Wondering if any new solar incentives have become available to make it easier to afford your new solar energy system? Here’s a look at what is currently available to homeowners in Minnesota and what may be available in 2025 and beyond.
Federal Solar Tax Credit
As we shared previously, the Inflation Reduction Act extended the 30 percent tax credit on new solar installations to 2034. The tax credit provides a dollar-for-dollar reduction in your income tax bill to help offset the cost of your new solar energy system. There is no maximum amount you can claim on the tax credit, which means 30 percent of the total cost of your solar energy system may be eligible.
What the Solar Tax Credit Covers
How much you receive for the federal solar tax credit is calculated based on five expenses related to your new solar energy system.
- The cost of the PV panels or cells.
- The costs of installation, including labor, fees, and inspection costs.
- Wiring, inverters, mounting equipment, and other balance-of-system materials.
- Energy storage devices with capacities of 3 kWh or more.
- Sales taxes on eligible expenses.
Sales Tax Exemption
The State of Minnesota has exempted solar energy systems from state sales tax, which will save you 6.875 percent of the total cost of your system. For the average homeowner, this could be a savings of $1,000 or more.
Minnesota Power SolarSense Lottery
For three days starting on March 1, the utility Minnesota Power opens up applications for its SolarSense lottery. This limited fund provides lucky property owners with rebates that reduce the upfront costs of their solar installations. In 2024, $87,675 was available to applicants. Learn more about the program and how to apply at mnpower.com.
Xcel Energy’s Solar*Rewards
Xcel Energy also offers an incentive program for homeowners who install solar energy systems. Solar*Rewards provides enrolled homeowners Renewable Energy Credits (RECs) in exchange for sending extra power their system generates to the grid. Xcel opens applications for the Solar*Rewards program in January and encourages homeowners to secure their Solar*Rewards enrollment before installing a new solar energy system. Learn more about the program at xcelenergy.com.
Future Savings: Solar for All
The Environmental Protection Agency has awarded the State of Minnesota more than $62 million to fund grants for qualified homeowners who want to install solar energy systems. Solar For All grants will be available to low-income and disadvantaged homeowners. While these grants were not yet available as of October 2024, homeowners may be able to take advantage of this program in 2025.
Learn more about the future program at mn.gov. In the meantime, beware of scammers out there promising free solar for low-income households. From the Department of Commerce:
Solar for All program funding is not yet available. Minnesota residents should be aware of bad actors attempting to use this high-profile program to spread scam offers. Offers of “free solar” to low-income households because of this program—whether received via phone, email, text, advertisement or door-to-door marketing—are probably not legitimate.
It’s an Exciting Time for Solar Incentives!
The TruNorth Solar team can help you make sense of all of the solar incentives so you know you’re taking advantage of everything you’re eligible for. Get in touch with the experts at TruNorth Solar today for a free estimate on your home’s solar energy system.
