Below you’ll find the top solar companies in North Dakota as ranked by us and reviewed by verified solar customers. To learn more about what goes into our “Best Rank” score for each company, visit our How We Rank page. For our full North Dakota Solar Overview, keep reading:
As one of the lowest-performing states in the country for solar output and adoption, North Dakota’s lack of solar-friendly policies and state incentives should come as little surprise. The Roughrider state exhibits some of the cheapest electricity rates in the nation at about 10 cents per kilowatt-hour, making the switch to solar all the less appetizing for residents. But even a state whose sunny day average of 201 (four less than the national average) has a couple of bright spots for solar power.
Read on to learn more about the ins and outs of going solar in North Dakota.
Here's an at-a-glance description of the current benefits and drawbacks of switching to solar in North Dakota:
Although electricity rates in North Dakota rank among some of the most affordable in the country, the relative cost of going solar is still much lower. Dividing the cost of a system over the output across 25 years reveals a price-per-kilowatt-hour rate of 4 cents for solar users, versus 21 cents for non-solar users.
As for upfront costs, a 5 kW system in North Dakota will cost about $20,000, slightly above average in terms of comparable system capacities in other states — but the 30 percent federal solar tax credit will help reduce that upfront cost to $14,000.
Residents of North Dakota have two options to finance their solar PV system in the state: outright purchase and solar loan. Solar lease and power purchase agreement (PPA) options, however, are not currently available in North Dakota.
Assuming homeowners opt for a typical 5 kW system, they could expect to pay about $20,000, but less the federal tax credit, upfront costs will be closer to $14,000. Because electricity prices in the state are so low, yearly of going solar will take somewhat of a hit; homeowners will spend upwards of 17 to 18 years recouping their losses through the solar array’s energy savings, which is three times the payback period as in other states.
That said, assuming a little more than $1,000 in utility savings a year, homeowners will have amassed a little more than $7,000 in profit after 25 years of panel operation, with an average home value increase of about $17,000.
LIke direct purchase, solar loans also qualify homeowners for the federal tax credit, meaning they can secure a $20,000 at zero money down and 15-year terms, and still receive approximately $6,000 in credits from the federal governemenet. With this in mind, savings will begin from the moment the solar energy system is switched on.
However, loan payments will be more expensive than the alternative monthly utility bill, so these savings will decrease each year, starting with about $6,000 in savings after year one. By year five, homeowners will be paying more for solar than they will for traditional electricity; but as utility rates increase year over year, so will the savings. After the loan is paid off after 15 years, borrowers will still have a ways to go before their systems turn a profit; in fact, only the last two to three years will be profitable, producing an average of $2,500 in total net savings of 25 years of system operation.
North Dakota’s solar incentives are almost non-existent. No solar rebate program from utility providers or tax credits from the state make solar energy much more expensive than it could be. North Dakota does not offer a low-income solar program or solar tax exemption; however, the state does provide a property tax exemption, which protects homeowners from paying taxes on the increase in home value their solar energy system provides.
Unfortunately, this property tax exemption only lasts for 5 years.
North Dakota’s solar policies are not much better, due in large part to the leverage given to utility providers. For example, the state’s renewable portfolio standard (RPS) in not only a measly 10 percent by 2015 (and therefore long outdated), but it is also voluntary, meaning the state in no way incentivizes utility providers to make room for solar or other forms of renewable energy like wind and natural gas — nor does it penalize them for failing to do so.
The same goes for its interconnection rules, which vary by utility provider. Interconnection rules are the standards that must be met before a solar panel system can plug into the utility grid. These rules vary widely, and can result in hundreds of dollar of addition cost through home insurance addendums and costly external disconnect switches that must be in place before the system is given the green light.
The state does, however, have one bright spot in terms of solar policy in the form of its statewide Net Metering initiative. Net Metering requires utility companies to credit solar users for their surplus power each month. That said, the policy does come with a few caveats. Net metering only applies to noncommercial systems up to 100 kW in capacity, which will cover most if not all residential solar installation projects. This policy only applies to invester-owned utilities, meaning municipal utilities are exempt. And qualifying utilities are not required to credit solar users at the full retail rate.
Although residential installations account for a significant portion of North Dakota’s total solar portfolio, the state has only installed less than half a megawatt of solar energy as of 2020, or roughly 18 total installations. That’s enough to power about 41 homes. The state hosts only eight solar companies employing just about 200 people.
Interested in a solar quote? Check out the top-ranked solar companies in North Dakota and read reviews from verified solar customers.