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

In this guide, we'll cover the latest solar incentives and rebates available in South St. Paul.

You'll learn about:

  • Local & State Solar Incentives
  • Federal Tax Credits (Updated for 2024 and beyond)
  • Ways to optimize your solar investment

Solar installers are experts in maximizing your solar tax credits and rebates.
Get a free quote from one of our trusted South St. Paul solar installers to see how much you can save.

By EcoWatch Local Advisors

Data Analysis: James Savino

Updated January 24, 2025

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

Xcel Energy - Solar*Rewards Program

Incentive Type:
Performance-Based Incentive
Systems 0.5 kW - 25 kW: $0.005/kWh
Medium-sized Systems 25.1-500 kW: $0.0375/kWh
Large Systems (>500kW): Determined through competitive bid

Solar Energy Sales Tax Exemption

Incentive Type:
Sales Tax Incentive
100% exemption

Wind and Solar-Electric (PV) Systems Exemption

Incentive Type:
Property Tax Incentive
Solar: 100% exemption from real property taxes
Wind: 100% exemption from real and personal property taxes

Wind Energy Sales Tax Exemption

Incentive Type:
Sales Tax Incentive
100% of sales tax

Xcel Energy (Electric and Gas) - Residential Energy Efficiency Rebate Program

Incentive Type:
Rebate Program
Refrigerator/Freezer Recycling: $50
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

Incentive Type:
Rebate Program
Dishwasher: $35
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

Incentive Type:
Grant Program

Connexus Energy - Residential Energy Efficiency Loan Program

Incentive Type:
Loan Program
$7,500
OR
$20,000

Home Energy Loan Program

Incentive Type:
Loan Program
$20,000

Fix-Up Loan

Incentive Type:
Loan Program
$15,000. Applicants may be eligible for higher loan and term amounts depending on income

Renewable Energy Production Incentive

Incentive Type:
Performance-Based Incentive
1.5¢/kWh
1.0¢/kWh for certain hydro facilities in need of repair

Federal Residential Renewable Energy Tax Credit

Incentive Type:
Personal Tax Credit
30% federal tax credit for systems placed in service after 12/31/2021 and before 01/01/2033. Good for: solar water heat, solar photovoltaics, biomass, geothermal heat pumps, wind (small), fuel cells using renewable fuels.

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.
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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.

EcoWatch's South St. Paul, MN Solar Incentives FAQs

How much will a solar system save me on my electric bill in South St. Paul annually?

On average, homeowners in South St. Paul who install solar panels save around $995.55 per year, or around $18,915.44 over 20 years after they make the switch.

What are some of the environmental benefits of switching to solar energy?

Solar energy is a renewable energy source — by changing where you get your energy, you help lessen the strain on our planet's resources. Solar panels can also lower the CO2 emissions from your home by 450 pounds yearly, or around 9,000 pounds in 20 years.

How long until the federal solar tax credit ends?

The federal solar tax credit, formerly known as the ITC and now titled the Clean Energy Credit, is scheduled to end 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 use both solar and another type of renewable energy to power my home?

Yes, you can use multiple types of renewable energy to power your home — for example, a combination of geothermal and solar. You can also combine renewable energy generation with a backup source of non-renewable energy. You should discuss the details of your plan with your local South St. Paul solar installation expert, so that you understand what you'll need and what kinds of incentives you will or won't qualify for.

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.

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