2024 Commercial Solar Incentives & Rebates Minnesota

Key Minnesota Commercial Solar Incentives & Rebates

Commercial solar incentives and rebates in Minnesota can reduce the upfront cost of installing solar panels for your commercial property up to net zero. Combining the various local incentives available to Minnesota business owners with state and federal tax exemptions, net metering & utility company rebates, you can expect to earn up to $100,000 within the lifespan of the solar system. Keep reading to learn how you can take advantage of all the commercial solar incentives & rebates available to you or speak to our experts today for a 1-1 consultation.

State Solar Tax Exemptions in 2024

There are two state tax exemptions available to Minnesota commercial properties, a sales tax exemption and a property tax exemption. This tax exemption excludes the value of your PV system from being added to your property tax. This means that the state exempts solar power systems from the state’s 6.88% sales tax and this includes Sales and Use Tax Exemption for every renewable Energy Equipment you buy. That’s not all, Minnesotans also enjoy several local rebates and incentives that can be used to cover part or the entirety of the installation cost of a solar system.

Federal Investment

Despite the various local rebates & incentives you can take advantage of in Minnesota, the federal government also offers a hefty investment when you install a solar system. According to current federal laws, Solar systems that are placed in service in 2022 or later and begin construction before 2033 are eligible for a 30% ITC or a 2.75 ¢/kWh PTC if they meet labor requirements issued by the Treasury Department or are under 1 megawatt (MW) in size. This means you can get 30% back in tax credit of whatever you spent on your solar installation when you file your federal returns. If you spend $32,000, you can expect back $9,600. While there is no maximum limit on how much tax discount you can get, if the discount is more than you owe in taxes, you can roll over the excess into the following year.

Net Metering in Minnesota

Net metering is a process or system where you get paid either in credits or cash for every excess energy your solar system sends back to the grid. If you are compensated with credits, these credits can be used to pay for grid electricity you consume when your solar system isn’t generating any power. This can lower your electricity bill substantially based on the size of your solar system.

Minnesota, like many other states, has one of the oldest laws governing net metering. And, as one of its commercial solar incentives Minnesota, businesses of all sizes get to enjoy net metering within the state. Consumers can enjoy credits or cash compensation depending on a pre-agreed contract between you and your utility company. How much you are paid for excess electricity can be found in the utility’s tariff (often called the compensation rate). Paid rates are determined by the following factors within the state:

1. The size of your solar system;
2. Specific costs and retail rates of utility (updated annually); and,
3. Whether you are being served by a cooperative, municipal, or public utility.

It is important to note that IOU utilities will earn credits at the utilities “avoided cost rate”. However, cooperative, municipal, or public utility will have one year to claim credits before they expire.

How to Enroll in Net Metering in MN

Net metering in Minnesota is far better than that of most states. This is because state laws force all companies including investor-owned and municipal utilities, and electric cooperatives to offer some form of net metering. In most states, only IOUs offer net metering.

Here is how to set up net metering for the following utilities:

Great River Energy

Connexus Energy

Dakota Electricity

Xcel Energy

Nobles Cooperative Electric

Note that the enrollment process for net metering in Minnesota depends on the utility company you use. This means that the process differs from utility to utility. However, enrollment for net metering is typically done alongside your solar system installation when you use a proprietary commercial solar solution company like Commercial-Solar.org

Request a Commercial Solar Proposal for Your Business

Additional Local Commercial solar incentives Minnesota: Incentives and Rebates

There are several local commercial incentives you can take advantage of in Minnesota. 2x more than in most states. Each commercial local incentive is available only in certain regions of the states. Which incentive is available to you will depend on your location. Here is a list of additional commercial solar incentives in Minnesota.

Minneapolis Green Cost Share Program: The Green cost share program offers all Minneapolis businesses the opportunity to pay for their solar panel installation. With this program, you can apply up to $50,000, way more than the average installation cost of solar panels. This means that you can spend net zero on your commercial solar panels and installation.

Minnesota Power Solar Program: Businesses in Minneapolis can enjoy a rebate worth $0.56 per kWh of estimated solar energy output and a total of $5000. However, the rebate is capped at $5000 and only has a budget of $87,675 for 2024 plus any dollars rolled over from previous years. This rebate is powered by SolarSence and it uses a lottery system to select participants. Applications open between March 1 – 3, 2024, and how much you get is based on the size of your system.

Dakota Electric Association: Dakota electric also offers its commercial solar incentives for residents and businesses in Dakota. However, this program is only for users of the utility company. So, if you use Dakota Electric, you can take advantage of their $500 commercial solar rebate in Dakota for newly installed PV equipment put on commission.

Rochester Public Association: Rochester Public Utilities makes it more affordable for businesses in the city to install a solar PV system. The utility company similar to Dakota electric offers a $500 rebate for newly installed Photovoltaic systems that are 2.0kW or larger in conjunction with the 2023 ITC. You can apply for this rebate here.

Solar Potential in Minnesota: Incentives and Savings

The Land of 10,000 Lakes is not known for its sunshine like Florida, New York, and Texas but still averages a statewide clean energy of 3.71%, higher than the national average. The Minnesota solar industry has grown significantly in the last decade. And the state currently has 1,917 MW installed, ranking 17th nationally as of Q3 2023. This capacity currently powers over 257,797 homes and accounts for 3.71% of the state’s electricity.

Over the last decade, the state has seen a 42% reduction in solar cost which currently averages at $3.21/W in January 2024. This means that a 10kW commercial system would amount to $32,095, about 16% less than the cost in most states before incentives. When you include the various commercial solar incentives, Minnesota residents are paying close to nothing in upfront cost. This makes the state one of the best places for solar investment. So if you are a business looking to go solar, there is probably not a better time to do so than now. The good news is, with Com-Sol, you can invest 0% in upfront cost and have a fully functional solar system through commercial solar incentive Minnesota.

Energy Efficiency Loan Program

There is a wealth of programs for commercial solar incentives in Minnesota to take advantage of in 2024. One of the energy efficiency loan programs is the Green Small Business Loan program which offers low-interest loan programs up to $300,000 for commercial properties. This loan is administered by the community investment funds for businesses seeking to invest in energy efficiency and/or renewable energy improvements in existing properties. This is made possible by the joint intervention of the U.S. Department of Energy and the Minnesota Department of Commerce through the American Recovery and Reinvestment Act of 2009 (ARRA.

There is also the Rural Minnesota Energy Board(RMEB) and Property Assessed Clean Energy (PACE) which offers commercial, and industrial businesses within the 18 county RMEB territory, the opportunity to finance energy efficiency and renewable energy systems affixed to an eligible property through a special assessment placed on the property’s tax statement.

Understanding the Electric Utility Landscape and Rates in Minnesota

The cost of electricity in Minnesota has gone up by 0.931% over the last few months. However, Minnesotan’s still pay below the national average of 16.21¢/kWh, paying a state-wide average of 14.09¢/kWh for residence and 12.35¢ commercial  as of January, 2024. This is partly due to its diverse energy portfolio as the state boasts of a major investment in solar energy with wind energy being a significant contributor. The land of 10,000 lakes according to the EIA also has a goal to boost solar energy production by 10% by 2030, combining that with the state’s wind energy generation which currently produces three-fourth of the state’s renewable electricity.