Are there any solar panel incentives in North Dakota?
There are no major statewide rebates, and the federal residential solar tax credit is no longer available for new installations. The main statewide benefit is a five-year property tax exemption.
Solar property tax exemption
Adding solar panels can increase your home’s value, but North Dakota’s property tax exemption may keep that added value from raising your tax bill for five years.
The exemption applies only to the value added by eligible solar equipment — not your home’s full value. You’ll generally need to apply through your local tax assessor each year.
What to know about net metering in North Dakota
Net metering lets you use the solar electricity your home produces and send any extra power to the electric grid. Your utility then gives you a credit or payment for that excess energy.
However, North Dakota’s program doesn’t work like the one-to-one net metering offered in some other states.
Who qualifies?
State net-metering rules mainly apply to customers of North Dakota’s investor-owned utilities:
- Montana-Dakota Utilities
- Xcel Energy
- Otter Tail Power
Qualifying systems with a design capacity of 100 kilowatts or less are generally eligible for the state’s standard net energy billing rules.
Rural electric cooperatives and municipal utilities set their own solar and buyback policies, so the rules may be different depending on where you live.
How are bill credits calculated?
The electricity your panels produce first offsets the power your home uses during the billing period.
If you generate more electricity than you use during the billing period, your utility purchases the net excess under its approved rate schedule. However, excess electricity is generally purchased at an avoided-cost rate, which is usually lower than the retail rate you pay for electricity.
That means a kilowatt-hour of solar power is typically worth more when you use it in your home than when you send it to the grid.
What happens to excess electricity?
The details vary by utility, but North Dakota does not require investor-owned utilities to carry excess electricity forward indefinitely at the full retail rate. Depending on your utility’s tariff, net excess generation may instead be paid out at an avoided-cost rate after each billing period.
Before installing solar, ask your utility:
- How much it pays for excess electricity
- Whether credits roll over from month to month
- Whether there are interconnection or meter fees
- What system sizes qualify
- Whether approval is required before installation
How to get the most value from solar
Because excess electricity may be credited at a lower rate, it’s important not to install a system that produces much more power than your household normally uses.
A properly sized system can help you use more of your solar electricity directly and rely less on lower utility buyback rates. Battery storage can also increase how much solar power you use at home, but the potential savings may not always outweigh the added cost.
Solar panel costs in North Dakota
Average solar panel costs in North Dakota generally start between $21,500 and $43,000.
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.
Adding battery storage can cost another $7,000 to $18,000 or more, depending on the battery’s capacity and installation requirements.
It’s smart to compare quotes from at least three solar companies to make sure you’re getting the best deal. The table below shows 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 |
FHA mortgage financing for solar
Some homebuyers and homeowners may be able to finance eligible solar equipment through an FHA-insured purchase or refinance loan. FHA rules allow certain solar or wind system costs to be added to the base mortgage, subject to loan limits and other requirements. Availability and approval depend on the lender, borrower and property.
FAQ
Are solar panels worth it in North Dakota?
Solar can be worth it in North Dakota if lower electricity bills provide enough long-term savings to offset the installation cost. Over 25 years, North Dakota homeowners with solar could avoid an estimated $17,361 in electricity purchases, on average. In North Dakota, solar panels usually pay for themselves within 17.22 years.
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 can pay cash, take out a solar loan or, where available, lease a system with little or no upfront cost.
- 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 generally work best on an unshaded roof with enough usable space and good sun exposure. South-facing roofs often produce the most electricity, but other roof orientations may also work.
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.
What has North Dakota’s investment in solar been so far?
Total solar investments in the state amount to $6 million, according to the Solar Energy Industries Association.
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 July 24, 2026.
- North Dakota Office of State Tax Commissioner, “Property Tax Exemptions & Credits.” Accessed July 24, 2026.
- North Dakota Legislative Council, “Chapter 69-09-07 Small Power Production And Cogeneration.” Accessed July 24, 2026.
