2023 Solar Incentives Guide for Red Wing, MN - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Red Wing.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2023 and beyond)
- Ways to optimize your solar investment
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What Solar Tax Credits, Incentives, and Rebates are Available in Red Wing?
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
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/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
The phrase "solar incentives" refers to financial incentives implemented by the government and by solar companies to encourage people to use renewable energy by making solar panels more affordable. You might qualify for different types of incentives, including discounts, cash back or monthly utility bill credits, depending on your situation. Some incentives come from your specific utility company, county or municipality, some from the Minnesota government and others from the federal government. Some solar incentives you might qualify for are:
- Tax Exemptions: These may come in the form of property tax exemptions, which would allow you to exclude the value of your solar system when calculating the taxes you pay on your home. You could also look for exemptions on sales tax at the time of purchase.
- Rebates: Solar rebates can be provided by your state or county, or by your local utility company. These rebates work as partial refunds that are applied after you purchase a solar system and before tax credits are calculated.
- Net Metering: Net metering is an incentive you can get once your solar system is up and running. If you have a net metering agreement with your Red Wing utility company, they will subtract the value of the excess energy your solar system produces from your monthly utility bill. In some locations, this is a dollar-for-dollar credit, while in other places you might make back a percentage of the value.
- Tax Credits: Different from tax deductions, tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the federal government.
Federal Solar Incentives
When thinking about solar incentives, you likely think of federal incentives first. The Federal Solar Investment Tax Credit, or ITC, is the most commonly known federal solar incentive. The ITC offers a tax credit for a predetermined percentage of the cost of your solar system.
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 on a property you own after January 1, 2006 for you to be eligible for the credit. Initially, the ITC applied to 30% of all system installation costs (panels, labor, accessories and equipment), although the total amount has fluctuated over the last few years between 26-30%. The amount you qualify for will depend on when your solar system was installed. There is no cap on the claim amount.
To better understand how the ITC may apply to your situation, call your local Red Wing solar panel installation expert and ask for more information.
In August 2022, the ITC (now called the Clean Energy Credit) was bolstered by the passage of the Inflation Reduction Act. With the new provisions, solar installation projects started after January 1, 2022 and completed by the end of 2032 might qualify for a 30% tax credit. The amount of the credit will then see a slight annual decrease until the end of the current Clean Energy Credit in 2035. Starting in 2023, it will also be easier to qualify for credits for energy storage systems with the new act.
Click here to learn more about the new Inflation Reduction Act. To fully understand how the new Clean Energy Credit might apply to you, reach out to your local Red Wing solar installation expert.
State & Local Solar Incentives
There are often also state solar incentives in addition to those provided by the federal government. Tax credits, rebates and more might be available at a more local level. Incentives might be provided by your county or municipality, or by the state of Minnesota. Some incentives may be available for only a limited time, while others are ongoing.
Next Steps for Installing Solar in Red Wing
Solar incentives can be offered by the federal government, the Minnesota government or your local utility company. The variety of available solar incentives has helped nationwide use of solar energy increase greatly in the last 15 years. We suggest talking to your local Red Wing solar installation company to learn more about these incentives and to make sure that you're getting all of the money you can for your solar system.
EcoWatch's Red Wing, MN Solar Incentives FAQs
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