Key takeaways
- No program installs free panels in South Dakota. The state did not apply for Solar for All, and the two awards that covered South Dakota homes have no application route today (checked October 5, 2026).
- Leases are legal but nobody sells them here; PPAs are not allowed. So zero-down solar in South Dakota means a loan, and you own the panels.
- No utility has to net meter. The six state-regulated utilities buy extra power at 2.48 cents per kWh to 4.871 cents per kWh, while the average home pays 14.20 cents per kWh to buy it.
- Power you use at home is worth the most. Size the system to your daytime use, not to your yearly bill.
- The one state break is property tax: the first $50,000 of the system’s assessed value, or 70%, whichever is greater. No income tax means no state credit, and the federal home credit ended after December 31, 2025.
About this review
We read every South Dakota rate sheet, statute, PUC page and program announcement listed in the sources between September 29 and October 5, 2026. This page explains programs and contracts. It is not tax, legal or financial advice.
How we choose sources and correct errors: editorial process and content standards.
South Dakota is the rare state where both halves of the usual answer are missing. No company offers free solar panels here, and no law makes your utility net meter. That leaves one question, and one phone call answers it: what does your utility pay for the power you send back?
The market is tiny but moving. South Dakota had 3.9 MW of home solar at the end of 2024, up 58.5% in a year, by a 2025 pv magazine count of federal data. It is one of 17 states with no residential lease or PPA sellers. On a base that small, a few hundred homes move the percentage a long way.
Solar for All in South Dakota: two awards, no route in
The state did not apply for the federal Solar for All grants in 2023. Two other groups won money that covered South Dakota homes in April 2024: the Coalition for Green Capital, $62.45 million for low-income homes statewide, including Tribal lands, and a 14-tribe coalition led by the MHA Nation, $135.6 million across five states, with the Oglala Sioux, Rosebud Sioux, Sisseton Wahpeton Oyate, Yankton Sioux and Flandreau Santee Sioux tribes among its members.
Status: No application route for households. EPA ended the Solar for All grants in August 2025. Federal courts in Rhode Island (September 18, 2026) and Washington, DC (September 22, 2026) ruled that unlawful. We found no South Dakota program taking applications. Checked October 5, 2026. If someone says you qualify for “the South Dakota solar program”, ask for its name in writing.
Zero-Down Solar in South Dakota: Only the Loan Is on the Shelf
In most states, “zero down” covers three contracts: a loan, a lease (you rent the panels for a monthly fee) or a PPA (power purchase agreement: you pay a company for each kWh, or kilowatt-hour, its panels on your roof make). Here the law closes one and the market leaves another empty.
| Contract | What South Dakota law says | Can you buy one here? | Who gets the utility’s buyback payment |
|---|---|---|---|
| Solar loan | No special rule | Yes, from installers, banks and credit unions | You |
Pros and cons in South Dakota: solar loanPros
Cons
Can fit if: your utility’s rate sheet is in hand and the payment is set against what you will stop buying, not what you will sell. | |||
| Lease | Allowed if you hold all rights to operate, maintain and control the system | We found no company offering one | Depends on the lease |
Pros and cons in South Dakota: leasePros
Cons
Can fit if: one appears, and the control clause and buyout price are in writing. | |||
| PPA | Retail power sales are for your assigned utility only | No | Not applicable |
Pros and cons in South Dakota: PPAPros
Cons
Can fit if: never, under the PUC’s current reading. | |||
Lease or PPA? South Dakota has no such choice. The South Dakota Public Utilities Commission (PUC) says that selling power at retail makes you a public utility, which is “not allowed by law”, and that a lease must leave you “all rights and abilities to operate, maintain and control the facility”. DSIRE’s May 2026 map lists South Dakota’s third-party PPA status as “unclear or unknown”, citing no South Dakota authority. For loan terms and lifetime cost, see our solar financing guide.
A typical 7.62 kW South Dakota system costs about $21,717 before incentives and makes about 11,262 kWh a year around Sioux Falls. With no credit to subtract, the loan covers nearly the whole price.
No Utility Has to Net Meter, So Read Yours
Net metering means each kWh you send to the grid cancels one kWh you buy. The PUC says South Dakota does not pay for solar at a net metered rate, and that the Legislature looked at a mandate in 2013, 2015 and 2016 and turned it down. Each utility files its own buyback price instead, and they differ.
| Utility | Rate sheet | Pays per extra kWh | Monthly charge | The catch |
|---|---|---|---|---|
| Otter Tail Power | Section 12.01 | 4.871 cents per kWh | $1.33 a month | Includes 0.3 cents per kWh for the renewable energy credit, which Otter Tail keeps |
| Montana-Dakota Utilities | Rate 95 | 3.416 cents per kWh | 7 cents a day | Contract of at least 12 months and less than 10 years |
| Xcel Energy | Rate Code E50 | 3.16 cents per kWh | $3.75 a month | Nothing paid above 2,000 kWh a month |
| NorthWestern Energy | Rate No. 73 | 2.547 cents per kWh | $2.00 a month | A capacity payment most home systems cannot reach |
| Black Hills Energy | Schedule 3 | 2.48 cents per kWh | Charged, amount not on the sheet | Unchanged since August 1, 2019; a rate case is open |
| MidAmerican Energy | Rate QF | 2.26 cents per kWh to 4.61 cents per kWh | $20.00 a month | Price moves by season and hour |
| Co-ops and city utilities | Own policy, filed with the PUC | Varies; Sioux Valley Energy lists 1.61 cents per kWh | Ask | The PUC does not approve these prices |
The gap is the whole story. 100 kWh you use at home saves you about $14.20 at the statewide average price. The same 100 kWh sent to Xcel earns $3.16. Our South Dakota solar incentives guide covers each rate sheet in detail.
What the Law Still Guarantees
If your utility offers nothing better, there is a floor. Under SDCL 49-34A-108, every electric utility, co-ops and city utilities included, must file with the PUC its minimum price for power from a small renewable system of 100 kW or less. Co-op filings on the PUC’s page can be old; some date from 2019. And East River’s December 22, 2025 filing for its member co-ops prices only systems of 50 to 150 kW, with nothing for a home-size system.
The one state benefit is property tax. Under SDCL 10-4-44, the first $50,000 of the solar system’s assessed value, or 70% of it, whichever is greater, is exempt, with no end date and no application. The Department of Revenue’s own example: a system assessed at $85,000 keeps $25,500 taxable. South Dakota has no state income tax, so there is no state credit to claim.
You Likely Will Not Qualify for Anything Free If
- You are answering a national “free solar” ad. No lease seller works here, PPAs are not allowed, and Solar for All has no route in.
- You assumed South Dakota has net metering. It does not. Extra power sells for a few cents a kWh.
- You are on a rural electric co-op that has not filed a home-size price. Ask for its written policy first.
- You expect a tax credit. There is no state income tax, and the federal home credit ended after December 31, 2025.
The Call That Settles It, Then the Offer Check
Here it starts with one call to your utility, before you speak to an installer.
- Ask your utility for its buyback rate sheet.
The price per kWh, the monthly charge, any cap, the contract term and whether the price is reviewed each year.
- Ask what insurance and paperwork it needs.
Xcel and Black Hills Energy ask for liability insurance of at least $300,000 per occurrence.
- Check the contract type on the quote.
Billed per kWh means a PPA, which the PUC says is not allowed. A lease needs the control clause.
- Check the size against your daytime use.
Compare expected output with your last year of kWh, and the price with what solar costs in South Dakota.
- Strike any tax credit or net metering from the savings math.
If either is there, the estimate is not built for South Dakota.
Pause if a seller promises free panels, names a government program that pays, or prices your exports at the retail rate.
Read our solar scam red flags guide and check bidders in our South Dakota solar companies guide.
Compare South Dakota Prices With Your Utility’s Rate Sheet Beside You
Ask each installer for the cash price, the loan terms and dealer fee, and the buyback price it assumed. Then check that price against your utility’s sheet.
Enter your ZIP code to compare South Dakota cash and loan prices
This is a commercial quote request, not a utility interconnection request or a Solar for All application. Which installers respond depends on your ZIP code and utility.
How EcoGen is paid
EcoGen America does not sell or install solar. When you request quotes, we pass your request to solar providers serving your area, and they pay us for the introduction. Providers can include installers, solar marketplaces and lead exchanges, and more than one may contact you. You never pay us.
Read how we make money and our privacy policy.
More South Dakota Solar Guides
South Dakota Solar FAQs
Can I get free solar panels in South Dakota?
No. No program installs panels at no cost today, and no company sells home leases here. South Dakota had 3.9 MW of home solar at the end of 2024, all of it bought.
Can I get zero-down solar in South Dakota?
Yes, with a loan from an installer, bank or credit union. You own the system. Leases are legal but no one offers them, and PPAs are not allowed.
Is Solar for All available in South Dakota?
Not today. The state did not apply. The Coalition for Green Capital and a 14-tribe coalition won awards covering South Dakota homes, but EPA ended the grants in August 2025. Courts ruled that unlawful in September 2026, and we found no application route. Checked October 5, 2026.
Does South Dakota require net metering?
No. The PUC says the state does not pay for solar at a net metered rate, and the Legislature declined a mandate in 2013, 2015 and 2016.
Which South Dakota utilities offer net metering anyway?
None of the six regulated utilities. Each buys extra power at its own filed price, from 2.48 cents per kWh at Black Hills Energy to 4.871 cents per kWh at Otter Tail Power. Co-ops and city utilities set their own terms, so ask yours in writing.
What if my South Dakota utility offers nothing?
Every utility, co-ops included, must file a minimum buyback price with the PUC for systems of 100 kW or less. Ask for that filing. If it covers only larger systems, get the co-op’s home policy in writing before you sign.
What should I ask before installing solar in South Dakota?
Call your utility first for its buyback price, monthly charge, cap, contract term and insurance rules. Then ask installers which buyback price they assumed.
Sources and review
South Dakota rate sheets, statutes, tax rules and program facts were checked between September 29 and October 5, 2026, against these sources. Rates change; the utility’s or agency’s current page always wins.
- South Dakota PUC, Compensation
- South Dakota PUC, filed rates for small renewable power facilities
- South Dakota PUC, 2026 electric dockets
- Xcel Energy rate book, Rate Code E50
- Xcel Energy rate book, conditions for small qualifying facilities
- Black Hills Power rate book, Schedule 3
- NorthWestern Energy rate schedule, Rate No. 73
- Otter Tail Power rate schedule, Section 12.01
- MidAmerican Energy tariff, Rate QF
- Montana-Dakota Utilities rate schedule, Rate 95
- Sioux Valley Energy, rate schedule effective February 2026
- Missouri River Energy Services, filing of October 31, 2025
- East River Electric Power Cooperative, filing of December 22, 2025
- South Dakota Codified Laws 49-34A-108
- South Dakota Department of Revenue, Renewable Resource Property Valuation Exemption Program
- South Dakota Codified Laws 10-4-44
- South Dakota Department of Revenue, taxes for individuals
- IRS, Residential Clean Energy Credit
- South Dakota Public Utilities Commission, Solar Energy FAQ, October 10, 2024 (lease and retail-sale rules; checked October 5, 2026)
- DSIRE / NC Clean Energy Technology Center, 3rd Party Solar PV Power Purchase Agreement map, May 2026 (checked October 5, 2026)
- pv magazine USA, States without residential solar third-party ownership may become “holes in the market” after 2025, July 22, 2025 (DSIRE and EIA data; checked October 5, 2026)
- EPA, Coalition for Green Capital to receive $62.45 million to deliver residential solar in South Dakota, April 22, 2024 (checked October 5, 2026)
- EPA, $198 million to deliver residential solar in North Dakota, including the MHA Nation’s Northern Plains Tribal award, April 22, 2024 (checked October 5, 2026)
- Indigenized Energy, EPA awards coalition of 14 tribes more than $135 million, April 23, 2024 (tribe list; checked October 5, 2026)
- Aberdeen Insider, “Solar For All,” But Not South Dakota: State One Of Six Not Applying For Grants, December 23, 2023
- South Dakota Searchlight via States Newsroom, Cancellation of solar energy grants is “another broken promise” for tribes, August 2025
- Office of Rep. Lizzie Fletcher, Two federal courts rule elimination of Solar for All unlawful, September 29, 2026 (D.D.C. September 22 and D.R.I. September 18 rulings)
Read our editorial standards.
