Solar Panel Cost in Minnesota
As mentioned above, Minnesota residents who switch to solar power will pay $2.98 per watt of installed capacity or $2,980 per kilowatt.
The following table provides estimated installation costs for home solar systems ranging from 5 kW to 10 kW, along with net prices after you apply the 30% federal solar tax credit.
| Home Solar System Size | Typical Installed Price in Minnesota* | Net Price After Federal Tax Credit |
|---|---|---|
| 5 kW | $14,900 | $10,430 |
| 6 kW | $17,880 | $12,516 |
| 7 kW | $20,860 | $14,602 |
| 8 kW | $23,840 | $16,688 |
| 9 kW | $26,820 | $18,774 |
| 10 kW | $29,800 | $20,860 |
*Average solar prices are based on state research conducted by the MarketWatch Guides team. Actual costs will vary depending on your home’s roof complexity and other site conditions.
To make sure your solar power system is properly sized and installed, we recommend contacting a solar installation company. Professional installers will calculate an optimal system wattage based on an assessment of your monthly energy bills and roof conditions.
What Affects the Cost of Solar Panels in Minnesota?
Your system capacity is the main factor that determines the cost of a solar panel array. Homes with increased energy consumption will need a larger solar array to offset monthly electricity bills.
However, you can lower the net cost of a solar system if your local government or utility company offers financial incentives for installing renewable energy technology. Below we discuss the main elements that factor into how much it costs to go solar in Minnesota.
- Your home energy consumption: According to the Energy Information Administration’s Residential Energy Consumption Survey, homes in the West North Central region of the U.S. have an average electricity usage of 10,697 kilowatt-hours (kWh) per year. To generate this energy output with Minnesota’s sunshine conditions, you would need a solar system capacity of around 8 kW. A solar panel system of this size costs around $23,840, which drops to $16,688 after the 30% federal tax credit. Your system size and price will vary if you require more or less capacity.
- Additional services and equipment: The cost of your solar project will increase if you add other components, such as a solar battery or an electric vehicle (EV) charger. The cost figures included in our guide only include solar panels and basic components like the inverter, wiring and racking. For example, solar batteries can add upwards of $10,000 to your system price.
- Local net metering policies: Net metering is an electricity billing method that favors solar panel owners. When your solar generation exceeds your consumption, you can send excess energy to the grid for power bill credits. The Minnesota Public Utilities Commission (MPUC) has a favorable net metering policy in which solar systems up to 40 kW in size receive full credit for excess energy sent to the grid.
- Solar rebate programs and tax incentives: Minnesota offers a sales tax exemption and property tax exemption for solar energy systems. Depending on your electric company, you can claim additional incentives. For example, Minnesota Power customers can take part in an annual rebate lottery, which offers up to $5,000 for home solar installations. Xcel Energy customers can also qualify for an energy production incentive. Plus, you can combine local solar incentives with the 30% federal tax credit.
Solar Incentives in Minnesota
Minnesota offers several incentives for solar panel systems, summarized in the chart below:
| Minnesota Solar Incentives | Description |
| Solar Energy Sales Tax Exemption | Minnesota exempts solar energy systems from the state’s 6.875% sales tax at the time of purchase. So if you buy an 8 kW solar system for $23,840, you would save $1,639 upfront. |
| Wind and Solar-Electric Systems Property Tax Exemption | Solar panels and wind turbines are exempt from property taxes in Minnesota. For example, if you own a $300,000 home in Minneapolis and solar panels increase its value to $330,000, you are not taxed for the $30,000 value increase. |
| Minnesota Power SolarSense Program | The SolarSense program offers a lottery-based rebate for Minnesota Power customers who install a solar power system. The rebate is calculated based on the estimated electricity output of your solar panels. You get a one-time incentive of $0.29 per kWh of estimated annual energy generation, based on the NREL PVWatts Calculator. The maximum incentive is $5,000 or 60% of your total system costs, whichever is less. So if you install a 6 kW solar system that generates 8,000 kWh of energy per year and you qualify for SolarSense, you would get an incentive of $2,320. |
| Xcel Energy Solar*Rewards | The Solar*Rewards program offers a performance-based incentive for Xcel Energy customers. If you qualify, you get a bonus payment of $0.02 per kWh of solar energy generated over 10 years. The bonus is extra income beyond power bill savings and net metering credits. However, the Solar*Rewards program only accepts a small number of applications and is subject to annual funding limits. |
| Renewable Energy Investment Tax Credit | Solar panels used to power primary or secondary residences qualify for a federal tax credit equal to 30% of your total system costs. You can use the credit to reduce your federal income tax burden for the year you install solar panels. |
Minnesota also offers incentives for energy efficiency measures and other renewable energy sources beyond solar power. The Database of State Incentives for Renewables and Efficiency (DSIRE) has an updated list of energy incentives in Minnesota.
Best Solar Installation Companies in Minnesota
We at the MarketWatch Guides team have reviewed and ranked the best solar companies nationwide and in Minnesota based on industry research and in-depth analysis. Our picks for the top installers in Minnesota include:
- SunPower: Our pick for most experienced
- Blue Raven: Our pick for financing
- Tesla: Our pick for panel design
- All Energy Solar: Our pick for customer experience
All four companies offer solar financing options like solar loans and leases so homeowners can install a solar system at little to no upfront costs.
Are Solar Panels Worth It in Minnesota?
We believe that solar panels can be worth it for Minnesota homeowners. Minnesota offers multiple incentives for home solar systems, combined with a fair share of annual sunshine to boost energy production. Minnesotans who go solar can achieve an attractive return on investment:
- You can expect to pay $17,880 for a 6 kW photovoltaic system in Minnesota.
- After the 30% federal tax credit, the net price of this system drops to $12,516.
If you have a site with favorable sunshine conditions, a 6 kW solar system can generate around 8,000 kWh of energy per year. According to the EIA, Minnesota has an average residential rate of 15.45 cents per kWh. Based on this example, 8,000 kWh of solar electricity represents $1,236 in annual energy savings. At an upfront system cost of $12,516 after incentives, your payback period would be 10.1 years.
A 10-year payback period may seem long, but the lifespan of high-quality solar panels is much longer. The best solar panel brands can last two to three decades and offer 25- to 40-year product warranties to cover performance issues over time.
Plus, you can achieve a shorter payback period if you qualify for the Xcel Energy Solar*Rewards program or the Minnesota Power SolarSense program.
Frequently Asked Questions About Solar Panel Costs in Minnesota
Based on our research, it costs $2.98 per watt to install a solar system in Minnesota. In other words, you can expect to pay $23,840 for an 8 kW solar system or $16,688 after claiming the 30% federal tax credit.
You can avoid an upfront cash purchase by looking for a solar installation company with financing options like a solar loan, solar lease or power purchase agreement (PPA).
According to the EIA Residential Energy Consumption Survey, homes with a size range of 2,000 to 2,499 square feet in the Midwest region have a typical electricity consumption of 10,726 kWh per year. To generate 10,726 kWh with Minnesota’s sunshine conditions, you would likely need a south-facing solar system with a capacity of around 8 kW. Assuming you use 400-watt solar panels, you would need 20 panels to reach the required capacity.
We recommend contacting a professional solar installer to learn more about the number of solar panels needed to power your home.
Not exactly. Solar panels are exempt from sales tax and property taxes in Minnesota, but the state has no tax credit. However, you can claim the 30% federal solar tax credit, a nationwide incentive.
Minnesota homeowners who install solar panels can save more than $1,000 per year in energy bills while reducing their consumption of fossil fuel electricity. In addition to lowering your home’s carbon footprint by generating clean electricity, you can invest in a solar battery to help protect your home against blackouts.
How We Gathered Our Cost Data
Methodology: Our System for Ranking the Best Solar Installers
Leonardo David is an electromechanical engineer, MBA, energy consultant and technical writer. His energy-efficiency and solar consulting experience covers sectors including banking, textile manufacturing, plastics processing, pharmaceutics, education, food processing, real estate and retail. He has also been writing articles about energy and engineering topics since 2015.
Tori Addison is an editor with over five years of experience in the digital marketing industry. Her includes communications and marketing work in the nonprofit, governmental and academic sectors. A journalist by trade, she started her career covering politics and news in New York’s Hudson Valley. Her work included coverage of local and state budgets, federal financial regulations and health care legislation.
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