Solar Incentives & Financing in Minnesota
What are solar incentives?
There are several types of incentives can help you go solar. Click below to learn the basics of what solar incentives are and how they can help you save money.
Solar incentives in Minnesota
Minnesota does not have an active Solar Renewable Energy Credits (SRECs) market, though there are conversations happening now around creating one. Minnesota’s Renewable Energy Standard requires each electric utility to generate 25% of its electricity from renewable sources by 2025 (Xcel Energy must generate 30% from renewable sources by 2025). In addition, Minnesota requires that each electric utility generate 1.5% of its electricity from solar by 2020, with 10% of that from small sources (under 40 kW). To achieve these goals, some utilities are offering incentives for homeowners and businesses to install solar (see below).
Twin Cities Incentives
- Xcel Energy Customers
- Residential and small business customers of Xcel Energy are eligible to apply for Xcel’s Solar*Rewards incentive program.
- To participate, a customer first checks for availability through Xcel. Upon preapproval, the customer then installs a solar PV system up to 20 kW in size. The incentive payment is $0.07/kWh, and participating customers receive these payments for 10 years. In 2017, the Legislature provided more funding to the Solar Rewards program by terminating the Made in Minnesota incentive program, so there will be more funding available for the 2018 program.
- From Xcel: “The qualification for single family homeowner eligibility is based on Low-Income Home Energy Assistance Program (LIHEAP) guidelines or participation in the Low-Income Weatherization Assistance Program (WAP). First, we will verify that you are receiving LIHEAP benefits. If no benefits are noted for your account in our billing system, we will request that you sign a release to provide your information to the Department of Commerce for review against your listing of eligibility for these programs. In addition, verification by the installer will be required stating that income-qualified benefits will be received by you.”
- Solar Rewards for Income-Qualified Customers: $2 Up-front Incentive $/W
- Minneapolis Solar Green Cost Share
- Deadlines for applications are January 1, March 1, May 3, July 2, 2021. One of every 5 homes must qualify for Environmental Justice Rate (Green Zone or Land Trust House).
- $0.20 kWh for estimated annual production (anyone)
- $0.35 kWh for homes in a Minneapolis Green Zone and Land Trust Homes
Duluth Area Incentives
- MN Power Solar Sense: Solar Sense program is in place for four years (2021-2024)
- Program starts on March 1,2021
- Upfront payment based PV Watts estimate of output multiplied by $0.74/kWh.
- Maximum rebate $10,000, and
- Rebate amount 20% of installation costs
- $350,698/2021; $ 175,349/2022; $ 87,675/2023 $ 87,675/2024
- Dakota Electric: Dakota Electric Association’s solar performance program offers a rebate of $0.50
per watt for installed capacity, not to exceed $4,000. Payment of the rebate is
based on the kilowatt-hour (kWh) production from your photovoltaic (PV) system,
as recorded by Dakota Electric’s production meter. The rebate is credited on your
bill monthly at $0.08 per kWh produced up to the rebate amount or 10 years,
whichever occurs first.
- Rochester Public Utilities, Owatonna Public Utilities, and Austin Public Utilities all provide a solar rebate for their customers through a Conserve & $ave program. The rebate is $0.50/watt of nameplate capacity, up to $5,000 (10 kW).
- The City of New Ulm also provides a solar rebate for its customers of $1/watt of nameplate capacity, up to $2,000 for residential, $5,000 for commercial, and $10,000 for industrial. For more information, please contact New Ulm Public Utilities.
St. Louis Park Incentives
- The City of St. Louis Park is now offering the “Solar Sundown” cost share program, where the city will share costs for the installation of rooftop solar on qualifying buildings.
- Cost-sharing rates are as follows:
- Base rate – 4%
- Environmental justice rate – 6%
- There is no cap on funding, but only projects completed in 2021 are eligible
- Learn more about the Solar Sundown application & cost sharing amounts here.
Shakopee Area Incentives
Shakopee Utilities will be offering a $1,000 solar rebate for installed and approved solar systems in 2021.
Solar rebate funding is limited and is available on a first come, first served basis. SPU has allocated funds to rebate sixty (60) solar installations in 2021.
Rebate applications will not be accepted in advance of a signed interconnection agreement and paid application fee. Your SPU engineering contact will assist with the rebate application at the appropriate time in the process.
Solar financing in Minnesota
Solar United Neighbors is neutral when it comes to financing for solar systems. We don’t endorse or profit from any of the below financing options. You have many options to finance your solar system.
Minnesota passed Property Assessed Clean Energy (PACE) enabling legislation in 2010 and two commercial PACE programs are active in the state:
- Southwest Regional Development Commission – In order to qualify for SRDC PACE financing, your property must be located within the Rural Minnesota Energy Board Region and must be classified as commercial or industrial.
- MinnPACE/St. Paul Port Authority – MinnPACE is the largest provider of commercial PACE financing in Minnesota serving more than 31 counties and 20 cities.
Minnesota is currently investigating opening a residential PACE program. Contact us to learn more.
Solar Loans from Members Cooperative Credit Union. Members Cooperative Credit Union offers low rates on 5, 10 and 15 year solar loans that allow for two re-amortizations (allows for rebates and tax credits to be applied to the loan to reduce payments).
Energy Bank Loan Programs from Foresight Bank. Foresight Bank has been a local leader in making loans renewable energy loans and has created an Energy Bank program. Foresight depositors can direct their funds to go towards the Energy Bank deposit program. Funds in the Energy Bank deposit accounts are used exclusively to finance renewable energy and conservation projects. Through this program Foresight Bank has made millions of dollars in loans towards solar, geothermal, wind, and conservation projects. Foresight bank has locations in Plainview and Rochester. Their Plainview location is powered by solar.
The Lending Center at Energy and Environment Solar Loans. The Lending Center at the Center for Energy and Environment (CEE) offers financing to residential property owners for installing solar. CEE has a mission to promote energy efficiency to strengthen the economy while improving the environment. Loans have low fees and are below market rate and don’t require the borrower to put any money down. They can finance 100% of the project.
CU Green solar loans through Affinity Plus Credit Union and HIWAY Credit Union. A partnership between these two credit unions offers low interest loans and closing costs to its members on solar loans. With a CU Green® Home Solar Loan, you can go solar with 100% financing and no down payment. You’ll also get a below-market-rate bonus in recognition of solar’s many benefits.
GreenPenny. GreenPenny is a solar loan program of Decorah Bank and makes most of its loans in Iowa and Minnesota.