Xcel Just Raised Solar*Rewards From 3 Cents to 5 Cents per kWh
The PUC docket and Xcel have increased the Minnesota Xcel Solar*Rewards production incentive from 3 cents to 5 cents per kilowatt hour as it pertains to the docket no. M-13-1015. The higher rate applies to installation agreements started in 2026. On a typical Minnesota home, that is roughly $2,000 to $2,500 more paid out over the ten year term, for a system you were already going to install. That is the whole announcement. The rest of this page is what it means for your house.
What Solar*Rewards actually pays
Solar*Rewards is a production incentive. Xcel pays you for every kilowatt hour your panels make, for ten years, whether your home uses that power or sends it back to the grid. It is not a rebate on the purchase price and it is not the same as net metering. It is a separate check based on output. A typical 10 kW system in Minnesota will produce 12,500 kWh per year. Here is what the change looks like at four common system sizes.
What the increase pays, by system size
| System size | Pays per year at the new 5¢ | Your Rebate over ten years |
|---|---|---|
| 6 kW7,500 kWh a year | $375was $225 | $3,750 |
| 8 kW10,000 kWh a year | $500was $300 | $5,000 |
| 10 kW12,500 kWh a year | $625was $375 | $6,250 |
| 12 kW15,000 kWh a year | $750was $450 | $7,500 |
Production estimated at 1,250 kWh per kW of installed capacity per year, typical for Minnesota. Solar*Rewards pays on everything your system produces for ten years, separate from your net metering bill credits. Your actual figures depend on roof orientation, pitch and shade, which is what we measure before quoting.
The gain scales with system size, so the bigger your electric bill, the more the increase is worth to you.
Who gets the 5 cent rate
The 5 cent rate is confirmed for installation agreements started in 2026. If your project began this year, you are inside the window. If you have been sitting on a quote from last spring, the number on that quote is now understated. Two things worth knowing. Solar*Rewards is allocated in program capacity blocks rather than being open ended, so enrollment timing matters and the program does not stay open indefinitely at a given rate. And Xcel has not announced a rate for 2027. The rate has moved in both directions in past program years, so 5 cents is confirmed for 2026 and nothing beyond that is confirmed at all.
It stacks with everything else
Solar*Rewards is one of three separate things a Minnesota Xcel customer gets, and they do not cancel each other out. Net metering credits your bill at the retail rate for power you export. Solar*Rewards pays you on top of that for total production. And any sales tax exemption you qualify for is separate again. The mistake we see most often is a homeowner comparing quotes where one installer showed all three and another showed one. Ask for all three on the same worksheet. If a proposal does not break them out, that is worth a question.
What to do about it
If you already have solar on an Xcel account, nothing here requires action from you, but it is worth confirming which rate your enrollment carries. If you have a quote in hand, it needs to be re-run. The Solar*Rewards line on it was built on 3 cents. If you have been thinking about it, the practical point is that the incentive side of the math just improved without you doing anything, and the 2027 rate is unknown.
Frequently asked questions
Did Xcel raise the Solar*Rewards rate for 2026? Yes. The production incentive went from 3 cents per kWh to 5 cents per kWh, confirmed for installation agreements started in 2026. How much is the increase worth? On an 8 kW system producing about 10,000 kWh a year, 3 cents paid about $300 annually and 5 cents pays about $500. Over the ten year term that is about $2,000 more. A 12 kW system gains closer to $3,000. Do I still get it if my system was installed earlier this year? The rate is tied to installation agreements started in 2026, so systems that began this year fall inside the window. Confirm your specific enrollment, because Solar*Rewards is allocated in blocks and enrollment date matters. Is Solar*Rewards the same as net metering? No, and they stack. Net metering credits your bill for exported power. Solar*Rewards pays you separately for total production. What is the 2027 rate? Not announced. The 5 cent rate is confirmed only for install agreements started in 2026. Want the number for your actual roof and your actual bill? We will run it at 5 cents and show you Solar*Rewards, net metering and the sales tax exemption on one page, with no obligation.
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