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Last updated: May 2026
Avg. sun hours/day
4.4 hrs
Avg. electricity rate
$0.14/kWh
Active incentives
4
Performance-based incentive of $0.07/kWh on production for 10 years. Available to Xcel Energy MN residential customers ≤ 20 kW. Annual program cap; first-come-first-served.
Xcel Energy Minnesota's Solar*Rewards Program pays a performance-based incentive of approximately $0.07/kWh on solar generation for 10 years from system commissioning. Residential systems ≤ 20 kW eligible. The program operates under annual capacity allocations and exhausts before fiscal year-end; check current availability on the Xcel portal. Solar*Rewards is in addition to net metering and stacks with the property/sales tax exemptions. Other Minnesota utilities (Otter Tail Power, Minnesota Power, cooperatives) operate separate Made in Minnesota and Solar United Neighbors programmes; check your specific utility for parallel offerings.
1:1 retail-rate net metering for residential systems ≤ 40 kW. Annual reset cashes out at avoided cost rate.
Minnesota's net metering rules require investor-owned utilities (Xcel, Minnesota Power, Otter Tail Power) to offer 1:1 retail-rate compensation for residential customer-generators ≤ 40 kW. Cooperatives have varied participation — most offer 1:1 above the federal minimum. Annual reset typically settles at avoided cost (~$0.04/kWh).
Full state sales tax exemption (6.875%) on solar PV equipment and installation. Saves approximately $1,000 on a $15,000 system.
Minnesota Statute 297A.67 subdivision 29 exempts solar PV equipment from sales and use tax. The installer applies the exemption at point of sale. Battery storage paired with PV is generally covered when supplied as part of a single bundled service.
Exemption from local property tax assessment of the value added by qualifying residential solar PV systems.
Minnesota Statute 272.02 subdivision 22 excludes solar energy systems from property tax assessment. Filed with the local County Assessor. Battery storage installed alongside qualifying solar PV is included.
Expired for systems placed in service after December 31, 2025.
Federal Section 25D expired 2026-01-01. Minnesota's Solar*Rewards production payment, net metering, and tax exemptions keep post-ITC payback in the 9–11 year range. See /guides/solar-after-itc-expired.
Our calculator uses Minnesota's actual sun hours (4.4 hrs/day) and electricity rates.
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