It’s a New Year and that means New Year’s Resolutions! Many people choose these months to start making improvements in their lives, whether it’s to eat healthier, find a new job, save more money for retirement, or another goal.
Another New Year’s Resolution that’s been gaining traction is for people to reduce their carbon footprint. One major way to make an big impact is to reduce fossil consumption through solar panels, electric vehicles, or both!
Unlike losing weight or finding a new job, though, there are federal, state, and local incentives available to help make these goals more achievable. Though significant credits, rebates, and incentive programs can help bring solar to your home or business, most of them are limited by time, funding, capacity, or all of the above!
The good news is that it’s a new year, many of the funds have been replenished - and they can be stacked together for big savings!
Minnesota local solar incentives
Though most people know that Minnesota has renewable energy and carbon emission targets that the state would like to reach by 2025, 2030, 2050, and beyond, it’s not as common knowledge that many Minnesota cities have such goals as well.
The Minneapolis Climate Action Plan is a roadmap to reducing the city's climate impact, and it includes objectives to reduce greenhouse gas emissions by 30 percent and to generate 10 percent of electricity from local renewable sources by 2025. The Minneapolis Green Cost Share program helps the city to achieve those goals by offering incentives to residents and businesses to switch to solar energy.
In 2018, the St. Louis Park City Council passed a Climate Action Plan with the ambitious goal of achieving 100 percent renewable energy by 2030 and carbon neutrality by 2040. For the second year in a row, the Saint Louis Park Solar Sundown program is poised to help this city meet those targets through encouraging residents and businesses to install rooftop solar.
Hopkins, Chaska, and other cities offer solar incentives, though the amounts and requirements differ.
Minnesota utility company solar rebates
Much of the burden for transferring from fossil-fuel energy to renewable sources rests on Minnesota energy companies. `
Xcel Energy’s Solar*Rewards pays extra rewards based on a solar energy system’s total solar production in a year. Dakota Electric Association and Rochester Public Utilities offer $500 rebates for solar system installation. Shakopee Public Utilities is offering up to $1,000 solar incentive.
Part of the reason why so many utilities in Minnesota offer solar incentives has to do with net metering. Net metering is the process by which extra electricity produced by a solar power system is sent into the utility grid in exchange for credits on the energy bill for later use, such as evenings and mid-winters when days are shorter. All residential-sized Minnesota solar panel installations qualify to receive solar bill credits through net metering.
Minnesota solar incentives 2022
Federal tax credits for 2022
The Federal Solar Investmant Tax Credit has been available since 2008, but it’s been stepping down over the past few years. At the start of 2020, it decreased from 30 percent to 26 percent with further to fall.
Residential and commercial solar projects installed through the end of 2022 can still qualify for the 26 percent solar tax incentive. However, this is the last year to receive that rate for residential solar projects (there’s a little more leeway for commercial solar projects). In January 2023 it will drop to 22 percent, and by 2024 it will be just 10 percent and only available for commercial solar installations.
What’s better than switching to solar? Switching to solar property energy and driving an electric vehicle (EV)! Installing solar panels helps to offset the increased solar consumption of an EV charger and ensures the vehicle is truly fueled in a renewable manner, as 70 percent of Minnesota power is still fossil-fueld based. The Qualified Plug-in Electric Drive Motor Vehicle Tax Credit helps make the purchase easy by offering a credit worth up to $7,500 for individuals who buy a new electric vehicle that meet certain standards.
Federal & state business incentives for solar
Across the nation, PACE financing (Property Assessed Clean Energy) makes energy efficiency upgrades and renewable energy investments more attainable to commercial building owners. In Minnesota, most PACE financing is run through MinnPACE. The program has helped farms, commercial office buildings, nonprofit organizations, multi-tenant buildings, and others transform much of their energy consumption into energy production through solar power.
Additionally, installing solar on a commercial property is a business expense that can be depreciated. This means the cost basis of the equipment can essentially be “expensed” or “written off” after a period of time.
Generally, commercial solar has a 5-year depreciation schedule, however, recent tax changes now mean that such projects are allowed a “100 percent bonus depreciation.” This lets a taxpayer depreciate 100 percent of the cost basis in the year the solar array is placed into service, effectively allowing the tax savings from depreciation to be realized sooner. Please consult a tax professional for more in-depth information about depreciation.
How do you find out if your residential property or business property qualifies for funds to go solar? Contact a solar provider with experience in your community.
A trusted name in solar energy
The top-rated solar power provider in Minnesota, All Energy Solar makes switching to solar energy easy for property owners of all kinds — residential, commercial, agricultural, municipal, and more. Our solar professionals have the knowledge and experience to reveal the programs accessible in your area, as well as every other aspect of your project, from initial property and energy analysis through design, construction, and beyond.
Financing options are available for those that qualify. We’re offering a variety of 10, 12, 15, 20 and 25-year loan options that start as low as ZERO percent interest or no money down.