Minnesota Solar Property Tax Exemption: What Homeowners Need to Know

One of the consistent concerns Minnesotans raise before going solar is this: if I add a solar system to my home and it increases the home’s value, will my property taxes go up?

The short answer is no — and it’s not a gray area. Minnesota law specifically protects solar homeowners from property tax increases tied to their solar installation. Here’s how it works, what it covers, and why it’s worth understanding as part of your total solar cost picture.

The Law: Minnesota’s Solar Energy System Property Tax Exemption

Under Minnesota Statute § 272.02, subdivision 24, active solar energy systems are exempt from property tax assessment. This means that the value added to your home by a solar installation is not included in your home’s assessed value for property tax purposes.

In practical terms: if a solar system adds $15,000 to your home’s market value, your property tax assessment does not increase because of it. You’re adding value to your home without adding to your property tax bill.

This exemption applies to:
– Residential solar installations (roof-mount and ground-mount)
– Systems used primarily for on-site energy production
– Both new installations and retrofits

The exemption is not a one-time benefit — it continues for as long as the solar system is in operation and is assessed as part of the property.

Why This Matters for the Financial Case

When you evaluate the total return on a solar investment, the property tax exemption has two effects:

It eliminates a cost that would otherwise exist. Without this exemption, a solar system that adds $15,000 to your home’s assessed value at a 1.5% effective tax rate would cost you $225 per year in additional property taxes. Over a 25-year system life, that’s $5,625 in additional taxes you’re NOT paying because of this exemption.

It confirms that home value addition is real. The fact that Minnesota explicitly exempts solar from property tax assessment reflects the state’s recognition that solar installations genuinely add home value. Research consistently shows solar homes sell for more than comparable non-solar homes. The tax exemption is the state’s formal acknowledgment of that.

When Centauri Systems builds out a savings projection for a homeowner, the property tax exemption is part of the complete financial picture — alongside utility bill savings, net metering credits, and available rebates.

What Qualifies as an “Active Solar Energy System”

Minnesota’s statute defines an active solar energy system as a set of devices designed to collect, store, or distribute solar energy for space or water heating, cooling, or generating electricity.

Residential photovoltaic (solar panel) systems clearly qualify. This includes:
– Roof-mounted solar panel arrays
– Ground-mounted solar panel arrays
– Battery storage systems combined with solar
– Solar water heating systems (separate from PV)

Systems must be “active” — meaning they have mechanical components like panels, wiring, inverters — as opposed to passive solar design features like south-facing windows. Passive features generally don’t qualify for the exemption.

The Sales Tax Exemption: A Related Benefit Worth Knowing

The property tax exemption is often confused with Minnesota’s sales tax exemption for solar equipment, which is a separate benefit. Both apply to most residential solar purchases.

Under Minnesota Statute § 297A.67, solar energy systems and their components are exempt from Minnesota sales and use tax. When you purchase a solar installation in Minnesota, you pay no state sales tax on the equipment.

For a typical 8-10 kW system, the sales tax exemption saves homeowners $1,000-$2,000 at the time of purchase. This is already reflected in Centauri’s proposal pricing — the installation quote you receive does not include MN sales tax on equipment.

How to Confirm the Exemption Applies to Your Property

The property tax exemption is automatic for qualifying systems — you don’t need to apply for it separately. When Centauri installs your system and files the necessary permits, the installation is documented. Your county assessor should not increase your property’s assessed value based on the solar installation.

If you ever receive a property tax assessment that appears to reflect the solar system’s value, you have the right to appeal. Contact your county assessor’s office and reference Minnesota Statute § 272.02, subdivision 24.

For authoritative information, the Minnesota Department of Revenue property tax pages provide the statutory background. Your county assessor’s office can also confirm how the exemption is applied locally.

How This Compares to Other States

Minnesota’s solar property tax exemption is solid and well-established. Many states offer similar exemptions, but the specifics vary significantly. Some states cap the exemption by dollar amount, time period, or system size. Minnesota’s exemption has no dollar cap and no time limit tied to the system age — it runs as long as the system is active.

For homeowners considering a move at some point in the future: the solar installation adds to home value (confirmed by national research from organizations like Lawrence Berkeley National Laboratory), and that value isn’t eroded by an ongoing property tax penalty. The buyer of your home benefits from the same exemption, which makes the solar asset more attractive in a sale.

The Full Incentive Picture for Minnesota Solar

The property tax exemption is one part of a broader set of Minnesota solar incentives. For reference, here’s where it fits:

No MN sales tax on solar: Saves $1,000-$2,000 at purchase. Applies statewide.

MN solar property tax exemption: Eliminates property tax increases from solar value addition. Applies statewide, ongoing.

MN 1:1 net metering: Credits excess electricity sent to the grid at the full retail rate. State law, applies to all MN utilities.

Xcel Solar*Rewards: Production incentive for Xcel Energy customers, 5¢ per kWh for agreements signed in 2026. See current rate at co.my.xcelenergy.com/s/renewable/solar-rewards.

Minneapolis Green Cost Share: A one-time incentive based on estimated production, for eligible Minneapolis homes through a city-approved group buy partner. Check your address at minneapolismn.gov/green-cost-share.

Dakota Electric and Minnesota Power rebates: For customers of those utilities. Check directly with your provider.

Note: The federal residential Investment Tax Credit (ITC) ended for systems installed after December 31, 2025, and is no longer available for new residential solar.

See Centauri’s complete incentive and rebates resource at solarbycentauri.com/rebates-and-credits.

Frequently Asked Questions

Is the Minnesota solar property tax exemption automatic or do I need to apply?
The exemption is automatic for qualifying systems. You don’t need to file a separate application. If your assessed value increases because of a solar installation, contact your county assessor and reference Minnesota Statute § 272.02, subdivision 24.

Does the exemption apply to ground-mounted solar systems?
Yes. Minnesota’s solar property tax exemption applies to both roof-mount and ground-mount solar energy systems installed for on-site energy production.

Does the property tax exemption expire after a set number of years?
No. Minnesota’s exemption does not have a time limit tied to the age of the system. It applies for as long as the system is active and part of the property.

If I sell my home, does the buyer benefit from the property tax exemption?
Yes. The exemption follows the property, not the original owner. A buyer of a solar-equipped home receives the same property tax exemption on the solar system’s value.

Where can I find the official Minnesota solar property tax exemption statute?
Minnesota Statute § 272.02, subdivision 24 is the governing provision. The Minnesota Department of Revenue property tax pages and your county assessor’s office are the authoritative local references.

Going solar in Minnesota is one of the cleaner financial decisions a homeowner can make — and the property tax exemption is one reason why. Request a free quote from Centauri Systems and see the full financial picture, including all applicable Minnesota incentives, for your specific home.