2023 Solar Incentives Guide for Minneapolis, MN - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Minneapolis.
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 May 04, 2023
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What Solar Tax Credits, Incentives, and Rebates are Available in Minneapolis?
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
Connexus Energy - Residential Energy Efficiency Rebate Program
Wi-Fi Thermostat: $125
Honeywell Wi-Fi Thermostat: Free, with enrollment in PowerNap Wi-Fi Air Conditioning program
Load Control: Varies
Peak-Time Rebate: $1/kWh saved
Great River Energy (28 Member Cooperatives) - Energy Wise Residential Efficiency Rebates
Wright-Hennepin Cooperative Electric Association - Residential Energy Efficiency Rebate Program
Quick Cash Air-Source Heat Pump: up to $900
Quick Cash Air Conditioning: up to $200
Peak Shave Water Heating: $15/kW
Quick Cash Water Heating: Up to $950
Metered Water Storage: $0.06/kWh
Ductless Air Source Heat Pump: $200
Quick Cash Water Storage: up to $300
Dual Fuel: $5/kW
Electric Thermal Storage (ETS) $5/kW
HVAC Electronically Commutated Motor: $50/motor
Pool Pumps: $200-$400
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 are intended to make renewable energy usage more affordable through financial incentives to help people install solar panels on their homes. Incentives could include things like discounts, cash back or credit on your utility bill each month. Some incentives are provided by the federal government, while others are provided by the Minnesota government or your utility company, county or municipality. Some broad categories of solar incentives include:
- Net Metering: Net metering becomes relevant once your solar panels are up and running. If you've signed a net metering agreement with your Minneapolis utility company, it 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 may receive a refund equivalent to a percentage of the value.
- Tax Exemptions: These could come in the form of property tax exemptions, which can let you exclude the value added by your solar panels when paying taxes on your house. You could also look for exemptions on sales tax at the time of purchase.
- Tax Credits: Tax credits are dollar-for-dollar reductions (not deductions) in how much income tax you owe the government.
- Rebates: Solar rebates can be provided by your state or county, or by your local utility company. These rebates are essentially cash back that is applied after you purchase a solar system and before tax credits are calculated.
Federal Solar Incentives
When thinking about solar incentives, you probably think of federal incentives first. The Federal Solar Investment Tax Credit, or ITC, is the best-known federal solar incentive. The ITC allows you to claim a tax credit for a specific percentage of the cost of your solar system.
The ITC can be credited towards the value of a solar system installed on your primary or secondary residence in the United States. The solar system has to have been installed after January 1, 2006 on a property you own for you to claim the credit. The ITC initially covered 30% of all installation costs (panels, labor, equipment and accessories), although the covered amount has fluctuated slightly over the years between 26-30%. The installation date of your solar system will determine what percentage you are eligible for. There is no cap on the claim amount.
Your local Minneapolis solar panel installation expert can provide you with more information about the ITC and how it applies to your situation.
In August 2022, the ITC (now referred to as the Clean Energy Credit) was bolstered by the passing of the Inflation Reduction Act. With the new provisions, solar installation projects that are completed between 2022 and 2032 can qualify for a 30% tax credit. This credit amount will then see a slight annual decrease until the current Clean Energy Credit expires in 2035. The program expansion also makes claiming credit for energy storage systems easier than ever before, beginning in 2023.
Click here to learn more about the new Inflation Reduction Act. Your local Minneapolis solar panel company is the best resource for answering your questions about the new Clean Energy Credit and how it applies to you.
State & Local Solar Incentives
There are often also state solar incentives in addition to those provided by the federal government. Rebates, tax credits and more might be available at a more local level. Incentives might be handled by the state of Minnesota, or by your county or municipality. Some incentives might only be available for a limited time, while others are ongoing.
Next Steps for Installing Solar in Minneapolis
You can apply for and receive solar incentives from the federal government and the Minnesota government, as well as from your local utility company. The increased availability of solar initiatives in the past 15 years has helped increase nationwide solar energy use enormously. When you're ready to make the switch to solar energy, reaching out to your local Minneapolis solar panel installation expert is an excellent place to start.
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- Expansive service area
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- Certified B Corp
- No leases or PPAs
- Quality of installation may vary by location
- Price-match guarantee
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EcoWatch's Minneapolis, MN Solar Incentives FAQs
I already have solar panels. Does my system qualify for any incentives?
If your solar system was installed after January 1, 2022, you may qualify for the newly increased 30% tax credit under the Inflation Reduction Act. If you had your system installed between 2006 and 2021, you might qualify for a tax credit between 26% and 30%, depending on the date of installation. Reaching out to the company that installed your solar system, or any local Minneapolis solar installer, can help you understand what incentives you might want to apply for.
What are the highest-rated solar panel installation companies near me?
To find the best solar panel installer in your area, check out our guide to Minneapolis' best solar panel companies.
When does the federal solar tax credit end?
The Clean Energy Credit (previously referred to as the federal solar tax credit, or the ITC), currently ends on January 1, 2035. Currently set at 30%, the credit will drop to 26% in 2033 and to 22% in 2034.
If I change out my appliances for ones that utilize solar energy, are there benefits I can claim?
Under the new Inflation Reduction Act, there are a variety of new financial incentives that are available when you 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 up-front cost of solar panels, and later as reimbursement?
The order in which incentives are applied may vary depending on which incentives you are eligible for but in most cases yes, you can claim multiple types of incentives for your solar project. Talk with your solar installer or a local tax professional to confirm you are claiming all of the incentives you qualify for 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.