Xcel Energy Solar in 2026: Rates, Net Metering, and SolarRewards Explained

If your home is in the Twin Cities metro and you’re thinking about solar, you’re almost certainly an Xcel Energy customer. That makes Xcel the single most important factor in understanding how solar will work for you: how it reduces your bill, what it pays you for excess production, and what incentive programs are available.

Xcel’s relationship with solar is active and changing. Here’s the full picture as of 2026.

Xcel Energy Rates in 2026: Why They Matter for Solar

Xcel Energy’s residential electricity rates in Minnesota have been on a gradual upward trajectory over the past several years, reflecting infrastructure investment, grid modernization, and evolving fuel costs. The exact current rate per kilowatt-hour depends on your billing tier and season: Xcel publishes current rate schedules on their website.

Here’s why this matters for solar: every kilowatt-hour your solar system produces is a kilowatt-hour you don’t buy from Xcel at the current retail rate. As rates increase, the value of each kWh your system produces increases with it. Solar savings are not fixed; they grow in proportion to the rate.

This is a meaningful difference from how most people think about cost savings. Solar isn’t a product that saves you a fixed amount per year: it’s a hedge against future rate increases. The longer your system operates, the more compounding benefit you get from rate increases you no longer pay.

For homeowners evaluating solar ROI, this dynamic consistently makes long-term economics better than the first-year numbers suggest.

Minnesota Net Metering: The 1:1 Rule

Minnesota’s net metering law guarantees that Xcel Energy customers with solar receive credit for excess generation at the full retail rate. One kilowatt-hour exported to the grid earns one kilowatt-hour of credit against future consumption. This is 1:1 net metering.

What this means in practice: when your panels produce more than your home is using at a given moment (most often sunny midday hours when your household load is lower), that excess flows to the grid and Xcel credits your account. Those credits carry forward on your bill. Over a full year, many well-sized systems generate enough to largely offset annual consumption.

The 1:1 rate is established by Minnesota state law for systems up to 40 kW (which covers all residential systems and most small commercial). It is not a program that can be modified by Xcel’s rate cases. This makes Minnesota net metering one of the more favorable and stable elements of the solar economics here.

Xcel’s Solar*Rewards Program in 2026

Solar*Rewards is Xcel Energy’s ongoing incentive program that pays Minnesota residential solar customers an additional per-kilowatt-hour payment for solar energy generated. This is separate from net metering: it’s production-based income on top of the bill reduction.

Key features of Solar*Rewards:
– Payments are based on actual production, measured at the system’s production meter
– Program enrollment is for a 10-year term
– The incentive rate is tiered and changes as program capacity fills: earlier enrollees generally receive better rates than later ones in the same program cycle
– Payment is in addition to, not instead of, net metering credits

Important: SolarRewards rates change as program levels fill. Centauri always presents current, verified SolarRewards rates in proposals, but never commit to a specific rate figure from a third-party source. Always check the current program status directly at co.my.xcelenergy.com/s/renewable/solar-rewards.

The combination of Solar*Rewards payments and net metering credits makes the first 10 years of a Xcel-connected solar system significantly more financially productive than the 10 years that follow. This is one reason why getting into the program sooner rather than later is financially sensible: earlier enrollment tends to mean better program rates.

Xcel’s Interconnection Process: What to Expect

Getting your solar system connected to the Xcel grid requires an interconnection application. This is a formal approval process where Xcel reviews the system design, verifies it meets technical requirements, and authorizes the two-way meter setup needed for net metering.

For most residential systems in the Twin Cities, interconnection approval is a straightforward process: Xcel has a well-developed pipeline for residential solar given the volume of installations in the metro. Timeline is typically 2–6 weeks from application submission to approval, though it can extend in periods of high volume.

A qualified installer handles the interconnection application as part of their service. You should not need to interact with Xcel directly: your installer navigates the process and lets you know when you’re cleared to turn on.

What you do need: Xcel to install a production meter (in addition to your existing consumption meter) to measure Solar*Rewards-eligible production separately from net consumption. This meter swap is coordinated as part of the interconnection process.

Time-of-Use Rates and Solar

Xcel has been rolling out time-of-use (TOU) rate options for residential customers. TOU rates mean electricity costs more at peak hours (typically late afternoon and evening in summer) and less at off-peak times (overnight, early morning).

The interaction with solar: your panels produce most of their power during daytime hours, which are often off-peak. If you’re exporting power during off-peak hours (low rate) and drawing power during peak hours (high rate), TOU can work against solar economics compared to a flat-rate structure.

This is an area where battery storage can help significantly. A battery charged by your panels during low-rate daytime production can discharge during high-rate evening hours, maximizing the financial value of your solar output. For homeowners on TOU rates, the economics of adding battery storage are worth analyzing.

If you’re considering solar on Xcel and your rate structure is or may become TOU, ask your installer to model your economics under both flat and TOU scenarios.

What Changed for Xcel Solar Customers in 2025–2026

The landscape for Xcel solar customers has evolved over the past year. Key things to know:

Rate increases: Xcel Energy received regulatory approval for rate adjustments in the Minnesota market. Higher baseline rates mean higher savings value per kWh produced.

Solar*Rewards program: The program is active and accepting applications. Check current program tier and rate at the Solar*Rewards page before making financial decisions.

Net metering: Minnesota’s 1:1 net metering law remains in effect and was not modified in recent legislative sessions.

For Centauri’s current view on Xcel solar economics and what to expect from a Twin Cities installation, visit solarbycentauri.com.

FAQ: Xcel Energy Solar in 2026

Does Xcel Energy pay for solar energy sent back to the grid?
Yes. Under Minnesota’s 1:1 net metering law, Xcel credits solar customers at the full retail rate for excess generation sent to the grid. Xcel’s Solar*Rewards program provides additional production-based payments for the first 10 years of enrollment.

What is the Xcel Solar*Rewards program?
Solar*Rewards is an incentive program that pays enrolled Xcel solar customers a per-kWh payment for their system’s production over a 10-year term. Rates are tiered and change as program capacity fills. Check current rates at co.my.xcelenergy.com/s/renewable/solar-rewards.

Has Xcel raised electricity rates in Minnesota recently?
Yes. Xcel rates have increased over recent years. Higher rates mean greater per-kWh savings value from solar production, which generally improves solar ROI as time passes.

How long does Xcel interconnection take?
Typically 2–6 weeks from application submission for most residential systems. Your installer manages the interconnection process.

Does Xcel’s time-of-use rate affect solar savings?
It can. TOU rates create a mismatch between when panels produce (daytime/off-peak) and when power is most expensive (evening peak). Battery storage can address this by shifting solar production to peak-rate discharge times.