by Jeff Blyskal

Last updated July 2025

Here are the tax credits and other incentives we could identify for the Twin Cities area. Check with your utility company and dsireusa.org for up-to-date info.

Federal tax credit: Until the end of 2025, Uncle Sam will reimburse you 30 percent of what you paid for panels, equipment, storage devices, installation, and permits. Due to recent legislation passed by the Republican-controlled Congress and signed by President Trump, this credit goes away in 2026.

Net metering: If your system produces electricity that you don’t use, it’s pushed onto the grid, your meter spins in reverse, and your utility pays or credits you for it, typically at the full retail price you pay when you buy. But if you are signed up on a time-of-use rate plan, you’ll get charged higher rates when you buy during peak times, but solar-energy producers often get paid lower non-peak rates when they sell.

Even if you produce a lot more electricity than you use, you won’t get rich as a solar-electricity generator: With municipal utilities, any credit surplus you build up over a year expire at the end of your annual billing cycle, and you get paid nothing for that; if you’re with investor-owned Xcel, it will pay you at an “avoided cost” rate, which is lower than the retail rate you pay when you buy electricity.

Solar Renewable Energy Certificates (SRECs): Xcel customers with home solar systems up to 40kW can enroll in the utility’s SolarRewards program and receive annual payments of $0.03 per kilowatt-hour of energy they produce.

Rebates: For qualifying low-income homeowners, Xcel also offers a rebate of $2 per watt of capacity installed.

Dakota Electric offers a performance-based rebate of $0.50 per watt of installed capacity with a maximum payout of $4,000 for up to 8kW of generating capacity. The rebate gets credited to your monthly bill at the rate of $0.08 per kWh produced by your system for 10 years or the $4,000 maximum, whichever comes first.

Property tax exemption: Any increase in your home’s value as a result of installing solar panels is exempt.

State sales tax exemption: You won’t pay sales tax on your system.