2025 Solar Incentives Guide for Otsego, MN - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Otsego.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2024 and beyond)
- Ways to optimize your solar investment
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What Solar Tax Credits, Incentives, and Rebates are Available in Otsego?
Xcel Energy - Solar*Rewards Program
Medium-sized Systems 25.1-500 kW: $0.0375/kWh
Large Systems (>500kW): Determined through competitive bid
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
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
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
Connexus Energy - Residential Energy Efficiency Loan Program
OR
$20,000
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
Fix-Up Loan
Renewable Energy Production Incentive
1.0¢/kWh for certain hydro facilities in need of repair
Elk River Municipal Utilities - Residential Energy Efficiency Rebate Program
Air-Source Heat Pump: $300 - $500
Air Conditioners: $50 - $100 depending on SEER rating
Geothermal Heat Pump: $400/ton
Refrigerator/Freezer: $75 if old unit is recycled
Furnace Fan with ECM: $100
Heat Pump Water Heater: $300 (50 gallon) or $350 (80 gallon)
Pool Pump: $200
Irrigation Tune-Up: $50
Clothes Washer: $25/unit
Dishwasher: $25/unit
WaterSense Faucets: $10/unit
WaterSense Smart Irrigation Controllers: 50% of cost up to $250
WaterSense Toilets: $25/unit
Federal Residential Renewable Energy Tax Credit
Source: https://www.dsireusa.org/
Solar incentives are designed to encourage people to make the switch to renewable energy by offering incentives meant to lower the financial burden of solar panel installation and use. Various kinds of incentives, like cash back, discounts or credit towards your monthly utility bill, may be available to you. Some incentives may be offered by the Minnesota government, by your utility company or by county or municipality, while others are federal. You might qualify for any of the following types of solar incentives:
- Net Metering: Net metering is an incentive you can get after your solar system is up and running. If you have a net metering agreement in place with your Otsego utility company, they 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 other areas you might be refunded a percentage of the value.
- Rebates: A solar rebate is a partial refund after the purchase of your solar panels. These could be offered by your local utility company, your state or your county. The rebates are usually applied before calculating tax credits.
- Tax Credits: Different from tax deductions, tax credits reduce, dollar-for-dollar, the amount of income tax that you owe the government.
- Tax Exemptions: Tax exemptions can come in one of two forms. The first is sales tax exemption, applied when you purchase solar panels. The second is property tax exemption, which allows you to exclude the value added by your solar system when calculating property tax for your home.
Federal Solar Incentives
Federal solar incentives are likely the first thing that you think of when thinking about solar incentives. A federal incentive many people are probably familiar with is the Federal Solar Investment Tax Credit (ITC). This incentive is a tax credit for a specific percentage of your solar system's cost.
The ITC was originally for 30% of the cost of solar panel installation, although that number has fluctuated slightly over time between 26-30%. The installation date of your solar system will determine what percentage you qualify for. The total cost of installation includes the panels themselves as well as the cost of labor, accessories and equipment. There is no maximum claim amount. The ITC can be applied to solar panels installed after January 1, 2006, on your primary or secondary residence. The residence must be owned by you and in the United States.
Curious how the ITC might apply to your specific situation? Contact your local Otsego solar panel installation expert to get more information.
The Inflation Reduction Act, passed in August 2022, added more provisions to the ITC (as well as retitling it the Clean Energy Credit). The new Clean Energy Credit is valid until 2035. You can now receive a 30% credit for solar systems installed between January 1, 2022, and December 31, 2032. This credit will then be decreased by a few percentage points every year until it expires. Starting in 2023, the expansion will also make it easier to get credit for energy storage systems.
Click here to learn more about the new Inflation Reduction Act. The easiest way to learn more about how the new Clean Energy Credit applies to you is to reach out to your local Otsego solar panel installers with your questions.
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. These incentives — which may be handled by your county or municipality, or by the state of Minnesota — might be offered on an ongoing basis, or for only a limited time.
Next Steps for Installing Solar in Otsego
The expanding number of solar incentives available has enormously increased the nationwide adoption of solar energy over the last 15 years. You might qualify for solar incentives from the federal government, the Minnesota government or from your local utility company. Getting in touch with your local Otsego solar panel installation company is the best first step towards getting the most money possible when you switch to solar energy.
EcoWatch's Otsego, MN Solar Incentives FAQs
How much can I save on my electric bill annually if I install solar panels on my house in Otsego?
Generally, Otsego homeowners who install solar panels save about $955.77 per year, or approximately $18,159.60 over 20 years after making the switch.
What are some environmental benefits of installing solar panels on my home?
You can reduce your carbon footprint by 450 pounds of CO2 annually when you install solar panels. This adds up to around 9,000 pounds over 20 years. Solar is also a renewable energy source, meaning that making the switch reduces the drain on our planet's resources.
If I change out my appliances for ones that can use solar energy, are there any benefits that I can claim?
The recently passed Inflation Reduction Act provides multiple incentives meant to reward homeowners who make eco-friendly upgrades. Some incentives include tax credits and rebates for installing new electric appliances. You can find more details about these incentives here.
What if I am planning to add solar panels to a rental property, vacation home or commercial property? Will I still qualify for incentives?
Many solar incentives apply to a property located within the United States that you own; most secondary residences will fall into this category. Other solar incentives may be available for commercial properties, depending on the details. We recommend talking to your local solar installer and/or tax professional to fully understand what incentives may apply to your specific situation.
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.