Resources > Solar incentives and financing in Minnesota

Solar incentives and financing in Minnesota

• Factsheet

April 26, 2024

What type of solar incentives are available?

There are several types of financial incentives available that can help you go solar. Learn more about national solar incentives here.

Solar incentives in Minnesota

Minnesota does not have an active Solar Renewable Energy Credits (SRECs) market. Minnesota’s Renewable Energy Standard requires each electric utility to generate 25% of its electricity from renewable sources by 2025 (Xcel Energy must generate 30% from renewable sources by 2025). 

Xcel Energy Customer Incentives

Residential and small business customers of Xcel Energy are eligible to receive  Xcel’s Solar*Rewards incentive program. Your solar installer applies for these incentives on your behalf as part of the interconnection process. You must limit the size of your array to 120% of annual production to receive Solar Rewards.

There are two types of Solar Rewards incentives:

1. Solar Rewards Production incentives: pays a per kilowatt hour (kWh) incentive for solar production for 10 years. In 2024, this rate was 3 cents a kWH.
2. Solar Rewards Income Qualified incentive: makes an upfront payment after interconnection for customers that income qualifies.

Income-Qualified Residential Systems pays an Up-front Incentive $2.75/ Watt (as of 2024). You demonstrate eligibility by being on any one of these programs: Energy Assistance, Medical Assistance, WIC, EBT or being a Habitat for Humanity or community land trust homeowner.

Non-profits, government entities, and for-profit businesses that serve low-income people can also qualify for this incentive. Check the Xcel web page for incentive rates and how to qualify.

Minneapolis Green Cost Share

This is an incentive that applies to solar group buys in Minneapolis. SUN has helped people get this incentive as part of the Twin City Area Solar Co-ops. One of every five homes or businesses getting the incentive must be in a Minneapolis Green Zone to qualify for the Xcel Solar Rewards Income qualified incentive.

$0.20 kWh for estimated annual production (anyone $0.35 kWh estimated annual production for $40 for permanently affordable housing or homeowners who qualify for the Income income-qualified solar rewards.  Visit Minneapolis Green Cost Share for current rates and details.

Dakota Electric Association

Offers a one-time rebate of $500 when you install solar panels. Learn more on the Dakota Electric Association website.

Solar financing in Minnesota

Solar United Neighbors is neutral regarding financing for solar systems. We don’t endorse or profit from any of the below financing options. You have many options to finance your solar system.

Minnesota PACE

Minnesota passed the Property Assessed Clean Energy (PACE), allowing for 100% financing (including hard and soft costs) with payments rolled into property taxes through a special assessment. Payments are lower than a typical loan with up to 20 years of financing at a fixed interest rate. More importantly, these investments tend to be cash positive with utility savings exceeding payment obligations.

• Southwest Regional Development Commission (SRDC) – To qualify for SRDC PACE financing, your property must be located within the Rural Minnesota Energy Board Region and must be classified as commercial or industrial.
• MinnPACE/St. Paul Port Authority – MinnPACE is the largest provider of commercial PACE financing in Minnesota, serving more than 31 counties and 20 cities.

Other Minnesota solar financing options

Solar Loans from Members Cooperative Credit Union 

Members Cooperative Credit Union offers low rates on 5-, 10-, and 15-year solar loans that allow for two re-amortizations (allows for rebates and tax credits to be applied to the loan to reduce payments).

Energy Bank Loan Programs from Foresight Bank

Foresight Bank has been a local leader in making renewable energy loans and has created an Energy Bank program. Foresight depositors can direct their funds to go towards the Energy Bank deposit program. Funds in these deposit accounts are used exclusively to finance renewable energy and conservation projects. Through this program, Foresight Bank has made millions of dollars in loans for solar, geothermal, wind, and conservation projects. Foresight Bank has locations in Plainview and Rochester, with its Plainview location powered by solar.

Lending Center at Energy and Environment Solar Loans

The Lending Center at the Center for Energy and Environment (CEE) offers financing to residential property owners for installing solar. CEE’s mission is to promote energy efficiency to strengthen the economy while improving the environment. Loans have low fees and are below market rate, and they don’t require the borrower to put any money down. They can finance 100% of the project.

CU Green solar loans through Affinity Plus Credit Union and Blaze Credit Union 

A partnership between these two credit unions offers low-interest loans and closing costs to its members on solar loans. With a CU Green® Home Solar Loan, you can go solar with 100% financing and no down payment. You’ll also get a below-market-rate bonus in recognition of solar’s many benefits.

GreenPenny 

GreenPenny is a Decorah Bank solar loan program and makes most of its loans in Iowa and Minnesota.