North Dakota solar incentives, tax credits and rebates

Resources to make solar panels more affordable in 2024

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Do you own or rent?

house with porch with solar panels on roof

As if long-term energy bill savings weren't enough to go solar in North Dakota, federal and state incentives can make it even more financially beneficial. Here’s everything you need to know about how state and federal solar incentives can make installing panels more affordable in the Peace Garden State.


Key insights

In North Dakota, a typical residential solar panel system costs $8,890 to $23,240, depending on the size of your system and what financial incentives you qualify for.

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The 30% federal solar investment tax credit (ITC) is the most significant financial incentive for most homeowners buying solar panels.

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Many North Dakota residents can get the retail rate when they sell excess solar power to the local grid through net metering.

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Residential solar panel incentives in North Dakota

North Dakota has a renewable energy property tax exemption that exempts 100% of the value of solar energy systems from property tax assessments for a five-year period. This benefit applies to both residential and commercial installations. But that won’t help much with your upfront costs.

The federal solar investment tax credit (ITC) is still the most significant financial incentive for most homeowners buying solar panels in North Dakota. It reduces your federal tax liability by 30% of how much it costs to install solar panels.

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

For example, if you spend $10,000 installing a solar panel system, the ITC is worth $3,000. If in the year your system becomes operational you owe $15,000 in taxes, the ITC reduces what you owe to $12,000. The ITC is a credit, meaning it directly decreases the amount of taxes you owe.

You must claim the ITC when you file federal taxes in the year that your solar panel system becomes operational. To do this, complete Form 5695. The ITC is nonrefundable — any unused portion rolls over to the next tax year.

What to know about net metering in North Dakota

Net metering is a system of give-and-take between you and your utility company. It lets you access power from the grid when your panels don’t generate enough electricity. Net metering also lets you earn credits for sending any excess solar energy to the grid. These credits offset your future electricity bills.

In North Dakota, net metering is regulated by the North Dakota Public Service Commission. Otter Tail Power Company credits are typically provided at the full retail rate. However, Montana-Dakota Utilities' net billing system currently uses the avoided cost rate, which is 3 cents per kilowatt-hour (kWh) as of publishing.

Whether or not you participate in net metering, any grid-connected systems can still tap into the local power grid when needed. If you don’t want to connect to the grid at all, the alternative is to store energy in a battery. That way, you can still turn your lights on when panels aren’t generating electricity, like at night or on especially cloudy days. The biggest downside is that solar storage battery costs can be almost as high as the panels — $7,000 to $18,000.

» GREENEST STATES: North Dakota ranked 43rd in 2024 

How much are solar panels in North Dakota?

After the federal solar tax credit, solar panel costs in North Dakota typically range from $8,890 to $16,268.

Your system size greatly affects how much you pay overall. The typical system size for solar systems in North Dakota is 13.75 kW (kilowatts). You might need a larger or smaller system, depending on your average household energy usage.

Average solar cost by system size in North Dakota

Solar resources in North Dakota

Below are some additional resources.

Find solar companies in North Dakota

A good solar company helps you navigate local incentives, permitting and net metering policies. Compare our picks for North Dakota’s top solar companies to learn more.

Do you own or rent?

FAQ

Can I get free solar panels in North Dakota?

No, but you can enter a solar lease agreement with little to no upfront costs. Solar leases generally require a flat monthly fee.

» FREE SOLAR PANELS: Are they really free?

How can I pay for solar panels?

You can pay cash, but most people finance solar panels with a solar loan. It works a lot like any other type of loan — there’s an application and approval process, and you pay it back over time (with interest). You also have the option of a solar lease, which works a lot like leasing a car: You get the benefits of going solar without actually owning the equipment. The biggest downside to leasing is that you won’t be eligible for the ITC. 

» SOLAR PANELS: Lease vs. buy

How much can I save with solar panels in North Dakota?

On average, North Dakota homeowners with solar panels avoid $58,265 in utility costs over 25 years. Even if you don’t generate 100% of your energy needs, you can still save a lot of money compared with paying traditional utility bills.

» EXPLORE: Where your solar savings go the furthest

How do I know if my house is a good candidate for solar?

It’s best to have plenty of unshaded roof space that faces south or west for optimal sun exposure. It’s also smart to upgrade any old, inefficient appliances first. Reducing your electrical loads now means you can get a smaller system, which will be cheaper.

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.

Solar photovoltaic (PV) technologies, more commonly known as solar panels, absorb sunlight and convert it into usable electricity. If you have a lot of shading around your house, they might not get enough sun to power your home.

» BEST STATES FOR SOLAR: North Dakota ranked 29th in 2024

Is my HOA allowed to restrict solar panels?

North Dakota has no state laws that prevent homeowners associations from restricting solar panel installation.

What has North Dakota’s investment in solar been so far?

Total solar investments in the state amount to $4 million, according to the Solar Energy Industries Association.

Bottom line

The ConsumerAffairs Research Team conducted an in-depth analysis to determine the average costs of going solar and incentives in other states. Turns out, it’s worth it for many homeowners, particularly for North Dakotans. Your upfront costs may be higher than in some other states, but you can still save thousands over time.

Solar costs vs. savings: North Dakota and nearby states

*For 100% usage offset; **Over 25 years

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:
  1. DSIRE, "North Dakota Solar Programs". Accessed March 29, 2024.
  2. Solar Energy Industries Association, "North Dakota Solar." Accessed March 29, 2024.
  3. SolarReviews, "How much do solar panels cost in North Dakota?" Accessed March 29, 2024.
  4. North Dakota Legislative Branch, “North Dakota Administrative Code - Title 69 Article 9 Chapter 7.” Accessed July 2, 2024.
  5. North Dakota Office of State Tax Commissioner, “Property Tax Credits & Exemptions.” Accessed July 2, 2024.
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