Solar Panels in South Dakota | 2022 Cost and Incentives | SaveOnEnergy®

South Dakota Solar Panels: Pricing and Incentives

How much do solar panels cost in South Dakota?

home with solar panels on the roof


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Solar power in South Dakota

South Dakota is a sunny state with a great capacity for generating solar energy. Ranked 50th in U.S. solar energy production, the industry in South Dakota has been slow to take off but is growing, with over 60 customers already investing in solar power and enough energy generated to power about 250 homes.

The state has already invested millions of dollars in solar, and more solar facilities are set to be built in the future. Two permits for the construction of solar facilities were issued in 2020. These projects have the capacity to generate approximately 238MW of energy combined. 

South Dakota solar panel cost

Solar panels can be a great investment for South Dakota homeowners. As solar technology has improved, overall costs for residential systems have decreased about 4% in the last five years. 

However, be sure to consider certain factors that have the potential to increase your total cost of solar installation, such as your location, your roof’s condition, and your energy consumption. Larger systems and higher-quality equipment can also raise the total price, but keep in mind that only 30% of the total cost comes from the materials. Permitting, wiring, inspections, and labor can drive up the remaining installation costs, as well. 

The average cost per watt of installing a residential solar system is $3.82, equaling a total average cost of $24,742 up-front. Energy companies read solar costs in dollars per watt. The initial cost is typically recouped in monthly energy savings within six to nine years. 

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South Dakota solar panel incentives or rebates

To help offset the total cost of installing a residential solar system, you can apply for federal tax credits and state incentives. To encourage the expansion of the renewable energy industry, the government’s new Inflation Reduction Act began offering the Residential Clean Energy Credit, which means that homeowners who buy and install solar power in their homes through 2032 can receive a 30% credit on their federal taxes. This credit can even be applied to solar system purchases made earlier in 2022, before the act was signed.

South Dakota also offers a property tax credit for homeowners who have installed solar panels. The property tax allows for the exemption of real property tax on the first $50,000 or 70% (whichever is greater) of the assessed value of the solar system. Unfortunately, South Dakota does not have regulated net metering (the ability to sell back excess energy to the power grid). Although some solar companies have the option of offering this incentive, it is currently not a requirement.

Why choose South Dakota solar power?

Lower energy costs 

South Dakota residential solar systems can help lower your monthly utility costs. Even though there is an initial investment, many solar owners experience an average payback period of six to nine years. In other words, your solar panels can eventually pay for themselves. After the payback period, you will still enjoy monthly savings on your bill. Of course, the amount you can save will depend on the size of your solar system and your average energy consumption. 

Establish energy independence

For some homeowners, establishing energy independence is a huge benefit to solar energy. Personal solar systems also help to decrease dependency on imported fossil fuels. It is not uncommon for there to be periods of high demand on a power grid, which can cause rates and energy availability to fluctuate. With solar panels, you do not have to rely solely on the power grid and instead supply your own power. If you choose to install a battery to your solar system, you do not even have to worry about losing power during a power outage.

Go green

Investing in renewable energy has a positive impact on the environment. Solar energy is a great source of renewable energy and an easy way for homeowners to go green, since solar systems tend to be quieter and do not emit greenhouse gasses into the air. Residential and commercial solar systems are fairly non-invasive since they get installed on existing infrastructure. Solar energy can even help mitigate climate change and water scarcity. Studies suggest that solar energy can even reduce pollution-related healthcare costs.

Should I buy or lease my solar panels in South Dakota?

South Dakota homeowners who want solar energy have two main purchasing options: buying and leasing. If you can afford the initial cost of installation, buying up-front yields the best return on your investment. This is because the cost of installation can be recovered in savings from monthly utility bills. 

Buying with cash or a loan can also qualify you for federal tax credits and state incentives. Homeowners who install a solar system will see their home’s resale value increase by up to $15,000. Buying outright also gives you the flexibility to select exactly what you need for your home. In some areas, community solar sharing may also be a viable option.

Leasing is a great option for South Dakota homeowners who cannot afford the initial investment of installation. In a solar lease, the solar company owns the solar panels and charges the  homeowner or renter a set monthly fee regardless of energy generation. Since you are still self-generating power, your energy bills are usually still smaller. About 28% of residential solar systems are currently funded through solar leases.

One downside to leasing is that you will not qualify for any tax incentives. You will also need to find a buyer willing to take over your lease if you sell your home because leases can be quite lengthy.

South Dakota solar panel companies

Often, switching to solar energy can be beneficial and cost-effective. However, choosing the wrong system for your home or the wrong installer can cost you more in the long-run. Currently, there are a limited number of installation companies in South Dakota, but as the industry expands, more may follow.

SaveOnEnergy’s independent energy market can help you choose the best solar panel company for your needs and budget. Simply fill out this form or call the number on your screen to connect with an energy expert and find solar installers near you. Also spend some time researching the solar industry before making any decision. SaveOnEnergy provides numerous resources for consumers interested in solar power.

Important solar installation factors to consider

It is important to remember that not every single home has the capacity to adequately supply solar energy. There are many factors in South Dakota that can impact the effectiveness of solar panels, such as: 

  • Your roof: The size, condition, shape, age, and even slope of your roof can impact the effectiveness of installed solar panels. Roofs that slope between 15 and 40 degrees and face south are best positioned for solar energy.
  • Your climate: Even though solar technology can operate in any climate, you still need sufficient sunlight. South Dakota actually has great potential for solar power thanks to an average of over 200 sunny days each year.
  • Your neighborhood: Some HOAs may limit the changes you can make to the exterior of your home. Before signing any contracts, be sure to check for any neighborhood regulations. Your solar installer can help you navigate this.

Solar power FAQs

How much would solar cost in South Dakota? Expand / Collapse Toggle

Although prices have dropped in the last few years, the average cost to install a solar system is $3.82 per watt. That means residential solar can cost an average of $24,742. Factors like roof condition, home size, and equipment brands can increase costs. There is also an added cost to install a battery with your system.

Is solar power a good investment in South Dakota? Expand / Collapse Toggle

Solar energy may not be a good investment for every South Dakota homeowner. Comparing the costs and benefits of installation may help determine if it is a good investment. Before installing solar panels, check whether your roof is capable of producing enough energy. You should also consider the weather and personal energy usage. In some cases, you could recoup the price of installation in monthly bill savings alone.

How much could I save by investing in solar? Expand / Collapse Toggle

The amount you could save by investing in solar energy will depend on your home’s size and total energy consumption. Homeowners who need a larger system and use more energy will take longer to recover their installment cost in monthly bill savings. Homes that produce excess energy can save even more by selling the extra energy back to the power grid through net metering, if allowed.

Where can I find a good solar panel installer in South Dakota? Expand / Collapse Toggle

There is currently a small selection of solar companies in South Dakota. Before signing a contract, do your research on which company is best suited for your individual needs. Consider whether the company provides great customer service, has satisfactory business experience, and offers a warranty on their work. SaveOnEnergy can help you find top installers quickly and easily — just complete this form or call the number on your screen to get started. 

How does solar power help the environment? Expand / Collapse Toggle

If you wish to reduce your carbon footprint, solar energy is a great renewable energy source. While fossil fuels produce pollutants, solar plants do not emit greenhouse gasses into the atmosphere. Installing solar panels on your roof also tends to be non-invasive. Plus, sunshine is free and consistently available in many areas.