Solar in Minnesota: market, incentives and community solar leadership

Market snapshot

Solar in Minnesota by the numbers

Installed capacity

2,600 MW

Homes powered

340K

Solar share of electricity

4%

Solar jobs in state

4,300

Typical cost per watt

$2.80

US ranking

#13

Minnesota's solar story has been built on community solar gardens, the national leader since 2013 with over 900 MW of community solar operating. Residential is smaller but has grown steadily, concentrated in the Twin Cities metro. The state's climate policy (100 percent carbon-free electricity by 2040) has driven continued growth across all segments.

Rates and net metering

Electric rates and how solar export is credited

Incentives

State and local solar incentives in Minnesota

Beyond the 30 percent federal Residential Clean Energy Credit, which applies in every US state through 2032, Minnesota has these state and local programmes.

Xcel Energy Solar*Rewards

Production incentive for residential solar in Xcel Energy's Minnesota territory. Pays a per-kWh amount for 10 years, typically $0.03 to $0.08 per kWh depending on programme year and queue position. Current programme funding is limited; new applicants join a wait list in some years.

Property-tax exemption

Minnesota exempts the added value of a residential solar system from property-tax assessment. Automatic; no application required.

Sales-tax exemption

Residential solar PV equipment is exempt from Minnesota's 6.875 percent sales tax under Minnesota Statutes 297A.67.

Community Solar Gardens

Minnesota's community solar gardens programme (the national leader) lets residents subscribe to an off-site solar project for a monthly bill credit. Useful for renters, condo owners and homes with unsuitable roofs; typical savings 5 to 15 percent on the electric portion of the bill.

Permits and interconnection

Permits and interconnection

Permit timelines in Minnesota vary by municipality. Minneapolis, St. Paul and the Twin Cities suburbs commonly take 3 to 6 weeks for residential. Rural counties can be faster or slower depending on inspector availability. SolarAPP+ adoption is limited. Interconnection with Xcel Energy typically runs 3 to 6 weeks post-install.

Running a solar company here

Running a solar company in Minnesota

Running a solar company in Minnesota means operating in a market with strong policy support, moderate sun hours (around 4.3 peak sun hours per day), and the national community-solar leader as both competitor and complement. Installers who have grown fastest have knowledge of the Solar*Rewards programme queue, Twin Cities metro permit timelines, and the honest trade-off between rooftop solar and a community solar subscription for customers with unsuitable roofs. Lead costs on Google Search are moderate ($110 to $160 range).

Questions people ask

Solar in Minnesota: FAQ

Does Minnesota have net metering?

Yes, full retail net metering for residential systems up to 40 kW. Credits accrue monthly; excess at year-end is credited at avoided-cost rate. Minnesota's net-metering programme is one of the longest-standing in the US (established 1983).

What is Minnesota's community solar programme?

Minnesota is the national leader in community solar: over 900 MW of community solar gardens operating under the Solar Gardens programme. Residents (and small businesses) can subscribe to a community project for a monthly bill credit, with no equipment installed at home. Useful for renters and homes with unsuitable roofs.

How much does solar cost in Minnesota?

Residential solar in Minnesota averages around $2.80 per watt installed, meaning a typical 7 kW system costs about $19,500 gross. After the 30 percent federal tax credit and (if available) the Xcel Solar*Rewards production incentive, net cost drops meaningfully over the 10-year incentive period.

Is solar worth it in Minnesota?

Yes for most homes with suitable south, east or west roof planes. Minnesota's combination of retail net metering, Solar*Rewards (where available), property and sales tax exemption, and the federal tax credit produces 8 to 11 year payback for most residential installations despite the modest 4.3 peak sun hours per day.