Cost of solar panels in South Dakota (2024)

How much do solar panels cost in South Dakota?

With professional installation, a typical 8-kilowatt (kW) residential solar panel system in South Dakota costs $19,120. That price drops to $13,384 after the full federal solar investment tax credit (ITC).

This doesn’t include the cost of a solar storage battery, which sometimes costs as much as the panels. Solar batteries are a must if you want real energy independence and essential if you go off-grid. Permitting, utility fees and maintenance also add to the cost of going solar.

The size of your system is another big factor in your overall solar costs. The average size of solar systems in South Dakota is 10.09 kW (kilowatts). Depending on your household energy usage, you might need a smaller or larger system.

Average solar installation cost by system size in South Dakota

Are solar panels worth it in South Dakota?

Solar energy isn’t as popular in South Dakota as in other states, but it can still be worth it for homeowners who want to save money and reduce their carbon footprint.

Financially, solar panels are only worth it in South Dakota — or anywhere else — if what you’re paying for the panels is cheaper than your current electric bill. The panels also have to keep working for it to pay off.

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

One solar customer we talked to, Adi in Brookings, put it this way: “You spend money on this, but overall you end up saving money in the long run. It is good for you and your family and it is also good for our environment.”

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.

If your house is a good candidate for solar, it’s worth considering in South Dakota if you like the idea of lower monthly utility bills and more energy independence. Over 25 years, homeowners with solar panels avoid $54,751 in utility costs on average. If you also have an electric vehicle, solar panels will save you even more.

» STILL NOT SURE? Solar energy pros and cons

Solar panel installation cost factors in South Dakota

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

» BEST STATES FOR SOLAR: South Dakota ranked 38th in 2024

Solar panels

Most of your solar equipment costs come down to how much you pay for 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. It’s a must if you want real energy independence, and they sometimes cost as much as the panels. Prices often depend on the battery’s storage capacity, lifespan, brand and other factors. 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). Inverter costs 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 stand-alone system for $80 to $400.

Condition of your roof

Quality solar panels should last 25 to 30 years, and your roof needs to last just as long. If you want to ensure a seamless and cost-effective solar journey, your roof must match the system's longevity. Get your roof inspected, fixed or replaced before you go solar.

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.

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 for safety before going the DIY route. If not installed correctly, solar panels pose safety risks, causing roof leaks and other problems.

» GREENEST STATES: South Dakota ranked ninth in 2024

How to save money on solar panels in South Dakota

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

• Compare quotes: Get quotes from at least three or four solar companies in South Dakota. This lets you compare different proposed equipment, pricing, financing terms and estimated energy production to find the best overall value. Don't just go with the cheapest option without vetting quality and services.
• Lower your electrical load: Before going solar, it’s smart to upgrade any old appliances. For example, replacing an old refrigerator with a more eco-friendly one reduces your electric load, which also helps lower your utility bill. If you use less electricity, you need fewer solar panels, making the whole system cheaper.
• Use incentives: Some solar panel manufacturers offer rebates on their products. While these may not be specific to South Dakota, they can still provide additional savings.

» MORE: Why are solar panels so expensive?

Solar incentives, tax credits and rebates in South Dakota

The federal solar investment tax credit (ITC) is the best financial incentive for most homeowners going solar in South Dakota. It 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 then 22% in 2034.

For example, if you spend $10,000 installing a solar panel system, the ITC is worth $3,000. If you owe $15,000 in taxes, the credit reduces your debt to $12,000. The ITC only offsets your tax liability; you can't take advantage of it if you don’t owe taxes in the first place.

Additional solar incentives in South Dakota include a property tax exemption and corporate tax credits.

» GREENEST STATES: South Dakota ranked ninth in 2024

How can I pay for solar panels in South Dakota?

Affordable financing makes the upfront costs of solar more manageable. For instance, most leases let you start saving from day one with little or no money down.

• 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. In an ideal financing scenario, your system generates enough extra power to pay off the loan. Solar loan terms typically last eight to 20 years.
• 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.
• Home equity: Using a home equity line of credit or loan to finance a solar installation can be a financially beneficial option — home equity interest rates are relatively low, and homeowners can still take advantage of the federal solar investment tax credit.

» SOLAR PANELS: Lease vs. buy

Compare solar installation companies in South Dakota

We compared ratings and reviews, equipment options, warranties, availability and other factors to pick the top solar companies in South Dakota.

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. South Dakota 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 South Dakota and other states.

Solar costs vs. savings: South Dakota and nearby states