Updated October 2026 by Wolf River Electric, a Minnesota solar company based in Isanti.
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Minnesota solar incentives at a glance (October 2026)
| Program | What you get | Who qualifies | Status |
|---|---|---|---|
| Net metering | Bill credits for the power you send to the grid | Home systems under 40 kW, every Minnesota utility | Ongoing |
| Xcel Energy Solar*Rewards | $0.05 per kWh your system makes, for 10 years | Xcel Energy customers (2026 enrollments) | Open, limited yearly capacity |
| Battery incentive, Xcel territory | $175 per kWh, or $370 per kWh if income-qualified, up to $5,000 | Xcel customers adding a battery paired with solar, up to 50 kWh | Open, first come, first served |
| Battery incentive, other utilities | $250 per kWh, up to $7,000 | Customers of co-ops, city utilities and other Minnesota utilities | Open; about $1.4 million left as of October 7, 2026 |
| Sales tax exemption | No Minnesota sales tax on solar equipment | Everyone | Ongoing |
| Property tax exemption | The value solar adds to your home is not taxed | Everyone | Ongoing |
| Federal 25D tax credit | 30% of system cost | Homeowner-owned systems | Ended December 31, 2025 |
| Lease or prepaid lease | The leasing company claims the 30% commercial credit and passes savings to you | Homeowners who lease | Available |
Net metering in Minnesota
Minnesota law requires every utility, including co-ops and city utilities, to offer net metering for systems under 40 kW. When your panels make more power than your home uses, the extra goes to the grid and earns a credit on your bill. Credit rates and monthly fees differ by utility, so we check your utility’s current rules before we size your system.
Xcel Energy Solar*Rewards
If Xcel Energy is your utility, Solar*Rewards pays $0.05 for every kWh your system produces, for 10 years, on 2026 enrollments. Payments are based on production, not on what you send to the grid, so they add up whether you use the power at home or export it. Xcel limits how much capacity it enrolls each year, so we file your application as soon as you sign. Xcel also runs an income-qualified version with higher incentives.
Battery storage incentives
Minnesota pays you to add a home battery to a solar system, through two programs:
- Xcel Energy customers: $175 per kWh of battery capacity, or $370 per kWh for income-qualified customers, with an upfront payment of up to $5,000.
- Customers of other Minnesota utilities: the Department of Commerce pays $250 per kWh, up to $7,000. Commerce reported about $1.4 million left in the program as of October 7, 2026.
Both programs cover batteries paired with solar, up to 50 kWh, and award funds first come, first served. Some co-ops and city utilities add their own battery rebates or rates. See the batteries we install on our home battery backup page.
Sales tax and property tax exemptions
Solar equipment for your home is exempt from Minnesota sales tax, which saves you the tax on the equipment automatically. The value a solar system adds to your home is also exempt from property tax, so going solar does not raise your property tax bill.
What happened to the 30% federal tax credit?
The Residential Clean Energy Credit (Section 25D) let homeowners take 30% of the cost of a solar system off their federal taxes. It ended for systems installed after December 31, 2025. If you buy a system with cash or a loan in 2026, there is no federal credit.
Two paths remain. A solar lease or prepaid lease lets the leasing company claim the 30% commercial credit and pass savings to you in the price; our Solar Price Reset offer is a prepaid lease. And if your system was placed in service in 2025, the credit applies to your 2025 return. Read more in what changed with the solar tax credit.
Example: how the incentives stack on a 10 kW system
This example uses round numbers and assumptions, not a quote. A 10 kW system at the October 2026 Minnesota average of $3.24 per watt costs about $32,400 before incentives. In Minnesota, a well-placed 10 kW system typically makes roughly 12,000 kWh a year.
- Solar*Rewards (Xcel): about 12,000 kWh x $0.05 = about $600 a year, or about $6,000 over 10 years.
- Net metering: the power you use at home and the credits for what you export lower your bill every month.
- Battery incentive (Xcel): a 13.5 kWh battery x $175 = about $2,360 upfront.
- Taxes: no sales tax on the equipment and no property tax on the added value.
Your production depends on your roof, shade and direction. We model it for your address and show the numbers with and without a battery. See typical prices in our Minnesota solar cost guide.
Incentives for businesses and farms
- 30% federal commercial credit (Section 48E): still available for business-owned solar that is placed in service by the end of 2027, or that started construction by July 4, 2026. Bonus credits may apply.
- Accelerated depreciation: businesses can depreciate solar on a 5-year schedule. Ask your accountant how it applies to you.
- PACE financing: long-term financing repaid through a property assessment, for commercial buildings.
- USDA REAP: has offered grants and loan guarantees to farms and rural small businesses. We check the current status for each project.
See commercial solar and farm solar for details.
EV chargers
The federal tax credit for home EV chargers (Section 30C) ended for chargers placed in service after June 30, 2026. Xcel Energy and many Minnesota co-ops still offer EV charger or wiring rebates. We check what your utility offers when we quote your EV charger installation.
Minnesota solar incentive questions
Is there a solar rebate in Minnesota in 2026?
Yes. Xcel customers get Solar*Rewards production payments, and battery incentives of up to $5,000 (Xcel) or $7,000 (other utilities) are open for batteries paired with solar, while funds last.
Can I still get the 30% solar tax credit in Minnesota?
Not if you buy the system in 2026. The homeowner credit ended on December 31, 2025. A lease or prepaid lease is now the main way to get savings tied to the 30% credit.
Do co-op members get net metering in Minnesota?
Yes. Minnesota requires co-ops and city utilities to offer net metering for systems under 40 kW. Their credit rates and fees can differ from Xcel’s.
Will solar raise my property taxes in Minnesota?
No. The value solar adds to your home is exempt from Minnesota property tax.
Get every incentive built into your quote
Wolf River Electric is a Minnesota solar company with its own licensed crews. We apply for Solar*Rewards, the battery incentive and your utility interconnection for you, and we show you the numbers before you decide. Wondering if it pays off? Read are solar panels worth it in Minnesota?
Sources: Minnesota Department of Commerce, On-Site Energy Storage incentive page (funding as of October 7, 2026); Xcel Energy Solar*Rewards; Minnesota Department of Revenue; IRS guidance on Sections 25D, 48E and 30C.
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