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As renewable energy continues to gain momentum across the U.S., many Minnesota homeowners are asking: Does Minnesota pay for solar panels? While the state doesn’t offer free solar panels, Minnesota does provide a range of financial incentives that significantly reduce the cost of installing solar, making it an increasingly attractive investment in 2025.
Solar Incentives in Minnesota: What’s Available?
Minnesota offers several programs that help offset the upfront cost of solar installation:
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Solar*Rewards Program (Xcel Energy): One of the most popular incentives, Solar*Rewards provides annual payments to customers based on the energy their solar systems generate. The program is performance-based and can offer up to $0.07 per kWh over a 10-year period.
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Federal Investment Tax Credit (ITC): Residents can still take advantage of the federal 30% tax credit, which allows homeowners to deduct 30% of the cost of their solar system from their federal taxes.
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Net Metering: Under Minnesota’s net metering policy, homeowners can receive bill credits for excess electricity they send back to the grid, helping them save even more on their utility bills.
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Property Tax Exemption: Solar energy systems in Minnesota are exempt from property tax increases, meaning your home’s value may rise, but your taxes won’t.
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Sales Tax Exemption: Equipment and installation costs are exempt from Minnesota state sales tax, cutting overall project expenses.
Solar Financing Options
To further support adoption, Minnesota residents can access solar loans, leases, and power purchase agreements (PPAs). These financing tools allow homeowners to go solar with little or no upfront cost, paying for the system over time while still saving on electricity.
Community Solar for Renters and Shared Properties
Minnesota is a leader in community solar gardens, allowing renters or those without suitable rooftops to buy a share in a larger solar installation and receive credits on their utility bills. This program makes solar accessible to a broader range of residents.
Final Verdict: Minnesota Supports Solar in Meaningful Ways
While Minnesota may not directly “pay” for solar panels in the literal sense, its robust incentives, utility programs, and tax benefits significantly reduce the cost and boost the return on investment. With strong state and federal support in place, 2025 is an excellent time for Minnesota residents to consider making the switch to solar energy.
Whether you're a homeowner, renter, or business owner, Minnesota’s policies make solar more affordable and accessible—moving the state closer to a clean energy future.
