Minnesota solar panels: The complete guide in 2025
Data updated Jul 15, 2025
Looking to go solar in Minnesota? On average, you'll need to install a 11.73 kW solar panel system to cover your electric bill—which costs about $23,565 after the federal tax credit.
Cost for an average system in Minnesota
| Out of pocket cost, cash | $33,664 |
| Federal tax credit (30%) | - $10,099 |
| Price post tax credit | $23,565 |
| 25-year savings | Payback period | Electricity offset |
|---|---|---|
| $42,050 | 11 Years | 92% |
As long as your federal tax bill is high enough, you can take advantage of the federal investment tax credit (ITC).
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Going solar in Minnesota
Despite the long winters, solid net metering programs make solar a worthwhile investment for plenty of Minnesotans.
Factor in the federal solar tax credit, and you can cut the cost of solar by thousands of dollars, speeding up your payback periods and increasing the value of your investment.
Here's what you need to know about going solar in The North Star State.
Cost
How much do solar panels cost in Minnesota?
Solar panels will save you a lot of money over time, but the upfront costs aren't cheap. The average Minnesota homeowner needs a 11.73 kW solar panel system to cover their electricity needs, which comes out to $33,664 before incentives. Prices range from $28,614 to $38,714, but after the federal tax credit, that drops by 30%, and Minnesota has some local incentives as well.
While this may sound high, going solar will pay off in Minnesota. That's why over 19,000 Minnesota homeowners have used EnergySage to receive and compare quotes for solar installations. You can expect to earn back your initial solar investment through electricity savings in about 10.51 years, while most systems last at least 25 years. You'll often see this number referenced as your solar payback period.
There are a few ways to pay for your solar panel system, each with its pros and cons.
Cash purchase: You pay for your system upfront. While it’s the most expensive option initially, it provides the best long-term savings.
Solar loan: You owe little to nothing upfront and make monthly payments on your system. With a solar loan, you get to maintain ownership of your panels. Still, they aren't all created equal: If you have access to subsidized clean energy loans through local incentive programs, that's usually your best bet. If not, go with a home equity loan or a personal loan. Private solar loans typically come with higher interest rates or upfront fees.
Solar lease or power purchase agreement (PPA): You have little to no upfront costs, but a third-party company owns your system. Depending on your contract, you’ll either lease your solar panels (solar lease) or purchase the electricity they generate (PPA). While more affordable upfront, third-party ownership models generally provide the lowest savings and have the worst reputation for reliability. They can be beneficial, but remember to read the fine print.
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Incentives
What are the best solar rebates and incentives in Minnesota?
Incentives help bring solar's price tag down considerably in Minnesota. Here are the major ones to know about:
| Incentive | Average savings in Minnesota | Description |
|---|---|---|
Residential Clean Energy Tax Credit, formerly the federal investment tax credit (ITC) | $10,099 | Lowers your solar panel system's cost by 30% |
Minnesota Housing Fix Up Home Improvement Loan Program | Depends on the cost of your solar panels | Affordable loans for home-upgrade projects with fixed interest rates; no down payment required |
Xcel Energy’s Solar*Rewards Program | $1,800 – $15,000 | Financial incentive program to receive annual payments from Xcel Energy in exchange for your Renewable Energy Credits (RECs) |
Minnesota solar sales tax exemption | 6.875% of your system’s cost | You don't need to pay any sales tax on new solar panel systems in Minnesota |
Is net metering available in Minnesota?
In some states, you'll earn bill credits from your utility company when your solar panel system generates excess electricity and sends it to the grid. This incentive is known as net metering—basically a solar buyback program—and makes it so you will owe very little, or even nothing, on your electric bills with solar panels.
Minnesota's net metering program is solid. Excess solar generation is credited to customers at the average utility energy rate, which is slightly less than what you pay per kWh, but still favorable. Overall, net metering can boost the value of your investment considerably over the years.
Get the details on net metering in Minnesota or see specific programs below:
Equipment
Equipment quality
Solar panels continue to get more efficient, meaning they produce more power per square foot. In 2025, the most popular solar panels can produce about 450 watts of electricity in full sunlight—you’ll want panels with at least that much power output to get the most out of your installation.
It’s also important to choose a solar inverter setup that works for your roof’s layout.
And if you plan to install a solar battery, pick one that can easily integrate with that inverter.
While premium equipment can result in sticker shock, it typically saves you more money in the in the long run: The highest-quality panels degrade at a slower rate and maintain more of their power output for longer, and the best warranty terms often guarantee up to 40 years of coverage in case you need repairs or replacements.
Companies
Who are the best solar installers in Minnesota?
We pre-screen all of the solar companies on EnergySage to ensure they'll provide you with a high-quality installation. We then rate them based on their results, reputation, and responsiveness. Here are the highest-rated EnergySage installers in Minnesota:
Ready to start looking for a solar installer?
Here are some of the most popular ones near you:
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resources
Top solar resources for Minnesota
- Minnesota Solar Loan Providers
Search through our list of top loan providers to finance your solar panel system.
- Community Solar farms in Minnesota
Can't install solar on your roof? Check out local solar farms to save money.
- Minnesota Commerce Department
Learn about MN solar programs from the state government.
- Minnesota Public Utilities Commission
Read more about how utility companies work in MN.
- Minnesota Electricity Profile (EIA)
Learn about MN energy production and prices.
- MN State Solar Factsheet (SEIA)
See quick stats about how much solar energy has grown in MN.
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