2024 Solar Incentives Guide for Rochester, MN - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Rochester.
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 Rochester?
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
Home Energy Loan Program
Fix-Up Loan
Renewable Energy Production Incentive
1.0¢/kWh for certain hydro facilities in need of repair
Rochester Public Utilities - Solar Rebate Program
Rochester Public Utilities - Residential Conserve and Save Rebate
Clothes Dryer: $50
Dehumidifier: $15 - $25
Dishwashers: $25 - $40
Refrigerators/Freezers: $25, plus $15 bonus if properly recycled
Room Air Conditioners: $25, plus $15 bonus if properly recycled
LED Bulbs: 50% of cost up to $7 per bulb
LED Fixtures: 50% of cost up to $20
Ceiling Fans with LED Lighting: 50% of cost, up to $15 - $25
Central AC: $100 - $200, plus additional incentives per SEER above 14.5
Furnace Fan Motors: $50
Geothermal Heat Pumps: $200/ton plus $20/ton per EER above minimum efficiency requirement, plus $250 bonus with desuperheater
Heat Pump Water Heaters: $60-$400/heater, not to exceed 50% of cost
Smart Thermostat: $50-$100, not to exceed 50% of cost
Air Source or Mini Split Heat Pumps: $100-$2,200 plus $10/ton per EER above minimum efficiency requirement, not to exceed 50% of cost
Central A/C Tune-Up: $25
Federal Residential Renewable Energy Tax Credit
Source: https://www.dsireusa.org/
Solar incentives are intended to make renewable energy usage more affordable through financial incentives for individuals who install solar panels on their homes. Various kinds of incentives, such as discounts, cash back or credit towards your monthly utility bill, may be available to you. Some incentives may be provided via the Minnesota government, by your utility company or by county or municipality, while others are federal. Types of solar incentives might include:
- Net Metering: You may be able to sign a net metering agreement with your Rochester utility company. This agreement may apply to all or a percentage of the excess electricity that is generated by your solar panels. They will then subtract this value from your utility bill each month.
- 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.
- Rebates: A solar rebate is a partial refund credited to your account after you've paid for your solar system. These may be offered by your local utility company, your state or your county. The rebates are usually applied before calculating tax credits.
- Tax Exemptions: Sales tax exemptions are effective at the time of purchase for your solar panels. Property tax exemptions allow you to ignore the value that your solar panels add when you calculate how much property tax you need to pay on your home.
Best Social Impact
Palmetto Solar
- Expansive service area
- Makes charitable contributions
- Certified B Corp
- No leases or PPAs
- Quality of installation may vary by location
Best Technology
Tesla 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
Federal Solar Incentives
When you hear the term "solar incentives," federal incentives may be the first thing that comes to mind. You've likely heard of the Federal Solar Investment Tax Credit, or ITC. The ITC is a tax credit that reduces your taxes by a predetermined percentage of the money you spend on solar panels for your home.
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, labor, equipment and accessories. This credit can be claimed on a solar panel system installed on a primary or secondary residence in the United States that you own. 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 amount you can claim.
Your local Rochester solar panel installer can give you more information about the ITC and how it may apply to your situation.
In August 2022, the ITC (now referred to as the Clean Energy Credit) was expanded and extended by the passage of the Inflation Reduction Act. For solar systems installed between January 1, 2022, and December 31, 2032, homeowners can apply for a credit equal to 30% of the total cost. After 2033, the percentage will decrease annually until the Clean Energy Credit expires in 2035. Beginning in 2023, it will also be easier to claim credits for energy storage systems under this new program.
More information about the new Inflation Reduction Act can be found here. Your local Rochester solar panel company is the best resource for answering your questions regarding the new Clean Energy Credit and how it applies to you.
State & Local Solar Incentives
Some solar incentives may be offered at the local or state level. Like with federal incentives, these might include rebates, tax credits and more. Some incentives are ongoing, while others may only be available for a limited time. Solar incentives might be given by the Minnesota government, or by your county or municipality.
Next Steps for Installing Solar in Rochester
There are a variety of solar incentives: those offered by local utility companies, those given by the Minnesota government and those offered by the federal government, to name a few. Solar energy use has grown enormously in the last 15 years, partially due to these incentives. We suggest talking to your local Rochester solar installer to learn more about these incentives and to ensure that you're getting all the money you can for your solar panels.
EcoWatch's Rochester, MN Solar Incentives FAQs
I already have solar panels installed. Does my system qualify for any incentives?
Your best bet is to talk to a representative from the company that installed your solar system – or call a local Rochester solar installer — to better understand which incentives you might qualify for. If your solar panels were installed after January 1, 2022, you likely qualify for the newly increased 30% tax credit under the Inflation Reduction Act. Solar systems installed between 2006 and 2021 may qualify for a tax credit of 26-30%.
What are some environmental benefits of installing solar panels on my house?
Solar energy is renewable — by changing where you get your energy, you help lessen the strain on our planet's resources. You can also lower your home's CO2 emissions by 450 pounds a year, or around 9,000 pounds in 20 years.
How long until the federal solar tax credit ends?
The federal solar tax credit, formerly called the ITC and now called the Clean Energy Credit, is scheduled to end on January 1, 2035. The current 30% credit will end in 2032, replaced by a 26% credit in 2033 and a 22% credit in 2034.
Can I apply for incentives both towards the up-front cost of solar panels, and later as reimbursement?
Yes, you can receive both rebates and tax credits towards the cost of solar panels. Depending on which incentives you are receiving, they may apply in a different order. Be sure to speak with your solar installer or a local tax professional to confirm that you are claiming incentives correctly and getting the most money you can.
What if I add a solar system to a rental property, vacation home or commercial property? Can I still qualify for incentives?
While we recommend talking to your local solar installer and/or tax professional to fully understand what solar incentives apply to you, many incentives will apply to a second home, provided that it is in the United States and owned by you. There may be additional incentives available for commercial properties specifically, depending on the details.
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.