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Home solar in Minnesota

Home solar systems under 40 kW still get net metering at about the full retail energy rate, and solar is free of both sales tax and property tax.

Facts checked 2026-11-01, each with a source link below. Programs change often: confirm with your utility, installer and a tax professional before you sign.

17.2¢average home price per kWh (EIA, August 2026)
Strong case for solarStrong net metering law for small systems, no sales or property tax on solar, a battery rebate, a 2023 law that stops HOAs from banning rooftop solar, and an active community solar program; power prices are near the national average.

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Net metering Net metering available

For systems under 40 kW, extra power you send to the grid is paid at the 'average retail utility energy rate' for your customer class (Minn. Stat. 216B.164). Xcel and other investor-owned utilities pay or credit the excess; co-ops and city utilities may instead give kWh credits that expire at the end of each calendar year, and may add a fixed-cost fee backed by a cost study. Source

Solar credits (SRECs) No market

Minnesota has no SREC market. Xcel customers can instead get Solar*Rewards, a 10-year production payment (see incentives). Source

Rebates and incentives

Xcel Energy Solar*Rewards (Minn. Stat. 116C.7792)

Per-kWh payment for 10 years (2026 rate not confirmed); funded at $5 million a year 2026-2035, half reserved for income-eligible homes

Xcel Energy customers; systems up to 40 kW AC and under 120% of yearly use

open performance payment Source

Xcel battery storage incentive

$175 per kWh ($370 per kWh income-qualified), up to $5,000

Xcel customers adding a battery (up to 50 kWh) paired with solar

open rebate Source

Commerce battery storage incentive (outside Xcel)

$250 per kWh, up to $7,000; $1,395,369 left as of 2026-10-07

Customers of other Minnesota utilities; battery up to 50 kWh paired with solar

open rebate Source

Taxes

Property tax: Exempt: solar energy generating systems are exempt from property tax (Minn. Stat. 272.02, subd. 24).
Sales tax: Exempt: solar energy systems are exempt from the 6.875% state sales tax (Minn. Stat. 297A.67, subd. 29); the buyer gives the seller Form ST3. Source

Solar laws

  • Minn. Stat. 500.216, HOA solar access (2023 c 60) (2023). An HOA may not ban roof solar on a single-family home. It may set reasonable rules (licensed installer, nothing above the roof peak) that cut output no more than 10% or add no more than $1,000 to a PV system. An application not denied in writing within 60 days is approved. Source
  • Minn. Stat. 216B.164, net metering (2015). Sets average-retail-rate compensation for systems under 40 kW. No 2025 or 2026 changes are shown in the statute history. Source
  • Melissa Hortman Community Solar Garden Program, Minn. Stat. 216B.1641 (2026 c 44) (2026). Community solar for Xcel customers; new gardens must sign at least 30% of capacity to low- and moderate-income households. Capacity caps of 100 MW a year through 2026, then 80 MW a year 2027-2030. Source

Community solar

Yes: Xcel customers can subscribe to a community solar garden; the state-run program favors low- and moderate-income households.

Timeline

  1. Xcel Solar*Rewards program launches
  2. Omnibus energy law (2023 c 60) adds HOA solar protections and reboots community solar for income-qualified subscribers
  3. Xcel battery storage incentive launches
  4. Federal 30% homeowner tax credit (25D) ends
  5. 2026 community solar garden application window opens (unverified)

Federal tax credits

The 30% federal tax credit for homeowners who buy solar (Section 25D) ended for systems placed in service after December 31, 2025, so buying no longer earns a federal credit. If you lease or sign a power purchase agreement (PPA), the panels belong to a company that may still claim a business credit under federal deadlines that tighten through 2027. Ask your installer whether that savings is in your price.

Sources

Last checked 2026-11-01. Incentives are not guaranteed and can change or run out. Confirm every figure with your utility, installer and a tax professional before you sign. This page is general information, not tax, legal or financial advice.

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