2025 Solar Incentives Guide for Prior Lake, MN - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Prior Lake.
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 Prior Lake?
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
Great River Energy (28 Member Cooperatives) - Energy Wise Residential Efficiency Rebates
Home Energy Loan Program
Fix-Up Loan
Renewable Energy Production Incentive
1.0¢/kWh for certain hydro facilities in need of repair
Dakota Electric Association - Residential Energy Efficiency Rebate Program
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
Shakopee Public Utilities - Residential Energy Efficiency Rebate Program
Dishwasher: $100
Refrigerator/Freezer Recycling: $200
Air Source Heat Pump: $200-$500/unit
Ground Source Heat Pump: $100/ton
LED Bulbs: $5
LED Holiday Light Strings: $3
Mini-Split Ductless A/C: $200
Refrigerator: $200
Room A/C: $25
Room A/C recycling: $50
Minnesota Valley Electric Cooperative - Residential Energy Efficiency Rebate Program
Freezer/Refrigerator: $25
Dishwasher: $25
Air-Source Heat Pump: $500
Mini Split Heat Pump: $300
Ground-Source Heat Pump: $200 per ton
Air Conditioner: $100
ECM (Electronically Commutated Motor): $50
Electric Resistance Heating Products: $10/kW
Central A/C or Heat Pump Tune-Up: $25
Electric Resistant Heating Products: $10/kW
Minnesota Valley Electric Cooperative -Residential Energy Resource Conservation Loan Program
Federal Residential Renewable Energy Tax Credit
Source: https://www.dsireusa.org/
Solar incentives are intended to encourage people to switch their home over to renewable energy by offering financial incentives meant to lower the burden of solar panel installation and use. Solar incentives might include upfront discounts, cash back or monthly credits towards your utility bill. Some incentives are provided 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:
- Rebates: Solar rebates may be offered by your local utility company, or by your state or county. These rebates work as partial refunds that are applied after you purchase solar panels and before tax credits are calculated.
- Tax Credits: Tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the government. (This is different from a tax deduction.)
- 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. This allows you to exclude the value added by your solar system when paying property tax on your house.
- Net Metering: You can sign a net metering contract with your Prior Lake utility company. This agreement may apply to all or a percentage of the excess electricity your solar panels generate. They will then subtract this value from your monthly utility bill.
Federal Solar Incentives
Federal solar incentives are probably the first thing that comes to mind when you think about solar incentives. You might have heard of the Federal Solar Investment Tax Credit, or ITC. The ITC is a tax credit that reduces your taxes by a specified percentage of the money you spend installing solar panels.
The ITC applies towards solar systems installed after January 1, 2006, and allows you to deduct from your taxes a percentage of the total cost of solar panels, accessories, equipment and labor. This credit can apply towards a solar panel system installed on a primary or secondary residence that you own in the United States. The original claim amount was 30% of the total cost, although certain projects may qualify for only 26%, depending on the details. There is no maximum claim amount.
To better understand how the ITC may apply to you, contact your local Prior Lake solar panel installation expert and request more information.
The ITC has been renewed and expanded following the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. The Clean Energy Credit lasts until 2035. Any solar installation project that is completed between January 1, 2022, and December 31, 2032, may qualify for a 30% tax credit; this amount will be decreased slightly on a yearly basis until the current program ends. The expansion to the program also makes it easier to get credit for energy storage systems, starting in 2023.
Click here to learn more about the new Inflation Reduction Act. The easiest way to learn more about how the new Clean Energy Credit will apply to you is to reach out to your local Prior Lake solar panel installation expert with your questions.
State & Local Solar Incentives
Federal solar incentives are not your only option; tax credits, rebates and more might also be offered at the local or state level. These incentives may be given out by your county or municipality, or by the Minnesota government. Some are ongoing, while others are available for a limited time.
Next Steps for Installing Solar in Prior Lake
There are many types of solar incentives: those given by the federal government, those offered by the Minnesota government and those given by local utility companies, to name a few. The use of solar energy has grown tremendously in the last 15 years, partially thanks to these incentives. If you're ready to make the change to solar energy, talking to your local Prior Lake solar panel installation expert is an excellent place to start.
EcoWatch's Prior Lake, MN Solar Incentives FAQs
Who installs solar panel systems near me?
To learn about the top solar panel installation companies near you, read our article on the top solar companies in Prior Lake.
How long until the federal solar tax credit ends?
The Clean Energy Credit (previously referred to as the federal solar tax credit, or ITC), currently ends on January 1, 2035. Currently set at 30%, the credit will drop to 26% in 2033 and to 22% in 2034.
Can I use solar and another type of renewable energy in combination to power my home?
Yes, you can utilize multiple types of renewable energy to power your home, such as a combination of geothermal and solar. You can also combine renewable energy generation with a backup source of non-renewable energy. Be sure to discuss your plan with your local Prior Lake solar panel installer, so that you understand what you'll need and what incentives you may or may not qualify for.
Can I claim incentives for adding solar panels to a vacation home, rental property or commercial property?
While we recommend getting in touch with your local solar installer and/or tax professional to better understand what solar incentives apply to you, many incentives can be claimed on a second home, so long as that home is in the United States and owned by you. There may be additional incentives available specifically for commercial properties, depending on the specifics.
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.