Is solar worth it in North Dakota?
For a typical North Dakota home in 2026, solar is not worth it: about a 20.3-year payback and $4,268 saved over 25 years after paying for the system. Check your own home, because roofs, usage and utilities vary a lot.
- Payback, typical home
- 20.3 yrs4.9 kW, paying cash
- Electricity price
- 12.3¢per kWh, U.S. 18.0¢
- Solar production
- 1,322kWh per kW per year
- Exports credited at
- ~24%Avoided-cost export credit
The numbers for a typical North Dakota home
| Electricity use | 1,072 kWh a month (North Dakota average) |
|---|---|
| Best-value system | 4.9 kW, producing 6,478 kWh a year (50% of use) |
| Price | $15,750 at about $3.00/W |
| First-year savings | $798 |
| Payback | 20.3 years |
| 25-year net | $4,268 (1.8% a year return) |
| Rate increase assumed | 2.1% a year, from North Dakota'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 is cheap: 12.3¢ per kWh, 32% below the U.S. average (18.0¢), so each solar kWh saves less.
- Exported solar is typically credited at about 24% of retail, so systems pay best when sized for what you use yourself.
- A typical system here produces about 1,322 kWh per kW per year (ranked #36 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 North Dakota
Avoided-cost export credit. North Dakota's net metering rule only covers the three investor-owned utilities (Xcel, Otter Tail, Montana-Dakota) for systems up to 100 kW. Solar you use at home offsets retail power, but extra energy left over each month is bought at the utility's low avoided-cost rate (a few cents per kWh).
Monthly net excess generation (NEG) paid/credited at the utility's avoided energy cost, updated annually in PSC filings (roughly 2-4 c/kWh).
- Netting: monthly
- Unused credits: No kWh rollover at retail; monthly NEG is paid or credited at avoided cost.
- System size limit: 100 kW
- Fixed charges: Standard residential customer charge; Xcel's ND Net Energy Billing Service includes a meter charge updated annually. Co-ops may impose DG fees.
- Last major change: PSC rule (N.D. Admin. Code 69-09-07) adopted 1991; annual avoided-cost updates (e.g., Xcel case PU-26-18, Jan 2026; Otter Tail rider PU-26-51 effective 2026-06-01).
Read net metering explained to see why export rules can swing payback by years.
| Utility | Export credit | Notes |
|---|---|---|
| Xcel Energy (Northern States Power - Minnesota, ND service) | Avoided-cost export credit | Net Energy Billing Service for systems <=100 kW; NEG at 2026 avoided energy cost (value not verified). |
| Otter Tail Power | Avoided-cost export credit | Small Power Producer Rider (<=1,000 kW QFs) with avoided cost plus REC/SREC components; rates effective 2026-06-01. |
| Montana-Dakota Utilities | Avoided-cost export credit | Subject to the same PSC net metering rule; 2026 rate not verified. |
Solar incentives in North Dakota
The federal 30% Residential Clean Energy Credit ended for systems installed after December 31, 2025. What that means.
| Program | Type | What you get | Status |
|---|---|---|---|
| Property tax exemption for solar systems | property tax exemption | Solar energy systems are exempt from property taxes for five years after installation (N.D.C.C. 57-02-08). Eligibility: Residential and commercial solar. | unknown |
What solar costs in North Dakota
A fair cash price is around $3.00 per watt before incentives. For the 4.9 kW system that fits a typical home, expect roughly $12,500 to $17,600; smaller systems cost more per watt.
How many homes have solar
- Homes with net-metered solar (2025)
- 89
- Share of homes
- 0.0%
- Residential solar capacity
- 2 MW
- Growth over the past year
- +30.8%
Sources: EIA-861 (2025), EIA small-scale solar estimates, LBNL Tracking the Sun and state interconnection data.
Electric utilities in North Dakota
| Utility | Homes served | Price (2026 est.) | Typical use | Typical-home verdict |
|---|---|---|---|---|
| Xcel Energy Minnesota | 83,434 | 17.0¢ | 634 kWh/mo | Not worth it |
| Montana-Dakota Utilities | 79,711 | 12.0¢ | 822 kWh/mo | Not worth it |
| Cass County Electric Cooperative | 52,785 | 13.2¢ | 1,034 kWh/mo | Not worth it |
| Otter Tail Power | 45,437 | 11.5¢ | 997 kWh/mo | Not worth it |
| Nodak Electric Cooperative | 20,715 | 13.2¢ | 1,538 kWh/mo | Not worth it |
| Capital Electric Cooperative | 19,650 | 14.1¢ | 1,032 kWh/mo | Not worth it |
| Verendrye Electric Cooperative | 14,357 | 11.7¢ | 1,337 kWh/mo | Not worth it |
| Mountrail-Williams Electric Cooperative | 11,485 | 7.6¢ | 1,493 kWh/mo | Not worth it |
| Roughrider Electric Cooperativ | 11,246 | 11.3¢ | 1,258 kWh/mo | Not worth it |
| Northern Plains Electric Cooperative | 10,472 | 11.3¢ | 1,875 kWh/mo | Not worth it |
| North Central Electric Cooperative | 6,088 | 11.4¢ | 1,918 kWh/mo | Not worth it |
| Dakota Valley Electric Cooperative | 5,790 | 13.3¢ | 1,816 kWh/mo | Not worth it |
| McKenzie Electric Cooperative | 5,367 | 8.4¢ | 1,802 kWh/mo | Not worth it |
Solar by city in North Dakota
Protect yourself when buying
- Check the license. Electrical work requires an ND State Electrical Board license (electrical contractor/master electrician); general contractor license from the Secretary of State required for projects over $4,000. Look up an installer
- Cancellation rights. Federal law gives you 3 business days to cancel most door-to-door sales over $25. How to cancel
- HOA and solar access. Voluntary solar easements are recognized (N.D.C.C. 47-05-01.1); no statute limiting HOA bans on solar.
- Community solar. No statewide community solar program; some co-ops offer small subscription programs.
Questions about solar in North Dakota
Is solar worth it in North Dakota in 2026?
For a typical North Dakota home, solar is not worth it. A 4.9 kW system costing about $15,750 after state incentives saves about $798 in the first year and pays back in about 20.3 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 North Dakota?
A reasonable cash price is around $3.00 per watt before incentives, or roughly $12,500 to $17,600 for a 4.9 kW system.
Does North Dakota have net metering?
North Dakota's net metering rule only covers the three investor-owned utilities (Xcel, Otter Tail, Montana-Dakota) for systems up to 100 kW. Solar you use at home offsets retail power, but extra energy left over each month is bought at the utility's low avoided-cost rate (a few cents per kWh).
Is there a solar tax credit in North Dakota?
The 30% federal credit for homeowners ended for systems installed after 2025. North Dakota 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 North Dakota?
Electrical work requires an ND State Electrical Board license (electrical contractor/master electrician); general contractor license from the Secretary of State required for projects over $4,000.. Look up any installer with the state's license search at https://www.ndseb.com/.
Policy research current as of October 2026; sources include programs.dsireusa.org, psc.nd.gov, psc.nd.gov. Electricity data: EIA, through July 2026. Found something out of date? Tell us.