MN Solar Battery Incentives: What Homeowners and Businesses Need to Know

The state of Minnesota has reduced electricity generation emissions by 54% since 2005. That’s an undeniably impressive feat, and is a goal that’s largely reliant on an increasing shift towards off-grid power sources and, crucially,

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Energy storage solutions (ESS) like battery storage make it possible for home and business owners to make the most of solar power potential, minimizing solar energy wastage, and working swiftly towards Minnesota’s goal of achieving net-zero emissions by 2050. But these solutions often come at a steep cost to the user.

In areas like Isanti County, MN, a 20kWh storage system (suitable for large homes) can cost as much as $24,000, while

 an enterprise-size 100 kWh storage setup costs as much as $150,000. That’s an expense few people can justify, nevermind the potential savings that energy storage promises. 

Luckily, there is now a range of ESS grants available in Minnesota to help offset these costs and make energy storage worthwhile at every level. Keep on reading to find out what these energy storage incentives are, and how they could help energy storage. your clean energy quest. 

Understanding MN Energy Storage Incentives

As of August 2024, MN energy storage incentives became available for battery systems up to 50 kWh when paired withexisting home or business solar energy systems. These incentives aim to partially cover energy storage installation costs, which, as we’ve discussed, are often high. 

Two programs are available within this initiative, which are administered by either Xcel Energy or the Department of Commerce.

 The programs can be broken down as follows: 

• Xcel Energy customers: In November 2024, Xcel Energy set aside $3,480,000 of incentives, with a low-income cutout for customers inside its service area. These grants sit alongside Xcel Energy’s pre-existing Solar Rewards program, and provide an incentive within 30 business days of adding a new battery storage system to a new or existing solar Interconnection Agreement for your home or small business. Upfront incentives within this program include:
  • $175 per kWh up to a $5,000 maximum  
  • Income qualified $370 per kWh up to a $5,000 maximum.
• Outside Xcel Energy Territory: The Department of Commerce has also set aside approximately $2,160,000 for customers outside of Xcel Energy territory, who may be eligible for: 
  • $250 per kWh up to a $7,000 maximum  
  • Income Qualified Pilot Program $1,000 per kWh up to a $15,000 maximum ($270,000 in available program funds)

The Department of Commerce is also working in collaboration with the Tribal Advisory Council on Energy to develop a program specific to Tribal Nations.

While not everybody will meet the eligibility criteria, it’s well worth looking into the application process for these initiatives if you fall within current usage guidelines and are looking to enhance an existing or new solar system. 

What Happened to the Federal Battery Tax Credit

The federal 25D tax credit that used to cover 30% of a home battery ended on December 31, 2025. Businesses can still use the commercial credit for batteries, and homeowners who lease can get savings tied to it. For most Minnesota homeowners, the state and Xcel Energy battery incentives are now the main help.

Could Your Home or Business Benefit from MN Energy Storage Incentives?

MN energy storage incentives and tax credit initiatives offer undeniable benefits to eligible candidates, but it’s vital to ensure your eligibility and consider which scheme is best suited to your needs, before you enter a lengthy application process. 

Homeowners, in particular, will need to consider which battery incentive applies to their utility, while businesses will need to be sure of MN energy storage eligibility, and cost saving potential, before they go ahead. 

However, if you’re considering energy storage incentives in Minnesota, then these offerings could undeniably be worth your while.

On Xcel Energy’s Time of Use rate in Minnesota, a home battery can also run the house through the 6 pm to 9 pm weekday peak. See Xcel Energy Time of Use hours and rates.