2025 Solar Incentives Guide for South St. Paul, MN - Tax Credits & Rebates

What Solar Tax Credits, Incentives, and Rebates are Available in South St. Paul?

Source: https://www.dsireusa.org/

Solar incentives are intended to encourage people to switch to renewable energy by providing financial incentives that lower the burden of solar panel installation and use. Different types of incentives, such as cash back, discounts or credit towards your monthly utility bill, might be available to you. Some incentives may be offered by the state of Minnesota, by your utility company or by county or municipality, while others are federal. 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 South St. Paul utility company, they will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some areas, this is a dollar-for-dollar credit, while in others you might make back a percentage of the value.
• Tax Exemptions: Your solar system could qualify for both sales tax and property tax exemptions. Sales tax exemptions are effective at the time of purchase. Property tax exemptions let you ignore the added value of the solar panels when you are calculating property taxes on your home.
• Rebates: Your solar installer might help you claim a rebate, or partial refund of your purchase, for your solar panels. States or counties will also offer limited-time rebates at various times. The value of a rebate will usually be deducted from your total price before tax credits are calculated.
• Tax Credits: These credits are dollar-for-dollar reductions (not deductions) in how much in taxes you owe the federal government.

Federal Solar Incentives

Federal incentives are the kind of incentives that you are most likely to have some familiarity with. A federal incentive that most people are likely 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 applies towards solar systems installed after January 1, 2006, and lets you deduct from your taxes a percentage of the total cost of solar panels, equipment, accessories and labor. You can claim this credit for a solar panel system installed on a primary or secondary residence in the United States that you own. The original amount you could claim was 30% of the total cost, although depending on when the project was completed, your credit may range from 26-30%. There is no maximum amount you can claim.

To best understand how the ITC will apply to you, reach out to your local South St. Paul solar panel installer and ask for 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 bolsters the current credit, increasing it up to 30% for solar installation projects started after January 1, 2022, and completed by the end of 2032. After 2032, the percentage will see a slight decrease annually until the program expires in 2035. Beginning 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. Your local South St. Paul solar panel installer can answer any questions you have and explain how the new Clean Energy Credit will apply to you.

State & Local Solar Incentives

Some solar incentives may be provided by state and local governments. As with federal incentives, these could include tax credits, rebates and more. Incentives might be handled by your county or municipality, or by the state of Minnesota. Certain incentives are available for only a limited time, while others are ongoing.

Next Steps for Installing Solar in South St. Paul

There are a variety of solar incentives: those offered by local utility companies, those offered by the federal government and those given by the Minnesota government, to name a few. Solar energy use has increased enormously in the last 15 years, partially thanks to these incentives. We suggest talking to your local South St. Paul solar installation company for more information about these incentives and to ensure that you're getting the largest number possible for your solar panels.