State solar incentives

Solar incentives in South Dakota to take advantage of

In South Dakota, solar panels pay for themselves in only 7 years, and after that, they start saving you quite a bit of your family budget. If you’re daunted by the high upfront costs, here’s our article on South Dakota solar incentives and rebates that can make this shift much easier.

Save 30% of your PV system cost with Federal Solar Tax Credit

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.

Join net metering program to cover your electric bills

A solar system pays for itself primarily through the net metering program. The essence of it is the same across all states: you sell solar energy that you haven’t used into the commercial grid and gain credits from the utility company for it. The credits later can be used to cover your electric bills. South Dakota, unfortunately, doesn’t have a statewide net metering policy. That means that the options and conditions of selling solar energy into the grid have to be discussed with the utility directly. Ask your electric supplier and installer about the possibility of net metering beforehand.

Commercial and residential solar systems get a partial property tax exemption

In South Dakota, solar systems under 5MW are exempt from property taxes. Not completely: the exemption stands for first $50,000 or 70% of the assessed value of a system, whichever is greater. Since the average cost of a home solar system in the US ranges from $10,000 to $30,000, that means residential installations almost always get a full exemption.

In South Dakota, the first $50,000 or 70% of assessed value of a less than 5 MW solar system are exempt from property taxes.

Commercial solar has an alternative tax policy in South Dakota

There is an alternative tax policy for commercial solar systems greater than 5MW in size in South Dakota. Instead of all taxes on real and personal property established by the state, the county or the municipality, there is an annual tax of $3 per kW and an annual production tax of $0.00090 per kWh of electricity produced. This South Dakota solar incentive is aimed at speeding up the rise of the industry in the future.

Solar easements help settle the debates with neighbors

When you install a solar system, it’s important that it gets as much sunlight as possible. Sometimes objects on your neighbors’ land can deprive your installation of the sun and cast shadows over your PV modules. Therefore South Dakota solar laws include the guidelines for solar easements: documents that secure your right to adequate exposure of a system to the sunlight. Easements have to be written down and recorded in the office of the county’s register of deeds. A document can last for up to 50 years. According to South Dakota Codified Laws, it shall include:

  • A legal description of the real properties: the one that is subject to the easement and the one that benefits from it;

  • A description of the vertical and horizontal angles (in degrees) and distances from solar system in which an obstacle to the sunlight is prohibited or limited;

  • Terms and conditions under which the easement is negotiated or may be ended;

  • Any provisions for compensation of the owner of the real property who benefits from the document in the case of interference with the enjoyment of the easement, or compensation of the one who maintains the easement;

  • Any other provision necessary or desirable to execute the instrument.

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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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