Top 5 Solar Companies in minnesota

Despite receiving relatively low amounts of sunlight each year, Minnesota is consistently one of the nation’s leaders in producing solar energy. Even without a state-level tax credit, residents of the North Star State can enjoy a number of solar-friendly policies and solar incentives designed to make solar power both accessible and affordable. 

• Pros and Cons of Going Solar in Minnesota
• Cost of Solar in Minnesota
• Minnesota Solar Financing Options
• Minnesota Solar Incentives
• Minnesota Solar Policy Information
• Minnesota Solar Statistics

Read on to learn more about the ins and outs of going solar in Minnesota.

Pros and Cons of Going Solar in Minnesota

Here's an at-a-glance description of the current benefits and drawbacks of switching to solar in Minnesota:

Benefits of Going Solar in Minnesota:

• Statewide Net Metering
• Solar Rebate Programs
• Tax Exemptions
• Multiple Financing Options

Drawbacks of Going Solar in Minnesota:

• Affordable Utility Rates
• No State Tax Credit
• Solid RPS

Cost of Solar in Minnesota

The levelized cost of solar, meaning the total cost of solar energy divided by the total solar output over 25 years, is about 5 cents per kilowatt-hour, which is significantly lower than the 21 cents per kWh that non-solar utility customers will end up paying over that same time period.

As for projected upfront costs, they are competitive with most other states: a typical 7.5 kW system can go for as much as $22,000 — but systems of varying capacity and efficiency could go as low as just below $15,000 – $18,000. Thankfully, the 30 percent federal solar tax credit will dramatically reduce those upfront costs.

Minnesota Solar Financing Options

Minnesota is one of the few states in the nation to offer customers four options to help them finance their solar PV system: cash purchase, solar loan, solar lease, and power purchase agreement (PPA).

Cash Purchase

Cash purchase of a solar panel system in Minnesota will lead to the fastest and greatest returns available to solar customers. Despite the significant upfront investment (about $22,000 for a 7.5 kW system), the federal government will credit solar owners 30 percent of the total upfront costs, or in our scenario, a little more than $6,500. Additional state-level rebates will drive the cost down even further.

The great news is that even with a huge upfront investment, a solar panel system can pay for itself in as little as six years, leaving nearly two decades of solar energy system lifespan to net positive cash flow. Some estimates put total net earnings over 25 years as high as $29,000. Home value, meanwhile will increase by as much as $14,000.

Solar Loan

Solar loans lead to solar panel system ownership and therefore qualify borrowers for the federal solar tax credit and other available rebates. Solar loans also come with the added benefit of charging customers zero dollars upfront for their system, meaning they can enjoy the savings that come from solar energy right away.

Customers that qualify for a solar loan or home-equity line of credit (HELOC) should easily secure a 15-year repayment term on a fixed 4 percent APR. Assuming those terms, customers will enjoy massive savings once the 15 years of the loan are up, savings amounting to about $21,000 or so over the decade following the satisfaction of the loan.

Solar Lease

Solar leases essentially allow customers to rent their solar energy system without having to pay for installation or maintenance. While specific terms will vary from company to company, most of the time, customers should expect their lease payments to be less than what they would pay each month on their utility bill.

Power Purchase Agreement (PPA)

Much like the solar lease option, the PPA gives customers low-cost access to solar energy without the burden of ownership. Where it differs from solar leases is in what customers are paying for: for a solar lease, the system itself; for a PPA, the power that system produces.

In Minnesota, customers could receive a zero-money down, 20-year PPA contract. Because of the state’s average electricity rates, PPA customers may not be saving quite as much as they would in other states (on average, a little more than $200 each year); but as utility providers continue to increase rates by 3 to 4 percent each year, those savings will improve over 20 years, amounting to as much as $8,000 after 20 years.

Minnesota Solar Incentives

Although the state does not currently have a state-level tax credit in place, Minnesota offers myriad solar incentives for customers that are either statewide, or can vary among utility providers:

Solar Rebate Programs

Minnesota’s leading utility providers each have their own solar rebate program in which they will credit solar customers a set rate per kW of solar energy produced. This rate can vary between $500 to $1,500 per kW depending on the utility provider, with caps as low as $2,000 and as high as $5,000. Some utility providers, like Minnesota Power, credits customers based on their estimated first-year production at 83 cents per kWh, with no cap.

Tax Exemptions

Minnesota is one of the few states to attach tax-exempt status to solar panel systems in two categories:

• Sales Tax — Solar owners will not need to pay any additional sales tax on solar panels, mounting equipment, solar inverters, etc.
• Property Tax — Solar owners will also be exempt from paying any property taxes that would be otherwise incurred by whatever increase in property value the solar panel system elicits. This can result in hundreds, if not thousands of dollars over time.

Minnesota Solar Policy Information

Despite the state’s fairly competitive electricity rates, residents in Minnesota will enjoy a number of favorable solar policies that make solar power easier to invest in:

Renewable Portfolio Standard (RPS)

A state’s renewable portfolio standard, or RPS, represents its commitment to renewable energy. The RPS comes in two parts: first, the amount of total energy output attributed to renewable sources like solar, wind power, and natural gas; and second, the year by which that goal is to be achieved. Stiff penalties are assigned to utility providers that fail to meet this standard. In Minnesota’s case, the RPS for the state’s largest utility provider, Xcel, is 31.5 percent by 2020. For all over companies, that standard is 26.5 percent by 2025.

Party to that RPS is Minnesota’s solar carve-out of 1.5 percent, meaning at least 1.5 percent of all energy output must be provided by solar installation projects, which, as of 2020, the state has more than doubled with 3.37 percent (nice job, Minnesota).

Net Metering

Minnesota’s statewide net metering policy mandates that all utility companies credit solar users for the surplus energy their solar panel systems contribute to the power grid. This policy applies to all solar installations under 40 kW in capacity, or essentially all residential solar panel systems.

Interconnection Rules

The state’s interconnection rules also apply statewide. These rules enumerate the prerequisites that must be met prior to a solar panel system being plugged into the utility grid. Minnesota’s interconnection rules require homeowners to purchase additional insurance for their solar array systems and to equip these systems with an external power switch. Several states do not require these additional measures, but others call for even more red tape prior to going solar.

Minnesota Solar Statistics

Solar adoption in Minnesota peaked in 2017 with more than 400 megawatts of commercial, utility, and residential solar power being installed in that year alone. Though the majority of the state’s solar output is in the form of commercial and utility solar farm projects, residential solar installations have remained steady in the state since 2015. 

Currently, the state’s more than 1,400 mW of solar energy is sending sustainable, clean energy to more than 200,000 homes. The state plays host to nearly 150 solar installers and manufacturers accounting for well over 4,000 solar jobs.

Interested in a solar quote? Check out the top-ranked solar companies in Minnesota and read reviews from verified solar customers.

Sources

• solarpowerrocks.com/minnesota/
• solarreviews.com/solar-panels/minnesota
• seia.org/state-solar-policy/minnesota-solar
• solar-nation.org/minnesota
• solaractionalliance.org/solar-panel-installation/minnesota/

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