Is solar worth it in Minnesota?
For a typical Minnesota home in 2026, solar is not worth it: about a 16.8-year payback and $14,495 saved over 25 years after paying for the system. Check your own home, because roofs, usage and utilities vary a lot.
- Payback, typical home
- 16.8 yrs6 kW, paying cash
- Electricity price
- 16.2¢per kWh, U.S. 18.0¢
- Solar production
- 1,333kWh per kW per year
- Exports credited at
- RetailFull retail net metering
The numbers for a typical Minnesota home
| Electricity use | 738 kWh a month (Minnesota average) |
|---|---|
| Best-value system | 6 kW, producing 7,999 kWh a year (90% of use) |
| Price | $23,000 at about $3.75/W |
| First-year savings | $1,298 |
| Payback | 16.8 years |
| 25-year net | $14,495 (3.8% a year return) |
| Rate increase assumed | 2.7% a year, from Minnesota's 2015–2025 history |
Paying cash, no federal credit, 5% discount rate, microinverters, $25 per kW a year for maintenance and repairs. Methodology.
Why it comes out this way
- Electricity costs 16.2¢ per kWh, close to the U.S. average of 18.0¢.
- Most utilities credit exported solar at or near the retail rate, so you get full value for midday surplus.
- A typical system here produces about 1,333 kWh per kW per year (ranked #32 of 51).
- There is no federal tax credit for homeowners who buy in 2026, which adds several years to payback compared with 2025.
Net metering and export rules in Minnesota
Full retail net metering. Minnesota requires utilities to net meter systems under 40 kW; monthly excess is paid or credited at the 'average retail utility energy rate', which is close to retail (excludes fixed charges). This applies to IOUs, co-ops and munis, although co-ops/munis may add a monthly DG fee.
Net excess generation compensated at the average retail utility energy rate (Minn. Stat. 216B.164 subd. 3) - roughly 85-100% of the volumetric rate.
- Netting: monthly
- Unused credits: Customer chooses monthly payment or kWh credit rollover; rolled credits cancel annually for some utilities (Xcel: carried forward within calendar year).
- System size limit: 40 kW
- Fixed charges: Co-ops and munis may charge a cost-justified monthly distributed generation fee (often $5-30/month) for new systems; Xcel no solar fee.
- Last major change: 2025 Senate proposal to end net metering for new co-op/muni systems after 2026 was dropped in the special session (June 2025).
- Pending: Possible renewed legislative attempts in 2027 session to move co-op/muni net metering to avoided cost.
Read net metering explained to see why export rules can swing payback by years.
| Utility | Export credit | Notes |
|---|---|---|
| Xcel Energy (Northern States Power-MN) | ~90% of retail | Average retail utility energy rate for NEG; TOU optional. |
| Minnesota Power | ~90% of retail | Statutory average retail rate for <40 kW. |
| Otter Tail Power | ~90% of retail | Statutory average retail rate for <40 kW. |
| Electric cooperatives (e.g., Connexus) | ~85% of retail | Average retail rate but may assess monthly DG fee. |
Solar incentives in Minnesota
The federal 30% Residential Clean Energy Credit ended for systems installed after December 31, 2025. What that means.
| Program | Type | What you get | Status |
|---|---|---|---|
| Xcel Solar*Rewards | performance payment | Production incentive ~ $0.03/kWh for 10 years (standard); funding-limited, first-come. Eligibility: Xcel MN customers, systems <=40 kW | unknown |
| Xcel Solar*Rewards Income-Qualified | low income | Up-front incentive ~$3.00/W (up to ~6 kW) for qualified households. Eligibility: Xcel customers on energy assistance/medical assistance/WIC etc. | unknown |
| Sales tax exemption | sales tax exemption | Solar PV equipment exempt from state sales tax. Eligibility: Residential | active |
| Property tax exemption | property tax exemption | Solar systems exempt from real property tax (land still taxed). Eligibility: Residential | active |
| Solar for Schools / Minnesota Commerce programs | other | State grant programs mostly for public entities. Eligibility: Public buildings | active |
What solar costs in Minnesota
A fair cash price is around $3.75 per watt before incentives. For the 6 kW system that fits a typical home, expect roughly $19,100 to $27,000; smaller systems cost more per watt.
How many homes have solar
- Homes with net-metered solar (2025)
- 26,695
- Share of homes
- 1.0%
- Residential solar capacity
- 248 MW
- Growth over the past year
- +14.3%
Sources: EIA-861 (2025), EIA small-scale solar estimates, LBNL Tracking the Sun and state interconnection data.
Electric utilities in Minnesota
| Utility | Homes served | Price (2026 est.) | Typical use | Typical-home verdict |
|---|---|---|---|---|
| Xcel Energy Minnesota | 1,243,236 | 17.0¢ | 634 kWh/mo | Not worth it |
| Connexus Energy | 136,082 | 14.5¢ | 802 kWh/mo | Not worth it |
| ALLETE | 126,520 | 16.3¢ | 673 kWh/mo | Not worth it |
| Dakota Electric Association | 109,148 | 16.0¢ | 745 kWh/mo | Not worth it |
| East Central Energy | 55,839 | 18.0¢ | 852 kWh/mo | Close call |
| Rochester Public Utilities | 55,728 | 19.0¢ | 581 kWh/mo | Close call |
| Wright-Hennepin Cooperative Electric Association | 54,582 | 15.4¢ | 936 kWh/mo | Not worth it |
| Otter Tail Power | 50,219 | 11.5¢ | 997 kWh/mo | Not worth it |
| Lake Country Power | 47,386 | 18.8¢ | 873 kWh/mo | Close call |
| Crow Wing Cooperative Power & Light Comp | 45,155 | 14.6¢ | 862 kWh/mo | Not worth it |
| Minnesota Valley Electric Cooperative | 43,682 | 14.7¢ | 1,012 kWh/mo | Not worth it |
| Lake Region Electric Cooperative | 27,496 | 13.9¢ | 1,052 kWh/mo | Not worth it |
| Stearns Cooperative Electric Association | 26,275 | 14.4¢ | 1,261 kWh/mo | Not worth it |
| People's Cooperative Services | 21,741 | 17.6¢ | 919 kWh/mo | Close call |
| Beltrami Electric Cooperative | 20,929 | 15.8¢ | 1,157 kWh/mo | Not worth it |
| Shakopee Public Utilities Comm | 18,970 | 16.3¢ | 664 kWh/mo | Not worth it |
| City of Moorhead | 18,556 | 11.8¢ | 844 kWh/mo | Not worth it |
| BENCO Electric Cooperative | 18,500 | 16.5¢ | 978 kWh/mo | Close call |
| Freeborn Mower Electric Cooperative | 17,664 | 15.7¢ | 893 kWh/mo | Not worth it |
| MiEnergy Cooperative | 15,320 | 17.4¢ | 995 kWh/mo | Close call |
| Mille Lacs Energy Cooperative | 14,603 | 17.9¢ | 743 kWh/mo | Close call |
| Runestone Electric Association | 14,349 | 15.1¢ | 1,192 kWh/mo | Not worth it |
| Wild Rice Electric Cooperative | 14,001 | 15.1¢ | 1,237 kWh/mo | Not worth it |
| City of Elk River | 11,935 | 16.7¢ | 761 kWh/mo | Close call |
| City of Anoka | 11,624 | 16.6¢ | 568 kWh/mo | Not worth it |
Solar by city in Minnesota
- Minneapolis16.5-yr payback · Not worth it
- St. Paul16.6-yr payback · Not worth it
- Rochester15.2-yr payback · Close call
- Bloomington16.5-yr payback · Not worth it
- Duluth17.3-yr payback · Not worth it
- Brooklyn Park16.6-yr payback · Not worth it
- Plymouth16.4-yr payback · Not worth it
- Woodbury16.3-yr payback · Close call
- Lakeville16.5-yr payback · Not worth it
- Blaine16.9-yr payback · Not worth it
- Maple Grove16.4-yr payback · Not worth it
- St. Cloud16.4-yr payback · Not worth it
- Eagan16.6-yr payback · Not worth it
- Burnsville16.3-yr payback · Close call
- Coon Rapids16.5-yr payback · Not worth it
- Eden Prairie16.3-yr payback · Close call
- Apple Valley16.5-yr payback · Not worth it
- Edina16.4-yr payback · Not worth it
- Minnetonka16.1-yr payback · Close call
- St. Louis Park16.4-yr payback · Not worth it
- Shakopee16.2-yr payback · Close call
- Mankato16.6-yr payback · Not worth it
- Moorhead24.7-yr payback · Not worth it
- Cottage Grove16.8-yr payback · Not worth it
- Maplewood16.5-yr payback · Not worth it
- Richfield16.4-yr payback · Not worth it
- Inver Grove Heights16.7-yr payback · Not worth it
- Roseville16.4-yr payback · Not worth it
- Andover20.1-yr payback · Not worth it
- Savage16.6-yr payback · Not worth it
- Brooklyn Center16.6-yr payback · Not worth it
- Fridley16.4-yr payback · Not worth it
- Chaska16.5-yr payback · Not worth it
- Oakdale16.5-yr payback · Not worth it
- Ramsey20.1-yr payback · Not worth it
- Prior Lake16.4-yr payback · Not worth it
- Rosemount16.4-yr payback · Not worth it
- Elk River16.4-yr payback · Not worth it
- Shoreview16.5-yr payback · Not worth it
- Owatonna16.4-yr payback · Not worth it
- Austin16.4-yr payback · Not worth it
- Winona16.7-yr payback · Not worth it
- Chanhassen16.2-yr payback · Close call
Protect yourself when buying
- Check the license. DLI residential building contractor license plus Minnesota electrical contractor license (Dept. of Labor and Industry). Look up an installer
- Cancellation rights. 3 business days to cancel many home-solicitation sales. No solar-specific disclosure law verified; AG actively enforcing (2022 sales-company suit; 2024 suit vs GoodLeap, Sunlight, Mosaic, Dividend over ~$35M hidden fees). How to cancel
- HOA and solar access. Yes - 2021 law limits HOA prohibitions of rooftop solar (Minn. Stat. 515B.2-103 et al.).
- Community solar. Yes - Xcel Community Solar Garden program and newer 2023 community solar program.
Installers active in Minnesota
Ranked by installations in public records, not by payment. Volume isn't quality: always check licenses and reviews.
- All Energy Solar 489 installs
- Trunorth Solar 48 installs
- Solar Connection 17 installs
- Energy Concepts Enterprises 11 installs
- Apex Solar 6 installs
- Sundial Solar Nj 5 installs
- Sun Energy Group 1 installs
Questions about solar in Minnesota
Is solar worth it in Minnesota in 2026?
For a typical Minnesota home, solar is not worth it. A 6 kW system costing about $23,000 after state incentives saves about $1,298 in the first year and pays back in about 16.8 years. Your result depends on your roof, usage, utility and price, so run the calculator for your address.
How much do solar panels cost in Minnesota?
A reasonable cash price is around $3.75 per watt before incentives, or roughly $19,100 to $27,000 for a 6 kW system.
Does Minnesota have net metering?
Minnesota requires utilities to net meter systems under 40 kW; monthly excess is paid or credited at the 'average retail utility energy rate', which is close to retail (excludes fixed charges). This applies to IOUs, co-ops and munis, although co-ops/munis may add a monthly DG fee.
Is there a solar tax credit in Minnesota?
The 30% federal credit for homeowners ended for systems installed after 2025. Minnesota does not offer a state income tax credit for solar that we're aware of. Solar may be exempt from property tax.
How do I check a solar installer's license in Minnesota?
DLI residential building contractor license plus Minnesota electrical contractor license (Dept. of Labor and Industry).. Look up any installer with the state's license search at https://ims.dli.mn.gov/ims/.
Policy research current as of October 2026; sources include revisor.mn.gov, minnesotareformer.com, programs.dsireusa.org. Electricity data: EIA, through July 2026. Found something out of date? Tell us.