Minnesota Solar Incentives & Rebates Guide 2026

The federal Investment Tax Credit (ITC) allows Minnesota homeowners to deduct 30% of the total cost of a solar energy system from their federal income taxes. For a typical 6kW system costing $17,280 in Minnesota, that's a direct tax credit of $5,184. This isn't a deduction — it's a dollar-for-dollar reduction of your tax bill.

The 30% ITC is available through 2032 under the Inflation Reduction Act, then steps down to 26% in 2033 and 22% in 2034. There's no maximum cap on the residential credit. If your tax liability is less than the credit amount, you can roll the remaining credit forward to the next tax year. The system must be installed on your primary or secondary residence, and you must own it (leased systems don't qualify for the homeowner credit).

Minnesota does not currently offer a state-level solar tax credit. However, Minnesota homeowners still benefit from the substantial 30% federal ITC, worth $5,184 on a typical 6kW system. Additionally, Solar*Rewards from Xcel Energy. Even without a state credit, solar is economically attractive in Minnesota with electricity rates averaging 15.82¢/kWh.

Great news for Minnesota homeowners: Solar energy systems are exempt from property tax assessments. 100% property tax exemption Studies show solar adds 3-4% to home values. For a $300,000 home, that's roughly $12,000 in added value — and with Minnesota's property tax exemption, you save approximately $132 per year in property taxes you'd otherwise owe on that increased value.

Minnesota exempts solar energy equipment from state sales tax. On a 6kW system costing $17,280, this saves you approximately $1,123 at the point of purchase. This is an immediate, upfront savings that reduces your out-of-pocket cost before even accounting for tax credits.

Net metering policy: Full Retail Rate. Full retail rate net metering; includes labor and storage The current system size cap is 40 kW.

Minnesota's full retail rate net metering is one of the strongest solar policies available. Every excess kWh your system sends to the grid earns you a credit at the full retail rate of 15.82¢/kWh. This means your solar panels generate maximum value — surplus energy produced during sunny hours offsets your evening and nighttime consumption at the same rate you'd pay to buy that electricity.

Solar*Rewards from Xcel Energy

Utility rebates and state programs can change frequently. We recommend checking with your local utility and the Database of State Incentives for Renewables & Efficiency (DSIRE) for the most current programs available in your area.

Minnesota has a mandatory Renewable Portfolio Standard (RPS) target of 26.5% by 2025, 80% clean by 2035, 100% by 2040. This legally binding target drives continued investment in renewable energy infrastructure and often supports solar-friendly policies like net metering and SREC programs. A strong RPS is generally good news for solar homeowners, as it creates market demand for renewable energy and helps maintain favorable solar policies.