Cost of solar panels in South Dakota

How much is it to go solar in 2024?

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The average cost to install solar panels is $25,094 in South Dakota before the full federal solar investment tax credit (ITC). The price drops to $17,566 after the full ITC.

Going solar in the Mount Rushmore State is about 5% more expensive than the national average. The out-of-pocket investment might be higher than in other states, but you can still save thousands with some careful planning.


Key insights

  • The average cost per watt is $2.39 in South Dakota.
  • The average payback period in South Dakota is 11 years if you pay for your system upfront.
  • South Dakota residents who go solar save an estimated $22,923 over 25 years.

How much do solar panels cost in South Dakota?

Installing residential solar panels can cost between $10,000 and $30,000 or more, though individual costs vary. On average, residents of South Dakota pay $25,094 before tax credits for their system.

Not surprisingly, the smaller your system, the less you pay. The average size of a solar energy system in South Dakota is 10.5 kW (kilowatts).

Average cost by system size in South Dakota

Source: EcoWatch

Are solar panels worth it in South Dakota?

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

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.”

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.

You spend money on this, but overall you end up saving money in the long run. ”
— Adi in Brookings

Some solar customers we’ve talked to are understandably frustrated when their equipment doesn’t work and their solar company won’t help them. If you run into a production issue and can’t resolve it quickly, you might end up paying more than you are now. Your solar loan payment is due whether or not the panels are working.

People who go solar with a trustworthy solar company, though, generally have much more positive feedback. On average, South Dakota homeowners with solar panels get an estimated net savings of $22,923 over 25 years.

» STILL NOT SURE? Solar energy pros and cons

Cost factors of going solar in South Dakota

In South Dakota, as in other states, the cost of your solar energy system depends on the quality of panels you install, additional equipment and permits. Here's a breakdown of what to expect.

Size of your system

Your system's size is another major factor in how much you pay overall. The higher your typical energy usage, the bigger the solar energy system you’ll need to generate enough power for your household.

You can easily determine what size system you need. First, find out the amount of electricity you used in the last year in kilowatt-hours (kWh). You can find this information through your electric bill’s online account dashboard.

Then divide your annual kWh by 1,200 to find the system size you need. For example, the typical South Dakota household uses 12,228 kWh per year. Using this formula, the typical household would need a 10-kW system.

» WATT’S THE DIFFERENCE? kW vs. kWh

Solar equipment costs

Equipment prices vary due to the quality of the equipment, the size of your system and the company you buy it from. In South Dakota, the average cost per watt to install a solar power system works out to $2.39.

The other big expense to consider is storage batteries. Sometimes they cost almost as much or more than the panels themselves. Here are some typical costs for batteries and other equipment:

» COMPARE: Most efficient solar panels

Condition of your roof

Quality solar panels last around 25 to 30 years. To make sure your roof can handle the load, have your roof inspected and repaired before installing solar. Otherwise, you may have to pay to remove the panels, fix your roof and reinstall the panels again if you need to make repairs later.

» SHOULD YOU: Replace your roof before going solar?

Local permits and fees

Most towns have their own set of rules regarding permits required for solar energy system installation, and these permits can contribute to your total costs. The good news is that South Dakota passed a bill to streamline permit procedures for solar energy facilities and help the state’s Public Utilities Commission (PUC) manage its docket.

If you're residing outside city limits, you might not need permits, but it's always best to check before planning your installation. Some solar companies handle your permit-related tasks, so don't forget to ask about this service when you're ready to sign your contract — it could save you a lot of hassle.

» TIPS: Getting the best solar quotes

Solar incentives, tax credits and rebates in South Dakota

The federal solar investment tax credit (ITC) is the biggest factor in reducing the cost of going solar in South Dakota. The average ITC value in South Dakota is $7,528 in 2023.

If you install a residential solar panel system by the end of 2032, you will receive a federal income tax credit equal to 30% of the system's total cost — including equipment, labor and permits. The credit drops to 26% in 2033 and 22% in 2034. South Dakota also offers a property tax exemption that can save you thousands of dollars.

» EXPLORE: South Dakota solar incentives

Compare solar installation companies in South Dakota

Compare popular solar companies available in South Dakota below. Read our guide to finding the best solar companies for more information.

Do you own or rent?

FAQ

Can I get free solar panels in South Dakota?

There are no programs for free solar panels in South Dakota that we know of. You can lease solar equipment, but it’s not free. Solar leases generally require a flat monthly fee.

» FREE SOLAR PANELS: Are they really free?

How are solar costs trending in South Dakota?

The cost to go solar in South Dakota has fallen 42% over the last 10 years, according to the Solar Energy Industries Association.

How can I pay for solar panels?

You can pay cash, but most people finance solar panels. A solar loan 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).

If you are considering a solar loan or lease, always ask:

  • Is there a down payment?
  • How much will I pay per month?
  • Will monthly payments increase, and by how much?
  • Will there be a lien on my house?

» SOLAR PANELS: Lease vs. buy

How much can I save with solar panels?

When you pay cash, the average 25-year savings with solar is $22,923 in South Dakota.

» EXPLORE: Where your solar savings go the furthest

How does net metering work in South Dakota?

In some states, net metering lets you sell any extra solar energy to your local utility company. South Dakota doesn’t have a statewide net metering policy, but some providers, like Xcel Energy, have buyback programs. Check with your local power company to find out what your options are.

» COMPARE: Best solar monitoring systems

Bottom line

South Dakota is No. 5 on our list of most environmentally friendly states. Not only does the state produce less pollution and more green energy than most, but it also offers property tax exemptions to homeowners with solar. You can save thousands from this incentive and the federal solar investment tax credit to make going solar in South Dakota more affordable.

» GUIDE: Solar panel installation

Solar costs: South Dakota vs. nearby states

*Before the federal investment tax credit (ITC); **When you pay in full upfront

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. EcoWatch, “Solar Panel Cost in South Dakota.” Accessed Nov. 19, 2023.
  2. Office of Energy Efficiency & Renewable Energy, “Homeowner’s Guide to the Federal Tax Credit for Solar Photovoltaics.” Accessed Nov. 19, 2023.
  3. Solar Energy Industries Association, “South Dakota Solar.” Accessed Nov. 19, 2023.
  4. DSIRE, “South Dakota Solar Programs.” Accessed Nov. 19, 2023.
  5. Windpower Engineering & Development, “New South Dakota bill streamlines wind & solar permitting.” Accessed Nov. 30, 2023.
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