National Tax Day is approaching! Don't forget to claim a 30% Solar Tax Credit for your solar system. Read about Solar Tax Credit.
Even in northern areas, solar panels can help you save money on your bills. To cut down on the upfront costs of a PV system, take advantage of solar incentives in Minnesota.
Key takeaways
The US government wants more people to go solar: it’s a modern and green way of getting energy. This is why the Solar Investment Tax Credit (ITC) program was developed. It allows American citizens to claim 30% of the cost of their installation as an income tax deduction. The cost here is not only solar panels, but also shipping, installation expenses and more. For example, if your system overall made you spend $10,000, the government returns you $3,000. To claim the ITC, complete all the necessary forms and submit them when filing your taxes. The incentive comes in two forms – Residential Renewable Energy Tax Credit for home systems and Business Energy Investment Tax Credit for commercial installations.
In Minnesota, solar energy systems purchased on or after August 1, 2005 are exempt from sales tax. The sales tax exemption covers all components of these systems, including panels, wiring, and racks. Buyers need to complete Minnesota Department of Revenue Form ST3, “Certificate of Exemption,” to claim the exemption. This exemption has no time limit.
Solar laws in Minnesota make net metering programs available to customers of all municipal and investor-owned utilities, as well as to those served by electric cooperatives. The program gives households an opportunity to send any excess electricity back to the grid instead of storing it with batteries.
When you sell your solar power to the utility, you receive credits that can be used to offset your next bills. In Minnesota, their value is equal to full retail electricity price. If you have any unused credits at the end of the calendar year, they will be reimbursed at the utility’s avoided cost rate. In case you are a client of an electric cooperative or a municipal utility, the credits will expire without any compensation.
Renewable Energy Credits are certificates granted to any person or entity upon generation of each Megawatt-hour of clean electricity. Unlike with net metering, you don’t need to sell any electricity to get credits. The value of RECs is always changing, which makes them similar to stock market assets. Based on the available data, selling RECs could mean anywhere from $300 to $1,000 annually for a 10kW solar system. To participate, you have to apply for approval to the Minnesota Public Utilities Commission. After that, you can create a REC account with the Midwest Renewable Energy Tracking System (M-RETS) to begin storing and selling your credits.
Some Minnesota utility companies provide nice rebates for homeowners. It’s always best to contact your electric provider and ask if they offer programs that you might be eligible for:
Minnesota Power offers the SolarSense rebate program. To qualify for the program, your system must be installed by a NABCEP or UL-certified professional who must offer a 2-year workmanship warranty. The panels must have at least a 20-year performance warranty and the inverters at least a 10-year one. The funds are allocated on a first-come, first-served basis. The program begins application processing on March 1 each year. All RECs produced by the system are retained by Minnesota Power.
In Minnesota, solar equipment is exempt from the state’s sales tax, meaning that an additional 6.88% and all applicable local rates stay in your pocket. Solar equipment includes any device used to convert sunlight into energy. Anything needed to prepare the energy for storage or put it to use is also subject to the exemption, even the racks. Thus, everything you need to build a PV system of any scale can be bought in Minnesota tax-free. To claim the exemption, buyers must complete Form ST3.
In Minnesota, you don't have to pay any extra taxes for having solar panels. According to state laws, 100% of the value added as a result of acquiring a solar PV system shall be exempt from taxation. To claim the exemption, contact your local tax assessor.
4%
this is how much solar panels increase the value of your house
The Fix-Up program allows homeowners in Minnesota to take a loan to cover costs associated with acquiring a PV system. The loan amount is limited to $75,000 and the maximum term length is 20 years. You can finance an already-started project and hire a contractor yourself. There is no prepayment penalty.
A solar easement contract is a written agreement between two property owners, for example, you and your neighbor. This type of contract helps to maintain a stable supply of sunlight for your PV modules. A solar easement guards your panels from potential impairments, such as vegetation and structures. It is voluntary and must contain the description of protected space, a list of restrictions and a clause on revision or termination of the contract. Once signed, it is tied to the land, not the owner. Any such agreement must be created in written form and must meet the general requirements for easements on real property.
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Years of experience in translation and a love of nature help Julia find the right words to encourage going solar. She joined the team in 2023 and is happy to make her contribution to a greener future.
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