Minnesota Solar Panels: Pricing and Incentives

How much do solar panels cost in Minnesota?

Written by Erin Gobler

Edited by Caitlin Ritchie

Last updated 10/25/2022

joe daniel price/Moment/Getty images

Like many states, Minnesota has experienced an increase in solar power installations in recent years across residential, commercial, and community solar. Minnesota ranks in the top half of states for solar power, and the solar industry has created thousands of jobs in the state.

If you live in Minnesota, you might be considering installing residential solar panels. Investing in solar power for your home could help lower your energy costs and reduce your carbon footprint.  Keep reading to learn more about the cost and benefits of solar power and whether it’s right for your energy needs.

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Minnesota solar panel cost

According to Lawrence Berkeley National Laboratory’s Tracking the Sun report, in Minnesota  solar panel system price per watt ranges between $3.02 and $4.12 per watt, with system sizes ranging from 5-kW to 11-kW, resulting in a system cost range between $14,999 and $45,568. The Minnesota median solar panel system price per watt is $3.43, and median system size is 7.7-kW, resulting in a $26,448 median system cost before tax credits and rebates.

Keep in mind your actual costs will depend on many factors, including the size, components, and configuration of your system, as well as local labor and permitting costs. Thanks to the energy savings you’ll experience, you can expect to break even on your solar panels within about 6-9 years. The return on investment for solar panels is based on factors including the total cost of a solar system, your average energy bill, and how much energy your home typically consumes. Solar incentives at the federal and state levels can help to lower the payback period for a home solar system.

Price Per WattSystem Size (kW)Cost
High$4.1211 kW$45,568
Median$3.437.7 kW$26,448
Low$3.025 kW$14,999


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Minnesota solar panel incentives or rebates

There’s no doubt that solar panels are a major investment. Luckily, the federal government and many state and local governments have implemented policies to reduce the cost burden and incentivize solar installations.

First, the federal government offers a 30% solar tax credit for people who purchase solar systems on their primary or secondary residences. This tax credit — called the Residential Clean Energy Credit — can save you thousands on your solar panel purchase.

There are also a couple of initiatives specific to Minnesota. First, the state offers a sales tax exemption, meaning you won’t be charged sales taxes on your solar panel installation. The state also has a net metering policy, which allows homeowners to sell their excess solar power back to the grid for energy credits. Other initiatives include a performance-based rebate program and a lottery-based program called SolarSense.

Why choose Minnesota solar power?

Installing solar panels on your home comes with plenty of benefits, including the ability to reduce your energy costs, create more energy independence, and reduce your home’s environmental footprint.

Lower energy costs

When you invest in solar power, you may be able to save thousands of dollars in energy costs in the long-term. Rather than paying for electricity from the traditional energy grid, your solar panels will produce electricity to power your home. This can lead to a much lower electricity bill because you will be able to rely more on the power that your panels generate.

Establish energy independence

Another benefit of solar panels is they can help you achieve greater energy independence, meaning you will be less vulnerable to price hikes when electricity demand is high in the summer or during extreme weather. Most solar panel owners remain connected to the power grid. If you choose to stay connected to the grid, you will still be susceptible to power outages.

Go green

Investing in solar power can help reduce your home’s carbon footprint. Solar power is a renewable energy source. Traditional electricity emits carbon dioxide into the atmosphere, which contributes to climate change. On the other hand, solar energy production doesn’t release carbon dioxide or other harmful greenhouse gases into the atmosphere. As a result, powering your home with solar energy can reduce your home’s environmental footprint.

Should I buy or lease my solar panels?

Buying and leasing solar panels both have their advantages. For most homeowners, buying solar panels is the most cost-effective option in the long run. First, it allows you to take advantage of the federal tax credit and other savings, which don’t apply if you lease your system. It also provides the greatest energy savings over time and can increase your home’s resale value by $15,000, on average.

Leasing solar panels may not provide quite the same cost savings, but it’s a great option for many people and helps to make solar power more accessible. Leasing solar panels has a lower upfront cost, which is a big incentive for those who can’t afford the upfront cost of buying a solar system. It’s also a good option for people who rent their homes or who could move to a new home sometime in the future.

A third option that’s increasingly popular in Minnesota is a shared solar program. These community solar projects allow participants to share the solar power with other homes without paying the significant upfront cost and or installing solar panels on their homes. Minnesota ranks first in the nation for power generated from community solar projects with a capacity of 789.1 megawatts (MW) of electricity.

Minnesota solar panel companies

There are many Minnesota solar companies that can install solar panels for your home. Finding the right solar panel installer begins with understanding your energy needs and what you hope to get out of a solar system for your home. You can use the resources on this page to learn more about solar power in Minnesota. Once you’re ready, you can confidently search for a Minnesota solar installer in your area.

The history of solar power in Minnesota

Like many states, Minnesota implemented its first solar policies in the late 1970s when it passed its solar easement and rights laws. Policies that followed in the next decades included the state’s net metering policy, solar grants and financial incentives, and the repeatable portfolio standard. Most recently, the state’s largest utility committed to producing 100% carbon-free electricity by 2050.

Minnesota’s investments into solar power have certainly paid off. Today, the state ranks 18th in the nation for solar energy generation. Solar power accounts for 2% of the state’s total electricity production, but that percentage could increase in the coming years. Minnesota has experienced an increase in solar installations across the board. The biggest jump in solar production has come from an increase in community solar projects.

Important solar installation factors to consider

Solar power can be an excellent investment, but there are a few factors that consumers should consider before installing them on your home:

  1. According to the Department of Energy, solar panels are most effective on roofs that are south-facing with slopes between 15 and 40 degrees and those that won’t need to be replaced in the near future.
  2. Solar panels require sunlight to produce energy, meaning they are most effective if your home gets a lot of sunlight. Consider the weather patterns in your state and whether there’s anything obstructing the sun from your home.
  3. If your neighborhood has an HOA, there may be certain rules or approval steps you will need to follow before installing your solar panels. There may be limits to the size of the solar panels you can install, or you may need to get HOA approval upfront.

Solar power FAQs

  • The cost of solar panels depends on the size, configuration, and components in your system, as well as local labor and permitting costs. On average, residential solar systems cost between $15,000 and $25,000.

  • Solar panels can be an excellent investment, but they aren’t right for everyone. They may not be worth the cost for those whose homes don’t get a lot of sunlight or consumers who will sell their home before the payback period ends. However, a home solar system can be a great investment if it aligns with your energy needs because it can lower your energy costs and increase your home’s value.

  • The amount you can save by investing in solar depends on your current energy usage and how much solar power your panels produce. Minnesota residents paid an average electricity bill of about $98.50 per month in December 2021. As a result, you could save up to $1,320 per year, not including other financial incentives and the increase in your home’s value.

  • There are a variety of solar panel installers operating in Minnesota. Finding the best solar company in your area will depend on the size and type of system you want, your budget, and your installation timeline. Use the SaveOnEnergy solar resources to learn more about solar power in Minnesota and confidently find a good solar panel installer.

  • Unlike traditional power sources like coal or oil, solar energy generation doesn’t emit carbon dioxide into the atmosphere when it is converted into electricity. Greenhouse gasses like carbon dioxide have been linked to climate change and are considered harmful for the environment. Solar energy is a green, renewable power source that does not release carbon dioxide into the environment, making it a better environmental resource.

Solar energy by state