Are there any solar incentives in North Dakota?
North Dakota has relatively few solar incentives compared to states like California and Minnesota.
Property tax exemption
A solar property tax exemption means that, for tax purposes, the addition of a solar energy system won’t cause an increase in your property’s assessed value. It doesn’t actually make going solar cheaper up front.
It applies to added value from solar, not total property value. Essentially, your property tax bill won’t go up because your solar panels increase the market value of your home. The state has a 100% exemption for five years.
What to know about net metering in North Dakota
Net metering allows homeowners with solar (or other small renewable systems) to use the electricity they produce first and send any extra power back to the grid. In return, the utility credits the homeowner’s bill for that excess electricity.
But net metering in North Dakota works differently than in many other states. Instead of a traditional 1-to-1 credit system, most homeowners are on a net billing structure, where excess solar energy is credited at a much lower rate.
Whether you can participate and how you’re compensated depends on your utility. Investor-owned utilities like MDU, Xcel Energy and Otter Tail Power must offer net metering, but many rural electric cooperatives use “buyback” programs that typically pay less.
For excess energy, utilities usually credit customers at the “avoided cost” rate, not the retail rate. That means while you might pay around 11 cents to 12 cents per kWh for electricity, exported solar power is often credited at just 2 cents to 4 cents per kWh.
Because of these lower credits, most homeowners benefit from using as much of their solar energy on-site as possible. Systems are generally capped at 100 kW for residential use.
Solar panel costs in North Dakota
Average solar panel costs in North Dakota generally start between $21,500 and $43,000. It’s smart to compare quotes from at least three solar companies to make sure you’re getting the best deal.
System size is a big cost factor when going solar. A typical North Dakota household needs about a 10.8 kW system, which costs $46,440 on average. Depending on your energy needs, you might need a smaller or larger system.
Your total price also depends on whether you add battery storage to your system. Solar batteries cost $7,000 to $18,000, which can nearly double the total system price.
Average solar panel costs by system size in North Dakota
| 5 kW | 6 kW | 7 kW | 8 kW | 9 kW | 10 kW | |
|---|---|---|---|---|---|---|
| Statewide average | $21,500 | $25,800 | $30,100 | $34,400 | $38,700 | $43,000 |
Federal solar loan programs
Energy Efficient Mortgages allow homeowners to finance energy-saving upgrades, including solar systems, as part of their mortgage, often with support from federal programs like FHA or VA.
- FHA Energy Efficient Mortgages are available to many homebuyers. This lets you add money to your mortgage for energy upgrades. The upgrade cost must be less than the expected energy savings, and a home energy assessment is required first.
- VA Energy Efficient Mortgages are available to military members, veterans and reservists. This lets you add up to $6,000 if energy savings justify the cost.
- Conventional Energy Efficient Mortgages are offered by private lenders (not government-backed). You can borrow up to 15% of a home’s value for energy upgrades. This may help borrowers qualify by adjusting debt-to-income rules.
FAQ
What happened to the federal solar tax credit?
The federal solar investment tax credit (ITC) previously let homeowners deduct 30% of installation costs from their federal taxes. It was phased out with the “One Big Beautiful Bill Act” (OBBBA) in 2025.
Homeowners who installed solar systems before the deadline may still claim the credit, but systems installed in 2026 or later no longer qualify.
Are solar panels worth it in North Dakota?
Going solar is sometimes worth it in North Dakota for the long-term savings on utility bills. Over 25 years, residents with solar panels avoid $17,361 in utility costs on average.
Your current electric bill is the starting point for assessing the financial benefits of transitioning to solar energy. Your average energy consumption tells you what size solar system you need. Once you know this, you can figure out potential savings and how long it should take for your solar installation to pay for itself.
» COMPARE: Solar companies in North Dakota
How can I pay for solar panels?
Going solar is like buying a car. You could pay cash, but a lot of people finance or lease with minimal upfront costs.
- Solar loans work like any other home improvement loan. There’s an application and approval process. You pay it back over time (with interest) each month.
- Leasing solar panels lets you set up a system without high upfront costs. A solar company installs and maintains the panels on your property, and you pay a monthly fee to use them.
» SOLAR PANELS: Lease vs. buy
Is my house a good candidate for solar?
Solar panels work best on large, unshaded roofs that face south or west. We suggest using NREL’s PVWatts Calculator to estimate how much electricity a solar panel can produce over a year for your house.
The condition of your roof matters too — if it needs replacement soon, do that before installing solar panels. Installing solar panels on an old roof might mean you have to remove the panels, replace your roof and then reinstall the panels. This will cost around $5,000 for a 19-panel setup.
Article sources
ConsumerAffairs writers primarily rely on government data, industry experts and original research from other reputable publications to inform their work. Specific sources for this article include:
- DSIRE, “Programs.” Accessed April 13, 2026.
- North Dakota Office of State Tax Commissioner, “Property Tax Credits & Exemptions.” Accessed April 13, 2026.
- North Dakota Legislative Council, “Chapter 69-09-07 Small Power Production And Cogeneration.” Accessed April 13, 2026.
