Update as of 5/15/25: Again, there are more possible changes happening with solar incentives. Solar opponents in Congress released a proposed budget that would eliminate the current 30% residential solar tax credit (ITC 25D), effective at the end of this year.
While this bill isn’t law yet, and TruNorth Solar is working with our partners to advocate for homeowners, it is a likely outcome that we lose the 30% credit for homeowners.
Posted May 2, 2025
Let TruNorth Solar help you navigate solar and storage incentives in Minnesota!
In Minnesota, there are currently a variety of solar and storage incentives or programs available for both residential and commercial properties in 2025. These incentives aim to encourage the adoption of solar energy, reduce the upfront costs, provide long-term savings, and promote clean energy use.
But, we highly encourage you not to wait to take advantage of these incentives!
Unfortunately, there has been legislation proposed to make changes to, or phase out, some of these incentives and programs for solar in the future (as always, give us a call if you’d like to discuss this further).
While these changes have not been enacted into law at this time, and TruNorth is fighting hard for the incentives to remain in place, it’s still uncertain whether the programs will be available long-term. So don’t wait until it’s too late.
TruNorth Solar is here to help you find incentives or rebates that work for your needs and installation, but here’s a quick summary of what’s currently available:
Residential Solar Incentives:
- Federal Solar Investment Tax Credit (ITC): The ITC allows homeowners to claim a credit of 30% of the total cost of the solar panel system against their federal income taxes. For now, this currently applies to systems installed through 2032, but this timeline is likely to be changing, as noted in the update above.
- Net Metering: Utilities in Minnesota are required to offer net metering for systems under 40 kW in size. This allows homeowners to receive credits on their utility bill for any excess electricity their solar system sends back to the grid. The compensation rate is generally the annual average retail rate for each utility.
- Xcel Energy Solar*Rewards Program: Xcel Energy customers can receive performance-based incentives. For 2025, the performance incentive is $0.03 per kilowatt-hour (kWh) of solar power produced annually for up to 10 years.
- Income-Qualified Incentive: Income-qualified Xcel customers (those receiving benefits under LIEAP or WAP and meeting specific income criteria) may also be eligible for an upfront rebate of $3.00 per watt (kW) of the system’s capacity, up to a maximum rebate.
- Minnesota Department of Commerce Energy Storage Incentives: For battery storage systems paired with solar, there are limited-fund rebates available:
- Xcel Energy Customers: $175 per kWh of storage capacity, up to $5,000 ($370/kWh for income-qualified).
- Non-Xcel Energy Customers: $250 per kWh, up to $7,000 ($1,000/kWh for income-qualified).
- Other Local Utility Incentives or Rebates: Some local municipal utilities and electric cooperatives (like Minnesota Power, Dakota Electric, Austin Utilities, and more) offer additional programs.
- Minnesota State Sales Tax Exemption: Solar energy systems and related equipment are 100% exempt from Minnesota state sales tax.
- Minnesota Property Tax Exemption: The added value of a solar energy system to your home is exempt from property tax assessments. This means your property taxes will not increase due to the installation of solar panels.
Commercial Solar Incentives:
- Commercial Incentives include most of those noted above, though some of the specifics may vary:
- Federal Solar Investment Tax Credit (ITC)
- Net Metering
- Other Local Utility Incentives or Rebates
- Minnesota State Sales Tax Exemption
- Minnesota Property Tax Exemption
- Xcel Energy Solar*Rewards for Business, in some cases. Per Xcel Energy, “Income-qualified incentives are available for organizations, such as non-profits and government entities, that work to provide benefit to income-qualified communities through specific services.”
- Accelerated Depreciation (MACRS): Businesses can recover investments in solar energy systems through accelerated depreciation deductions under the Modified Accelerated Cost Recovery System (MACRS). This allows for depreciating the value of the equipment over a five-year period, providing significant tax savings.
- Commercial Property Assessed Clean Energy (C-PACE): This program provides financing for energy efficiency and renewable energy projects, including solar, through a special assessment on the commercial property. It can help overcome upfront costs. The Rural Minnesota Energy Board also offers a PACE program for rural businesses.
You can take a look here for a more comprehensive list of available programs in Minnesota, but it’s important to note that program details, eligibility requirements, and funding availability can change.
We understand all of this can be quite overwhelming, but luckily, the TruNorth Solar team is here to provide valuable guidance on all of the incentives so you know you’re taking advantage of everything you’re eligible for.
Please reach out to the TNS team if you have questions, or for a free estimate on a solar energy and/or battery storage system.
