Minnesota electricity prices average $0.13/kWh, just below the national average of $0.14/kWh. In 2018 Minnesota's solar energy capacity increased by three percent to nearly three percent of the state's net generation.
The average cost of a 7.5kW (equivalent to saving about 200 trees a year) solar power system starts around $23,000 in Minnesota. Before any incentives, in the first year you’d save about $1,300, compared to if you had been paying the normal rates for the energy you used. These savings can continue for well over 25 years, improving with inflation.
This depends on may factors such as your system size, power output, and financing. Here are the main ways you can finance your home solar power system, and the kinds of returns you may expect to see:
From our example above, the homeowner purchased a 7.5kW system to offset their energy bill. Overhead cost was $23,000, with a significant proportion returned in the first year through incentives, rebates, and savings, then paying itself in full over 8 years.
Most solar power systems have a warranty lifetime of 25 years. In that time, between incentives and paying lower rates you could make a profit of around $30,000 - more than the up-front cost of the system!
Even with occasional maintenance or part replacement, that is a massive savings. Solar panel power output falls on average 0.8% per year, so with a little TLC and load management you can extend the life of your system well beyond the warranty’s expiration date, continuing to save indefinitely.
Whether or not you can afford the up-front cost of the install, you may want to consider a Home Equity Line of Credit (HELOC). With equity in your home, or good credit, you may qualify for a 15-year solar HELOC with fixed rate of 4% or lower.
Starting with that same 7.5kW system costing $23,000 but with zero up-front cost, accounting for incentives, credits, rebates, and annual energy savings starting around $1,300, you could see a revenue surplus of about $6,000 at the end of the first year.
Save some of that money though. Your loan payments will likely exceed your power savings during the 15-year term. Once the loan is paid off, you can expect to save about $1,700 a year. Over 25 years you could expect to make about $21,000.
With a Power-Purchase Agreement (PPA) the homeowner leases their roof to an outside party, usually a power company. Generally PPAs feature a fixed price per kWh, with either a fixed term or an annual escalator.
With a PPA, the cost of installation, repair, and maintenance to the homeowner is usually $0.00. For that 7.5kW system, with a PPA you could expect to save about $200/year on energy, with that figure increasing as electricity rates rise over time. Over 25 years, you could see over $9,000 in revenue. That’s technically an infinite return!
PPA’s can be complicated, as you are effectively ceding at least some control of your home to the third party, but they are an excellent way to get into solar because they have no overhead.
Data from DSIRE. For more info visit: https://www.dsireusa.org/
|Name||Implementing Sector||Program Type||Administrator||DSIRE ID|
|Wind and Solar-Electric (PV) Systems Exemption||State||Property Tax Incentive||151|
|Net Metering||State||Net Metering||282|
|Solar and Wind Easements & Local Option Rights Laws||State||Solar/Wind Access Policy||302|
|Energy Investment Loan Program||State||Loan Program||Minnesota Department of Commerce||326|
|Comprehensive Energy Savings Plan for State Facilities||State||Energy Standards for Public Buildings||357|
|Xcel Energy Wind and Biomass Generation Mandate||State||Renewables Portfolio Standard||396|
|Mandatory Utility Green Power Option||State||Mandatory Utility Green Power Option||410|
|Solar Equipment Certification Requirement||State||Equipment Certification||477|
|Wind Energy Sales Tax Exemption||State||Sales Tax Incentive||601|
|Non-Mandated Renewable Energy Objective||State||Renewables Portfolio Standard||605|
|Solar Energy Sales Tax Exemption||State||Sales Tax Incentive||Department of Revenue||1218|
|Great River Energy (28 Member Cooperatives) - Solar-Electric (PV) Rebate Program||Utility||Rebate Program||Great River Energy||1243|
|Rental Rehabilitation Loan Program||State||Loan Program||Center for Energy and Environment||2322|
|Renewable Energy Standard||State||Renewables Portfolio Standard||2401|
|Minnesota - Design Requirements for State Funded Buildings||State||Energy Standards for Public Buildings||2627|
|Made in Minnesota Solar PV Incentive Program||State||Performance-Based Incentive||Minnesota Department of Commerce||5418|
|Made in Minnesota Solar Thermal Rebate||State||Rebate Program||Minnesota Department of Commerce||5419|
|Value of Solar Tariff||State||Performance-Based Incentive||Minnesota Department of Commerce||5420|
|Value of Solar Tariff||State||Net Metering||5446|
|Value of Solar Tariff||State||Value of Solar Tariff||5666|
|Steele-Waseca Cooperative Electric - The Sunna Project||Utility||Grant Program||5673|
|Xcel Energy - Solar*Rewards Community Garden||Utility||Solar Renewable Energy Credit Program||5677|
|Rural Minnesota Energy Board PACE Program||Non-Profit||PACE Financing||5749|
|Rural Minnesota Energy Board PACE Program||Local||PACE Financing||5751|
|Made in Minnesota Solar PV Incentive Program||Utility||Performance-Based Incentive||Minnesota Department of Commerce||5909|
|City of Minneapolis - Solar Energy System||Local||Solar/Wind Access Policy||Minneapolis Department of Sustainability||5921|
|City of Minneapolis - Wind Energy Conversion Systems||Local||Solar/Wind Access Policy||5922|
|Connexus Energy - Compressed Air Efficiency Evaluation||Utility||Energy Analysis||Connexus Energy||15295|
|Minnesota Energy Resources - Energy-Saving Audits||Utility||Energy Analysis||15361|
|Owatonna Public Utilities - Energy Audit||Utility||Energy Analysis||Owatonna Public Utilities||15393|
|Xcel Energy - Compressed Air Efficiency||Utility||Energy Analysis||Xcel Energy||16359|
|Xcel Energy - Energy Analysis||Utility||Energy Analysis||16361|
|Minnesota Power - Commercial Energy Analysis||Utility||Energy Analysis||16365|
|Dakota Electric Association - Business Energy Audits and Assessments||Utility||Energy Analysis||16759|
|Center for Energy and Environment - Energy Intelligence for Industry||Non-Profit||Energy Analysis||Center for Energy and Environment||16862|
|Otter Tail Power Company - Rate Analysis and Research Assistance||Utility||Energy Analysis||Otter Tail Power Company||16916|
|Otter Tail Power Company - PowerProfiler||Utility||Energy Analysis||Otter Tail Power Company||16917|
|Arrowhead Electric Cooperative - Energy Efficient Equipment Program||Other||Energy Analysis||17173|
|East Central Energy - Business Energy Evaluation||Utility||Energy Analysis||17175|
|Minnesota Technical Assistance Program||Other||Energy Analysis||17554|
|University of Minnesota - Minnesota Technical Assistance Program||Other||Energy Analysis||University of Minnesota||17555|
|Austin Utilities - Business Energy Audit||Other||Energy Analysis||17883|
|We Save Business - Demand Side Management||Other||Energy Analysis||The City of East Grand Forks||18499|
|Rochester Public Utilities - Compressed Air System Leak Check||Utility||Energy Analysis||Rochester Public Utilities||18918|
|Rochester Public Utilities - Energy Audit||Utility||Energy Analysis||Rochester Public Utilities||18920|
|Alexandria Light and Power - Questline Internet Resource Service||Utility||Training and Information||19825|
|Austin Utilities - Compressed Air Leak Correction||Other||Energy Analysis||19831|
|Blue Earth Light and Water - Compressed Air Study Program||Utility||Energy Analysis||19840|
|Tyler Municipal Light & Power Dept - Energy Smart Rebates||Other||Energy Analysis||Tyler Municipal Light & Power Dept||19972|
|Steele-Waseca Cooperative Electric - Wellspring Wind Energy Program||Utility||Other||Steele-Waseca Cooperative Electric||20024|
|New Ulm Public Utilities - Rebate/Reimbursement Programs||Utility||Energy Analysis||New Ulm Public Utilities||20424|
|Minnesota Valley Cooperative - Minnesota Valley Electric Cooperative - Energy Audits||Other||Energy Analysis||20675|
|Grand Rapids Public Utility Commission - Conservation Improvement Program||Other||Energy Analysis||Grand Rapids Public Utility Commission||20796|
|Owatonna Public Utilities - Compressed Air Leak Correction||Utility||Energy Analysis||Owatonna Public Utilities||20890|
|Owatonna Public Utilities - Load Profiler||Utility||Energy Analysis||Owatonna Public Utilities||20891|
|Owatonna Public Utilities - Partnering in Energy Solutions||Utility||Energy Analysis||Owatonna Public Utilities||20892|
|Xcel Energy - Energy Design Assistance||Utility||Energy Analysis||Xcel Energy||21546|
|Xcel Energy - Online Energy Assessment||Utility||Energy Analysis||Xcel Energy||21547|
|Xcel Energy - Refrigeration Recycling||Utility||Energy Analysis||21572|
|Xcel Energy - Small Business Lighting||Utility||Energy Analysis||21583|
|Xcel Energy - Business Energy Advisor||Utility||Energy Analysis||Xcel Energy||21584|
|Missouri River Energy Services - Bright Energy Solutions||Other||Energy Analysis||Missouri River Energy Services||21612|
|Xcel Energy - Business Solutions||Utility||Energy Analysis||21623|
|Xcel Energy - Energy At Risk Financial Analysis Tool||Utility||Energy Analysis||21637|
|Xcel Energy - Energy Management Systems||Utility||Energy Analysis||21648|
|Seventhwave (formerly Energy Center of Wisconsin) - Energy Consulting||Non-Profit||Energy Analysis||Seventhwave (formerly Energy Center of Wisconsin)||21796|
|Seventhwave (formerly Energy Center of Wisconsin) - Back of the Envelope Calculator||Non-Profit||Energy Analysis||Seventhwave (formerly Energy Center of Wisconsin)||21797|
|Seventhwave (formerly Energy Center of Wisconsin) - Comprehensive Education Programs and Services||Non-Profit||Training and Information||Seventhwave (formerly Energy Center of Wisconsin)||21798|
|Midwest Energy Efficiency Alliance - Midwest Industrial Initiative||Non-Profit||Energy Analysis||Midwest Energy Efficiency Alliance||21822|
|Midwest Energy Efficiency Alliance - Building Operator Certification||Non-Profit||Training and Information||Midwest Energy Efficiency Alliance (MEEA)||21824|
|Center for Energy and Environment - Engineering for Energy Efficiency||State||Energy Analysis||Center for Energy and Environment||22032|
|Central Minnesota Municipal Power Agency -||State||Energy Analysis||22033|
|Willmar Municipal Utilities - Commercial Energy Efficiency Rebate Program||Utility||Rebate Program||Willmar Municipal Utilities||22087|
|Connexus Energy - Residential Energy Efficiency Loan Program||Utility||Loan Program||Center for Energy and Environment||22088|
|Minnesota Energy Resources (Gas) - New Construction Rebates||Utility||Rebate Program||Minnesota Energy Resources||22091|