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South Dakota

With renewable energy policies and incentives, South Dakota is a good state for adopting solar power. The state experiences significant sunlight throughout the year, making it a viable option for both residential and commercial solar installations. Embracing solar energy not only reduces electricity bills but also contributes to a cleaner, more sustainable environment. With supportive policies and incentives, there’s never been a better time to go solar in South Dakota. Enjoy cost savings, energy independence, and environmental benefits by switching to solar today. Let Wolf River Electric guide you every step of the way!

Federal Investment Tax Credit – 30%

The Residential Clean Energy Credit equals 30% of the costs of new, qualified clean energy property for your home installed anytime from 2022 through 2032. The credit percentage rate phases down to 26 percent for property placed in service in 2033 and 22 percent for property placed in service in 2034. You may be able to take the credit if you made energy-saving improvements to your home located in the United States.

The credit is nonrefundable, so the credit amount you receive can’t exceed the amount you owe in tax. You can carry forward any excess unused credit, though, and apply it to reduce the tax you owe in future years. Do not include interest paid, including loan origination fees.

The credit has no annual or lifetime dollar limit except for credit limits for fuel cell property. You can claim the annual credit every year that you install eligible property until the credit begins to phase out in 2033.

Credit limits for fuel cell property

Fuel cell property is limited to $500 for each half kilowatt of capacity. If more than one person lives in the home, the combined credit for all residents can’t exceed $1,667 for each half-kilowatt of fuel cell capacity.

The image shows a series of three circular progress bars connected by arrows, illustrating a percentage decrease over three time periods. The first circle represents the percentage for the years 2022-2023 at 30%. The second circle represents the percentage in 2023 at 26%. The third circle represents the percentage in 2024 at 22%.
State Incentives*

South Dakota offers several incentives to encourage the adoption of solar power as outlined below. Additionally, some utilities in South Dakota offer extra rebates for solar installations, further reducing the cost of going solar. Check with your local utility provider for specific programs and eligibility requirements.

South Dakota offers a property tax exemption for solar energy systems. The state exempts the first $50,000 or 70% of the assessed value of a solar system (whichever is greater) from property taxes for four years. This significantly reduces the financial burden of adding solar panels to your property.

Although South Dakota does not have a state-mandated net metering policy, some utility companies offer net metering programs. These programs allow homeowners to receive credits on their utility bills for any excess electricity their solar panels generate and send back to the grid.

Some utilities in South Dakota offer additional rebates and incentives for solar installations. These can vary based on location and the specific utility provider​.

Financing Options

Financing options for solar energy in South Dakota are diverse, allowing homeowners and businesses to choose the best fit for their financial situation. From financing to solar loans, green energy loans, home equity loans, and manufacturer financing, there are many ways to make solar energy affordable and accessible. Explore these options and consult with a solar installer to determine the best financing strategy for your needs.

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*Ask your representative about which incentive you’re eligible to receive. Please consult a tax advisor on your ability to claim these nonrefundable tax credits.