Cost of solar panels in Minnesota (2024)

How much do solar panels cost in Minnesota?

With professional installation, a typical 8-kilowatt residential solar panel system in Minnesota costs $24,720. That price drops to $17,304 after the full federal solar investment tax credit (ITC). This doesn’t include a storage battery, which sometimes costs as much as the panels.

Most installers price systems based on their wattage. “Cost per watt” is similar to the price per square foot when you buy a house. It helps you compare the value of solar energy systems in different sizes. The average solar panel installation costs $3.09 per watt in Minnesota.

Average solar installation cost by system size in Minnesota

We suggest using the National Renewable Energy Laboratory's PVWatts Calculator to estimate how much electricity a solar panel can produce over a year on your house — just type in your address. Project Sunroof is a free solar savings estimator powered by Google Earth imagery.

Are solar panels worth it in Minnesota?

Installing solar panels leads to big long-term savings on electricity bills for Minnesota homeowners. On average, you’ll spend $10,815 to $30,900 for panels that last about 25 years. Over that same time period, you’d avoid approximately $59,279 in total utility costs.

Whether going solar is worth it in Minnesota depends on your current energy usage and the solar company you hire. One resident, Eric in Eden Prairie, had a seamless setup process and has seen great value from his solar panel system, especially with the addition of a battery. He likes using the same app to manage his electric cars and visualize energy production versus consumption.

Homeowners with solar panels typically save $20,000 to $90,000 over 25 years.

On the other hand, Greg in Cottage Grove ran into some headaches with his local utility company when hooking up his system, but he still says it was the right choice.

Bureaucratic red tape seems to have been Greg’s biggest frustration, not the solar panels themselves: “If it wasn’t for dealing with those pesky power company people, this experience would have been well above what I expected,” he told us. “To say it was a long process of waiting for them would be quite an understatement.”

If your house is a good candidate for solar, it’s at least worth considering. As energy costs continue to rise and climate change becomes a more serious problem, many homeowners are considering installing solar panels. For many, solar power brings ecological and economic wins that outweigh the growing pains.

» STILL NOT SURE? Solar energy pros and cons

Solar panel installation cost factors in Minnesota

The equipment — solar panels, inverters, mounting hardware and other electrical accessories — is typically the largest portion of your overall solar costs (approximately 25% to 50%). Labor, which includes planning, preparing and connecting your system to the grid, accounts for 10% to 30%. Local permits and fees are a small part of the final price.

Solar panels

You’ll hear installers talk about how “efficient” their panels are. Solar panel efficiency is a measure of how well a panel makes electricity. The more efficient the solar panels you buy are, the fewer panels you need. While more efficient panels cost a little more, you save by buying fewer panels.

In general, monocrystalline panels are considered the best bang for your buck. Cheaper solar panels are typically polycrystalline. The difference comes down to efficiency and materials: Monocrystalline panels are made from pure, single silicon crystals; various silicon fragments melted together are used to make polycrystalline panels.

Additional solar equipment costs

Solar arrays also contain mounting equipment, wiring and other devices, such as inverters, batteries or a monitoring system.

• Solar batteries: A battery stores energy for later use. Expect to pay between $7,000 and $18,000, though some cost $30,000 or more.
• Solar inverter: Inverters convert the electricity generated by your solar panels from direct current (DC) to alternating current (AC). Prices usually range from $1,000 to $3,000.
• Monitoring system: Some companies include a solar monitoring system to track how much energy your system produces and if there are any problems. If not, you can buy a standalone system for $80 to $400.

Size of your system

The size of your solar panel system is a big factor in your overall solar costs. The average size of solar systems in Minnesota is 10.1 kW. You might need a smaller or larger system, depending on your household energy usage.

You can determine what size system you need with some quick math. First, find out the amount of electricity you used in the last year in kilowatt-hours (kWh). You’ll find this information through your electric bill’s online account dashboard. Divide your annual kWh by 1,200 to find the system size you need.

» WATT’S THE DIFFERENCE? KW vs. kWh

Condition of your roof

Quality solar panels should last 25 to 30 years, and your roof needs to last just as long. ConsumerAffairs often hears from disgruntled solar customers who felt blindsided by expensive roof repairs needed after their solar panel installation was complete. This is a frustrating and expensive process you should avoid if you can. Get your roof inspected, fixed or replaced before you go solar.

Labor costs

Solar equipment costs are going down, but labor costs are higher than ever in some areas. Installing solar panels yourself might initially seem cheaper because you'll save on labor costs. However, it's crucial to consider several factors. If not installed correctly, solar panels pose safety hazards. You also run the risk of roof leaks and other problems.

» DIY SOLAR PANELS: Pros and cons

How to save money on solar panels in Minnesota

There’s no way around it — solar panel installations are expensive. Here are some tips to maximize your savings on solar panels in Minnesota:

• Lower your electrical load: If you use less electricity, you need fewer solar panels, making the whole system cheaper. For example, replacing an old refrigerator with a more eco-friendly one reduces your electric load.
• Compare quotes: Get quotes from at least three or four different solar companies.
• Use incentives: Besides government incentives, you might be able to take advantage of manufacturers’ rebates.

» MORE: Why are solar panels so expensive?

Solar incentives, tax credits and rebates in Minnesota

Solar equipment is 100% exempt from sales tax in Minnesota. There’s also a property tax exemption, meaning that your property tax bill won’t go up just because solar panels add value to your home.

The federal solar investment tax credit (ITC) is still the best financial incentive for going solar in Minnesota. The ITC credits 30% of the system’s total cost — including equipment, labor and permits — toward what you owe on federal income taxes.

The ITC drops to 26% in 2033 and 22% in 2034.

For example, if you spend $10,000 installing a solar panel system, the ITC is worth $3,000. If you owe $5,000 in taxes, the credit reduces your debt to $2,000. Any unused portion of the credit rolls over into future tax years.

Depending on where you live, you might also be eligible for solar rebates from Minnesota Power, Austin Utilities, Dakota Electric Association, Rochester Public Utilities or Owatonna Public Utilities.

» MORE: Minnesota solar incentives, tax credits and rebates

How can I pay for solar panels in Minnesota?

Affordable financing makes the upfront costs of solar more manageable. Several programs let you start saving from day one with minimal upfront costs.

• Loan: A solar loan works like any other type of home improvement loan — there’s an application and approval process, and you pay it back over time (with interest) each month.
• Lease: Leasing solar panels is a great way to set up a system without the high upfront costs. A potential downside is that you are not eligible for the same tax incentives.
• PACE financing: PACE (Property Assessed Clean Energy) financing allows property owners to fund renewable energy projects through a special assessment on their property tax bill, repaid over time. MinnPACE is available to commercial, industrial, nonprofit and multifamily residential sectors in Wright, Sherburne, Stearns and Becker counties.

» SOLAR PANELS: Lease vs. buy

Bottom line

Residential solar panel system costs typically fall between $10,000 and $30,000 or higher, depending on factors like the system's size, local labor rates and available incentives. Minnesota homeowners with solar panels can typically save more than that in total avoided energy costs over the lifetime of a system.

The ConsumerAffairs Research Team has conducted extensive research to compare the costs of going solar in Minnesota and other states.

Solar costs vs. savings: Minnesota and nearby states