Dehumidifiers: $15 (no recycling) or $25-$40 (recycling)
Efficient Furnace Fan Motors: $50-$125
Room A/C: $25 plus an additional $25 for recycling
Central A/C and Air Source Heat Pumps: $100-$200
Central A/C and Air Source Heat Pump Tune-Up: $35
Ground Source Heat Pumps: $200/ton plus $25/ton for each 1 EER above minimum qualifying efficiency
Federal Residential Renewable Energy Tax Credit
Solar incentives are meant to help mitigate the cost of installing solar panels on your home. Financial incentives like these are in place to encourage more Americans to switch their home over to renewable energy. Solar incentives can include cash back, upfront discounts or monthly credits towards your utility bill. Some incentives are given by the federal government, some by the Minnesota government and some by your specific utility company, county or municipality. You might qualify for any of the following types of solar incentives:
- Tax Exemptions: Sales tax exemptions are applied at the time of purchase for your solar panels. Property tax exemptions let you ignore the value that your solar panels add when you're calculating how much property tax you need to pay on your house.
- Tax Credits: Tax credits reduce, dollar-for-dollar, how much income tax you owe the government. These differ from tax deductions.
- 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 Litchfield utility company, the company will subtract the value of the excess energy your solar system produces from your monthly utility bill. In some locations, this credit is dollar-for-dollar, while in others you may receive a refund equivalent to a percentage of the value.
- Rebates: Rebates, or partial refunds after a purchase, are typically applied prior to any solar tax credits being calculated. Rebates may be provided by your local utility company, by your county or by your state.
Federal Solar Incentives
Federal incentives are the kind of incentives that you are most likely to have some familiarity with. The solar incentive that you may be most familiar with is the Federal Solar Investment Tax Credit (ITC), which provides a credit on your taxes equal to a certain percentage of the cost of your solar system.
The ITC originally covered 30% of the cost of solar panel installation, 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 can be applied to solar panels installed after January 1, 2006 on your primary or secondary residence. The residence must be in the United States and owned by you.
To know exactly how much money the ITC could save you, speak with your local Litchfield solar panel installation expert.
The ITC was both renewed and expanded by the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. The new Clean Energy Credit is valid until 2035. American homeowners are now eligible for a 30% credit for solar systems that began installation after January 1, 2022 and are completed by the end of 2032. This credit will then be decreased by a few percentage points every year until the date of expiration. 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 Litchfield solar panel installer can answer any questions you have and explain how the new Clean Energy Credit may apply to you.
State & Local Solar Incentives
Not all solar incentives are federal; tax credits, rebates and more might also be offered at the local or state level. Some incentives are ongoing, while others may only be available for a limited time. Incentives might be offered by the Minnesota government, or by your county or municipality.
Next Steps for Installing Solar in Litchfield
Solar incentives might be provided by your local utlity company, the Minnesota government or the federal government. The growing number of solar incentives available has helped nationwide use of solar energy increase greatly in the last 15 years. Talking to your local Litchfield solar panel installer is an excellent first step towards getting the most money possible when you switch to solar energy.
- 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 Litchfield, MN Solar Incentives FAQs
How do I learn if I qualify for certain solar incentives?
It's a smart idea to get in touch with your local Litchfield solar installer for a better understanding of which incentives your project will qualify for. Usually, solar incentives apply to new solar panel systems installed on a property you own (in the U.S.) within a specified date range. Some incentives, like those provided by the Minnesota government, might have additional requirements.
How much will a solar system save me annually on my electric bill in Litchfield?
Generally, homeowners in Litchfield who install solar panels save approximately $880.05 per year, or approximately $16,720.89 over 20 years after making the switch.
What are some environmental benefits of installing solar panels on my house?
You can lower your carbon footprint by 450 pounds of CO2 a year by installing solar panels. This adds up to approximately 9,000 pounds in 20 years. Solar is also a renewable energy source, meaning that switching your home over reduces the drain on our planet's resources.
I want to trade in my old appliances for ones that are more energy-efficient. Are there any benefits I can claim?
The recently passed Inflation Reduction Act provides multiple incentives designed to reward homeowners who make 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.
Can I apply for incentives both towards the initial cost of solar panels, and later as reimbursement?
The order in which incentives are applied could vary depending on which incentives you are eligible for but typically yes, you can receive multiple types of incentives for your solar project. Speak to your solar installer or a local tax professional to verify you are claiming all possible incentives and applying them in the correct order.
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.