As more Minnesotans embrace renewable energy, the state continues to offer a variety of solar incentives to make installing solar panels more affordable and accessible. If you’re considering going solar before the end of the year, this is a great time to take advantage of these incentives, which can significantly lower the upfront costs of installation. Here’s a breakdown of the top solar incentives, tax credits, and rebates available to Minnesota residents in 2024.
1. Federal Investment Tax Credit (ITC)
The Federal Investment Tax Credit (ITC) remains one of the most substantial financial incentives available to homeowners and businesses installing solar energy systems. In 2024, the ITC allows you to deduct 30% of the cost of installing solar panels from your federal taxes. This applies to both residential and commercial properties, helping reduce the overall installation costs significantly.
There’s no cap on the value of the ITC, meaning the more you invest in your solar system, the more you can deduct. However, this incentive is scheduled to decrease in the coming years, so 2024 is a prime time to act and secure the full 30% credit.
2. Minnesota Solar*Rewards Program
The Solar*Rewards Program is a performance-based incentive offered by Xcel Energy, one of Minnesota’s largest utility providers. Through this program, homeowners who install solar panels can earn payments based on the energy their system produces. For every kilowatt-hour (kWh) of solar energy your system generates, you’ll receive a rebate that helps offset your installation costs.
This program is available for solar systems up to 40 kW in size, and payments are made annually over a 10-year period. The Solar*Rewards Program is a great way to ensure ongoing financial benefits from your solar energy system, especially as it encourages energy efficiency and long-term sustainability.
3. Minnesota Power SolarSense Program
Minnesota Power offers the SolarSense program, which provides rebates to residential and commercial customers who install solar photovoltaic (PV) systems. This rebate helps offset the initial costs of solar installation, and the amount you can receive depends on the size of your system and your energy needs.
In 2024, the SolarSense program continues to provide rebates to qualifying projects, making solar more affordable for those within Minnesota Power’s service areas. The program has limited annual funding, so it’s wise to apply early to take full advantage of the rebate.
4. Net Metering in Minnesota
Net metering is a policy that allows homeowners with solar panels to send excess energy back to the grid and receive credits from their utility company. In Minnesota, utilities like Xcel Energy and Minnesota Power participate in net metering programs, which means if your solar system produces more energy than you use, you’ll earn energy credits that can be applied to future bills.
This can be especially beneficial during the summer months when your system may generate more electricity than you need. Net metering ensures you maximize your investment by turning surplus energy into future savings.
5. Property Tax Exemption
Installing a solar energy system can increase the value of your home, but in Minnesota, you don’t have to worry about a hike in property taxes. The state’s Property Tax Exemption for Solar Energy Systems means that any value added to your home from solar installation will not be included in your property’s assessed value for tax purposes.
This exemption allows homeowners to enjoy the benefits of increased home value without facing additional property taxes, making it an attractive financial incentive for solar installations in 2024.
6. Sales Tax Exemption
In addition to property tax relief, Minnesota also offers a sales tax exemption for solar energy systems. This means that when you purchase a solar system, the equipment and installation are exempt from state sales taxes, saving you an additional 6.875% on the cost of your system.
This exemption applies to both residential and commercial solar installations and can provide significant savings, especially for larger systems.
7. PACE Financing (Property Assessed Clean Energy)
Minnesota also offers Property Assessed Clean Energy (PACE) financing, which allows property owners to finance the upfront costs of solar energy systems through their property taxes. PACE financing is repaid over time as part of the property’s tax bill, and it often comes with low interest rates and extended repayment periods.
This program is particularly helpful for businesses and commercial property owners who want to spread out the cost of a solar installation without taking on traditional loans. It’s also a great option for homeowners looking for affordable, long-term financing solutions.
At Erickson Electric Company, we specialize in helping homeowners and businesses navigate the solar installation process and take full advantage of the available incentives. If you’re ready to explore solar energy in 2024, contact us for a consultation. We’ll guide you through the process, from initial design to securing rebates and incentives, ensuring you get the most out of your investment.