Minnesota continues to lead in renewable energy adoption, offering a robust set of incentives for homeowners and farms interested in solar. In 2026 state and utility-specific programs can significantly reduce the cost of solar installations and improve long-term savings. Here’s a detailed overview of the best options available.

1. State-Level Incentives

Sales Tax Exemption

Minnesota exempts all solar system components; panels, inverters, and mounting hardware from the state’s 6.875% sales tax, reducing upfront costs.

Property Tax Exemption

The added value from a solar energy system is fully exempt from property tax, allowing homeowners to add value without incurring higher taxes, aligning with guidance in Financial Benefits for MN Homeowners.

2. Utility-Specific Programs

Xcel Energy Solar*Rewards

Xcel offers a 10-year performance-based incentive at $0.05/kWh in 2026, plus net metering credits. For income-qualified customers, an upfront incentive of $3.00 per watt (up to 6 kW) dramatically reduces initial costs, and the production incentive for income-qualified participants is 3 cents per kWh rather than the standard 5 cents. Learn more from our 2026 Guide to Xcel Solar Rebates and Incentives.

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.

Minnesota Power SolarSense

Participants receive a rebate of $0.27 per kWh of expected annual production capped at $5,000. Funding is awarded by lottery, household income must be below 150% of area median income, and projects in Disadvantaged Communities and Tribal Lands get priority. More on this is in our Rebates and Credits section.

Dakota Electric Association Rebate

Dakota Electric offers a flat $500 rebate for residential solar installations commissioned in 2026, simple documentation and 8–12 weeks for payment.

3. Financing Options in Minnesota

MNCEE (Minnesota Center for Energy and Environment)

Through the Minnesota Housing and Finance Agency (MHFA) and the Minnesota Department of Commerce, CEE offers home energy loans for MN homeowners making energy improvements.

Affinity Financing

Make going solar easy and affordable. Explore Affinity Financing, choose from personal secured and home-equity solar loans with fast pre-qualification. Choose from a range of terms.

OneEthos Financing

OneEthos offers straightforward solar financing with competitive interest rates. This option is perfect for homeowners who want to own their system while keeping monthly payments manageable.

Learn more about these options under Centauri’s Financing & Incentives resources.

4. Net Metering

Minnesota’s net metering program allows systems up to 40 kW to receive credits for excess energy sent back to the grid—reducing monthly bills during low-production periods.

5. Community Solar Programs

For those unable to install panels on-site, community solar offers a compelling alternative. Participants subscribe to a shared solar installation and receive bill credits proportional to their share. Minnesota hosts one of the nation’s most robust community solar markets.

6. Solar for Agriculture & Farms

Minnesota also supports solar for agriculture, enabling farms to integrate solar into their energy mix:

• Federal REAP grants (Rural Energy for America Program), often used by farms—learn more via Centauri’s articles on Minnesota business solar benefits
• Agrivoltaics blends solar energy with crop production, optimizing land use and generating dual benefits for renewable energy and agriculture.

 

Summary Table of 2026 Solar Incentives in Minnesota

 

Incentive Type	Benefits
State Sales & Property Tax	Full sales and property tax exemption
Xcel Solar*Rewards	$0.05/kWh standard; income-qualified: $3/watt upfront + $0.03/kWh
Minnesota Power SolarSense	$0.27/kWh, up to $5,000 (income limits apply)
Dakota Electric Rebate	$500 flat rebate
MNCEE, Climate First, Concert	Affordable financing options
Net Metering	Credit for excess grid energy
Community Solar	Subscription for off-site solar
Solar for Agriculture	Grants and system integration for farms

 

Why 2026 is a Great Year for Solar

With state breaks, utility rebates, and financing tools, 2026 is one of the best years in Minnesota’s history to install a solar or renewable energy system. These programs make clean energy accessible, affordable, and practical for all kinds of households, and even farms. Whether your focus is solar for farms, solar for agriculture, or clean energy, the resources available are stronger than ever.

Thinking about going solar? Contact Centauri Systems today to see how you can benefit by tapping into these incentives.o harness the benefits of solar power.