Every Minnesota Solar Incentive Available in 2026: A Homeowner’s Guide

The incentive picture for Minnesota solar has changed over the past couple of years. Some programs have shifted. Some have gone away. What’s available right now — and how to actually use it — is worth knowing before you make a decision.

This is the complete breakdown of every meaningful solar incentive available to Minnesota homeowners in 2026, focused on what’s actually current and accessible.

Minnesota State Sales Tax Exemption

This one is simple and valuable: solar energy systems are exempt from Minnesota sales tax.

That means when you purchase a residential solar installation, you don’t pay sales tax on the equipment or the installation labor. For a system in the typical residential price range, this exemption represents a meaningful direct reduction in upfront cost — and it requires no application, no income qualification, and no separate process. It’s automatic.

This is one of the cleanest solar incentives available anywhere in the country. Minnesota made this policy decision to reduce a straightforward barrier to solar adoption, and it applies regardless of which installer you use or which equipment you choose.

Minnesota Property Tax Exemption on Added Home Value

Here’s one that surprises people: in Minnesota, the added value that solar panels bring to your home’s assessed value is exempt from property taxes.

Under Minnesota Statute 272.02, the increased market value attributable to a qualifying solar energy system is excluded from property tax assessment. That means you can increase your home’s value by going solar without a corresponding increase in your property tax bill.

For homeowners who plan to sell eventually, this also matters for resale: solar adds real market value, and you don’t pay property taxes on that increment while you own the home.

No application required. The exemption applies automatically as long as the system qualifies under the statute.

Xcel Energy Solar*Rewards Program

If you’re an Xcel Energy customer — which covers most of the Twin Cities metro and much of greater Minnesota — the Solar*Rewards program is the primary utility-side incentive to know about.

Solar*Rewards provides a per-kilowatt-hour (kWh) payment for the energy your solar system produces, in addition to standard net metering credits. It runs for 10 years from the system’s interconnection date.

The 2026 rate is 5 cents per kWh. Xcel raised Solar*Rewards from 3 cents to 5 cents per kWh for agreements signed in 2026, paid yearly for ten years. On a typical 10 kW system producing about 12,500 kWh a year, that is about $625 a year, or $6,250 over the ten-year term. Income-qualified Solar*Rewards works differently: up to $3 per watt paid upfront, plus 3 cents per kWh produced. Our Solar*Rewards rate increase breakdown shows the math at other system sizes. Xcel has not announced a 2027 rate, so check the Xcel Solar*Rewards program page before you plan around it.

What doesn’t change: the structure of the program. You produce solar energy, Xcel credits you for net metering at retail rate, AND pays you an additional Solar*Rewards production incentive for 10 years. The combination of net metering plus Solar*Rewards is what makes Xcel’s service territory one of the more favorable environments for residential solar in the Midwest.

Xcel Energy Service Panel Upgrade Rebate

Many Minnesota homes need a main service panel upgrade before adding solar, a battery or an EV charger. Xcel Energy offers a rebate of up to $1,500 toward that upgrade, and it is one of the incentives homeowners most often miss. If your project includes a panel upgrade, ask us whether your home qualifies and how to claim it.

Minneapolis Green Cost Share Program

This incentive is specifically for Minneapolis homeowners, and it’s worth knowing about: the Minneapolis Green Cost Share program provides financial support for energy-efficient improvements including solar installation.

For 1 to 4 unit homes, the city pays a one-time incentive of 20 cents per kWh of your system’s estimated annual production. Homes in a Minneapolis Green Zone get 40 cents, and properties that qualify as low-income supporting (for example, Income Qualified Solar*Rewards or Energy Assistance households) get 45 cents. On a system estimated at 10,000 kWh a year, the base rate works out to about $2,000.

Homeowners do not apply directly. The city distributes residential solar funds through approved group buy partners, so your home has to be included in one of their applications. Check the city’s Green Cost Share solar page for the current list of partners before you count this in your budget.

If you do qualify, this program can stack with state-level incentives and Xcel programs for meaningful total savings. Centauri is the installer for Solar United Neighbors’ Solar Switch, one of the city’s approved group buy partners, and has been for the past two years. Solar Switch runs each summer, so if you’re in Minneapolis, ask us about joining the next round.

Minnesota Battery Storage Incentive

If you add a home battery with your solar system, Minnesota has a separate upfront incentive for storage up to 50 kWh. Xcel Energy customers get $175 per kWh of battery capacity ($370 per kWh for income-qualified customers), capped at $5,000. Customers of other utilities get $250 per kWh, capped at $7,000, through the Minnesota Department of Commerce.

Funding is limited and paid out first come, first served. As of October 7, 2026, the Commerce program for customers outside Xcel territory had about $1.4 million left. Check the Department of Commerce storage incentive page for the current balance, and ask us how a battery changes your quote.

CEE (Center for Energy and Environment) Financing

The Center for Energy and Environment offers financing programs for energy improvements in Minnesota, including solar. CEE programs often feature below-market interest rates, and some programs have enhanced rates or terms for income-qualified households.

Financing through CEE is an alternative (or complement) to installer financing programs. For homeowners who prefer not to use home equity or who don’t qualify for the best rates through standard solar lenders, CEE is worth evaluating.

CEE programs change in terms and availability, so check their current offerings at mncee.org or ask a Centauri advisor about what’s active when you’re ready to move forward. For comparison with other financing paths, see solarbycentauri.com/financing-options.

A Note on the Federal Incentive

The federal residential solar tax credit ended for systems installed after December 31, 2025. It is not available for systems installed in 2026 or later. This guide focuses on what is currently accessible to Minnesota homeowners in 2026.

How to Use These Incentives Together

The best outcome comes from stacking available incentives rather than relying on any single one. A typical scenario for an Xcel Energy customer in the Twin Cities metro:

Start with the state sales tax exemption (automatic, no action needed). Factor in the property tax exemption as a long-term benefit. Enroll in Solar*Rewards at interconnection through your installer, which runs for 10 years. Combine with net metering for ongoing bill reduction. Adding a battery? Apply for the state storage incentive before funds run out. If you’re in Minneapolis, find out early whether a Green Cost Share group buy partner can include your home, since funding is limited. Explore CEE financing if standard financing options aren’t a fit.

Centauri walks through the incentive stack as part of every homeowner consultation. None of these require you to sort it out alone.

Frequently Asked Questions

What solar incentives are available in Minnesota in 2026?
Minnesota homeowners can access the state sales tax exemption on solar equipment and installation, the property tax exemption on solar-added home value, Xcel Energy’s Solar*Rewards production payment (for Xcel customers), 1:1 net metering through Xcel, the Minneapolis Green Cost Share (through approved group buy partners), the state battery storage incentive, and CEE financing programs.

Is the federal solar tax credit still available in 2026?
The federal residential solar tax credit ended for systems installed after December 31, 2025. It is not available for systems installed in 2026 or later. Consult a tax professional for any questions about your specific situation.

How much is the Xcel Solar*Rewards payment?
It is 5 cents per kWh your system produces, paid yearly for ten years, for agreements signed in 2026. On a 10 kW system that is about $625 a year. Xcel has not set a 2027 rate, so confirm the current rate at Xcel’s Solar*Rewards page.

Does the Minneapolis Green Cost Share program cover all Minneapolis addresses?
Any 1 to 4 unit home in the city can qualify for the base rate, but you have to go through a city-approved group buy partner, and the higher Green Zone rate depends on your address. Centauri installs for Solar Switch, one of the approved partners, which runs each summer.

Can I stack multiple incentives on one solar installation?
Yes, and you should. The state sales tax exemption, property tax exemption, Solar*Rewards, and net metering can all apply to the same installation. Minneapolis homeowners may also add the Green Cost Share on top of those.

Does Xcel Energy help pay for a service panel upgrade?
Yes. Xcel Energy offers a rebate of up to $1,500 toward a main service panel upgrade for qualifying homes. Ask us whether your project qualifies.