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New incentive program gives solar a big boost in Minnesota

February 03, 2014


For Immediate Release:

The cost to install a solar energy system will be much more affordable for those who qualify for the new 10-year, $15-million-a-year, Made in Minnesota Solar Incentive Program. The program, which was launched on January 1 by the Minnesota Department of Commerce, will boost Minnesota’s solar energy generation.

Customers of investor-owned utilities (Xcel Energy, Alliant Energy, Minnesota Power, and Otter Tail Power) who install solar modules or collectors certified as manufactured in Minnesota are eligible for the program. Applications for Solar Electric Production Incentives and Solar Thermal Rebates will be accepted each year for 10 years from January 1 to February 28. 

Solar Electric Production Incentives

The solar electric incentives are performance-based—established by a system’s energy production—and paid over 10 years. Owners of an approved and installed solar electric system will receive payments annually by July 1 based on the kWh output of the system in the previous calendar year. Incentives are available for commercial, nonprofit/government, and residential solar electric systems. Residential systems may have a capacity of up to 10 kW.

For example, a resident who installs a 5 kW system that generates 6,446 kWh of electricity annually may be paid up to $2,514 (6,446 x $.39/kWh) each year for 10 years, or a total of about $25,000 (if annual production remains the same).

Solar Thermal Rebates

Up to $250,000 per year in rebates is reserved for customers who install “Made in Minnesota” solar thermal systems. The solar thermal system may be installed in residential or commercial facilities for hot water or space heating purposes. Rebates are available to commercial, multifamily, and residential property owners. The rebate is equal to 25 percent of the system installed cost up to a maximum of $2,500 for residential, $5,000 for multifamily, and $25,000 for commercial systems.

The new incentives combined with the 30 percent federal Residential Renewable Energy Tax Credit and a state sales tax exemption on solar equipment will likely pay for more than half of the cost of a residential solar system. A comprehensive list of incentives and policies that promote renewable energy and energy efficiency is available. 

Learn more about the Made in Minnesota program.


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Minnesota Energy Tips is provided twice a month by the Minnesota Department of Commerce, Division of Energy Resources. Contact the division’s Energy Information Center at energy.info@state.mn.us or 800-657-3710 with energy questions.