Minnesota Solar: Net Metering Everywhere, a Fee at Some Co-ops

Written by Dean Mahmoud, CEO, and checked by Trevor Guilday, founder.Prices from the September 2026 Cost Index. Utility rates read September 29 to October 6, 2026. Updated October 14, 2026.

A typical Minnesota home system is 8.06 kW and costs about $25,067 in cash at $3.11 per watt. Our two worked cases pay back in 16.6 to 18.7 years. Net metering covers every utility, co-ops included, but co-ops and city utilities may add a monthly fee for solar homes.

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What Minnesota’s net metering law pays for each solar kWh

Under Minn. Stat. 216B.164, every utility in Minnesota bills a home system under 40 kW only for the power it takes minus the power it sends out. Even month-end extra power earns close to the average price: 15¢ at Xcel against a 16.22¢ state average.

Power you use or net within the month your full price

  1. Your home uses solar power the moment the panels make it.
  2. Power you send out during the month cancels power you take, kWh for kWh.
  3. Each of those kWh saves your full price: 16.22¢ is the state average.

Extra power at the end of the month 9.264¢ to 17.656¢

  1. If you send out more than you take in a month, your utility pays for the difference.
  2. It pays its average retail energy rate: your price per kWh without the fixed charges.
  3. At Xcel Energy that is 15¢ from October to May and 17.656¢ from June to September.
Typical 8.06 kW system, $25,067 cash, 11,282 kWh a year
Case and export ruleYear-one savingsAfter upkeep and feesSimple payback
No solar fee; extra power at Xcel’s 15¢ (Rate A50, October to May)$1,747$1,50616.6 years
Same, plus a co-op grid access fee: Connexus Energy’s, $163 a year$1,747$1,34318.7 years

Swipe the table sideways to see every column.

The fee is the whole difference between the two cases: $163 a year adds about two years to the payback.

How we calculated this
  • Output: 8.06 kW at about 1,400 kWh per kW = 11,282 kWh a year (EcoGen Solar Cost Index).
  • Savings: 4,513 kWh used at home × 16.22¢, plus 6,769 kWh sent out × 15¢ = $1,747.
  • Upkeep: $30 per kW a year, $241.80, including an inverter reserve. The second case adds Connexus’s grid access charge: (8.06 − 3.5 kW) × $2.98 × 12 months = $163.
  • Payback: $25,067 ÷ (savings − upkeep − fees). No financing, rate changes or panel aging.
  • This is the cautious case. It values every kWh sent out at the month-end rate, while power netted within the month saves your full price. 16.22¢ is the EIA state average for 12 months to July 2026 and includes fixed charges, so it can run high.
  • The second case keeps the 15¢ credit to show the fee alone. Connexus itself pays 12.4¢ for monthly extra power, so a Connexus home would take somewhat longer.
  • Xcel’s Solar*Rewards payment is not counted. At 3¢ per kWh it would add about $338 a year for 10 years.

Run your own Minnesota numbers

Xcel Energy, Minnesota Power or Otter Tail: the rate for your extra power

The name at the top of your electric bill sets the rate for month-end extra power and the programs you can join. Each utility resets its rate every year.

Xcel Energy

15¢ per extra kWh, October to May

Rate A50, effective April 1, 2026: 17.656¢ from June to September. Only Xcel homes can get Solar*Rewards and Xcel’s battery incentive.

Next: ask which Solar*Rewards rate your application gets, in writing.

Minnesota Power

13.75¢ per extra kWh

Effective July 1, 2026. Its SolarSense rebate is only for households under 150% of area median income: up to $5,000.

Next: confirm this year’s rate and any SolarSense money in writing.

Otter Tail Power

9.264¢ per extra kWh

Since April 1, 2026, plus $0.85 a month for solar homes on this rate. It also buys your renewable energy credits at 2¢ per kWh made.

Next: ask whether selling your credits or keeping them suits you.

What Minnesota utilities pay for month-end extra power from a home system
UtilityTypePay per extra kWhRate in effect since
Xcel EnergyInvestor-owned15¢ / 17.656¢April 1, 2026
Minnesota PowerInvestor-owned13.75¢July 1, 2026
Otter Tail PowerInvestor-owned9.264¢April 1, 2026
Dakota ElectricCo-op14.94¢January 1, 2026
Connexus EnergyCo-op12.4¢February 1, 2026

Swipe the table sideways to see every column.

Why the month-end rate matters less than it looks

Only power left over after a month of netting earns these rates. Power your home uses, and power you send out and take back in the same month, saves your full price.

Xcel’s two rates are its Rate A50 credits for systems under 40 kW (Minnesota Electric Rate Book, Section 9). Minnesota Power’s 13.75¢ and Xcel’s figures come from our October 6, 2026 tariff review.

Minnesota co-ops and city utilities: net metering, plus a fee

Minnesota’s net metering law covers co-ops and city utilities too. It also lets them charge solar homes a reasonable fee for fixed costs, based on their latest cost of service study.

$163Connexus grid access charge

$2.98 per kW of system size above 3.5 kW, each month: $13.59 a month on the typical 8.06 kW system.

Year-endkWh credits wiped out

You may take kWh credits instead of money. Unused ones cancel at the end of the calendar year, with no payment.

$500Dakota Electric rebate

One time, for a system you own of no more than 20.01 kW. Get approval before you buy.

Not lawSenate File 4504

The 2026 bill to narrow co-op net metering passed the Senate on May 12, 2026 and went no further.

Ask your co-op or city utility for three things in writing before you pick a system size: its monthly fee for solar homes, the cost study behind it, and this year’s rate for extra power. Connexus and Dakota Electric are the two co-ops whose numbers we could confirm.

Minnesota solar incentives: two tax exemptions, Solar*Rewards and battery money

No state income tax credit and no federal credit for a system you own. What Minnesota offers depends on taxes everyone gets and programs your utility runs.

0%Sales tax on the system

No 6.875% state sales tax on a solar energy system. The buyer gives the seller Form ST3, exemption 34.

$0Property tax on the system

The system itself is not taxed, and there is nothing to file. Ask your assessor how it values your home.

3¢/kWhXcel Solar*Rewards

Paid on every kWh the panels make, for 10 years: about $338 a year on the typical system. Xcel homes only.

$175 to $250Battery money, per kWh

Xcel pays $175 per kWh, up to $5,000. Outside Xcel, the state pays $250 per kWh, up to $7,000.

Ways to pay for solar in Minnesota
Way to payWho owns the panelsMinnesota point to check
CashYouNo sales tax on the system; Form ST3
LoanYouFinanced total next to the cash price; any dealer fee
LeaseThe companyWho applies for Solar*Rewards and who is paid it; transfer or buyout if you sell
PPAThe companyPrice per kWh; transfer or buyout if you sell

Swipe the table sideways to see every column.

Smaller programs and the fine print
  • Solar*Rewards rate: 3¢ per kWh when we read Xcel’s page on October 1, 2026. Xcel expected a new rate in early October 2026, so ask which rate your application gets. Rules: no more than 40 kW, expected output under 120% of your past 12 months of use, your renewable energy credits go to Xcel, and Xcel asks for at least $300,000 of personal liability insurance.
  • Solar*Rewards for lower-income homes: $3.00 per watt up front on top of the 3¢. 96% of the 2026 money was assigned by September 21, 2026, and there is a waitlist.
  • Battery programs: both pay once, after the battery runs, for a battery of 50 kWh or less, at a home with solar or a filed solar application. Xcel pays $370 per kWh to homes that meet its income rules. The state money runs until June 30, 2027 or until it is gone.
  • Minnesota Power SolarSense: $0.27 per kWh of expected yearly output, capped at $5,000 or 60% of the cost, whichever is less. The 2026 money went by lottery to applications sent March 1 to March 5.
  • Otter Tail Power: 2¢ per kWh made for your renewable energy credits, with a free production meter: about $226 a year on the typical system.
  • Minneapolis group buy: the city pays 20¢ per kWh of a system’s expected yearly output to homes that go solar through the partner it funds.

Minnesota incentives guideWhat $0-down solar means in Minnesota

What 4 kW to 10 kW of solar costs in Minnesota

$3.11 per watt, $0.22 above the US average and 44th lowest of 51. These are modeled cash prices, not quotes we collected.

Cash price and power made by system size
System sizeCash priceMade a year
4 kW$12,4405,600 kWh
6 kW$18,6608,400 kWh
8.06 kW (typical)$25,06711,282 kWh
10 kW$31,10014,000 kWh
How we got these numbers
  • 8.06 kW is the median size Minnesota homeowners installed in 2025 (Berkeley Lab, 2,106 systems). Size yours to your own use.
  • Output uses the Cost Index figure of about 1,400 kWh per kW a year. Shade lowers it.
  • Net metering covers home systems under 40 kW at every Minnesota utility.
  • A system you own gets no federal tax credit after December 31, 2025.

Full Minnesota price guide

Before you size a Minnesota system: four checks

  • Size to your useSolar*Rewards needs expected output under 120% of your past year’s use. Co-op kWh credits cancel at year-end.
  • Your homeowners associationIt cannot ban rooftop solar on a single-family home. No written answer in 60 days means approved.
  • Shade and roofTrees cut output. Replace an old roof first, or get the remove-and-reinstall cost in writing.
  • Time in the homeOur cases pay back in 16.6 to 18.7 years. Compare that with how long you plan to stay.

Is solar worth it for your Minnesota home?

Minnesota installers with active state licenses

Two Minnesota-based companies, A to Z, not ranked. Both hold active Minnesota electrical and building contractor licenses (Department of Labor and Industry, checked October 13, 2026).

All Energy Solar

Office
St. Paul, MN (headquarters)
Licenses
Electrical EA667674, building contractor BC665819; not shown on its own site
Warranty
Workmanship guarantee mentioned; no terms published
More facts
Founded
2009 (company says)
Ways to pay
Cash, loan, EnergyLock prepaid lease; no traditional lease or PPA in Minnesota
All Energy Solar profile

Wolf River Electric

Office
Isanti, MN (headquarters)
Licenses
Electrical EA777669, building contractor BC773271, under LTL LED LLC
Warranty
25 years on labor, parts and roof penetrations, written for Maxeon systems; ask which terms apply
More facts
Area
All 87 Minnesota counties (company says)
Ways to pay
Cash or loan, terms up to 25 years
Wolf River Electric profile

Listed A to Z. Facts come from each company’s own site and the state license data. How we make money.

Compare Minnesota solar companies in detail

Six lines a Minnesota solar quote should spell out

  • Your utility by nameXcel, Minnesota Power, Otter Tail or your co-op, and its rate for month-end extra power.
  • Any monthly solar feeAt a co-op or city utility, the fee in dollars and the cost study behind it.
  • Money or kWh creditsAt a co-op or city utility, which one you chose. kWh credits cancel at year-end.
  • The Solar*Rewards rateFor Xcel homes, the rate your application gets, in writing, and the payback without it.
  • No tax shortcutsNo sales tax on the system, and no 30% federal credit subtracted from a system you own.
  • License numbersElectrical and building contractor numbers you can check in the state license lookup.

Comparing Minnesota quotes?

Ask each installer to name your utility, its rate for extra power and any monthly solar fee.

Price solar for your Minnesota home

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. Privacy policy

Minnesota Solar FAQs

Does Minnesota have net metering?

Yes, at every utility. Under Minn. Stat. 216B.164, a home system under 40 kW is billed only for the power it takes from the grid minus the power it sends out. Co-ops and city utilities may add a fee for solar homes.

Is Minnesota ending net metering for co-op customers?

No. Senate File 4504 passed the Senate on May 12, 2026, went no further and is not law. Co-op and city utility customers are still covered by the state net metering law. A seller who uses that bill to rush you is working from old news.

How much does Xcel Solar*Rewards pay?

3¢ for each kWh your panels make, for 10 years, when we read Xcel’s page on October 1, 2026. On the typical 8.06 kW system that is about $338 a year. Xcel expected a new rate in early October 2026, so get the rate your application gets in writing.

Does Minnesota have a solar tax credit?

No. Minnesota’s 2025 income tax credit schedules list no credit for home solar, and the federal credit ended for systems you own placed in service after December 31, 2025. Minnesota does exempt a solar energy system from sales tax and property tax.

What happens to extra solar credits at the end of the year?

Month-end extra power is paid at your utility’s rate. At a co-op or city utility you may choose kWh credits instead; they carry forward month to month and cancel at the end of the calendar year with no payment.

Every source behind the Minnesota figures above

Sources (27 documents, each with the date we read it)
  1. EcoGen Solar Cost Index, September 2026: Minnesota$3.11 per watt, 8.06 kW median size (Berkeley Lab 2025, 2,106 systems), about 1,400 kWh per kW, 16.22¢ statewide average (EIA).
  2. Minnesota Statutes 216B.164: net meteringEvery utility, systems under 40 kW, month-end rate, co-op fee and kWh credits. Read September 30 and October 5, 2026.
  3. Xcel Energy: Minnesota Electric Rate Book, Section 9 (Part 1), Sheet 9-2, Rate A5015¢ October to May, 17.656¢ June to September, effective April 1, 2026. From EcoGen’s October 6, 2026 tariff review.
  4. Minnesota Power: Electric Rate Book, Rider for Parallel Generation13.75¢, effective July 1, 2026. From EcoGen’s October 6, 2026 tariff review.
  5. Otter Tail Power: Minnesota rate schedule Section 12.019.264¢ since April 1, 2026, $0.85 monthly charge, 2¢ per kWh for credits. Read September 29, 2026.
  6. Dakota Electric: 2026 parallel generation rate14.94¢ since January 1, 2026. Read September 30, 2026.
  7. Dakota Electric: Energy Wise rebates$500 solar rebate, 20.01 kW limit. Read September 29 and 30, 2026.
  8. Connexus Energy: Electric Rate Book, Section III12.4¢ since February 1, 2026; grid access charge of $2.98 per kW above 3.5 kW. Read September 29, 2026.
  9. Xcel Energy: Solar*Rewards (Minnesota)3¢ per kWh, expected rate change, insurance, income-qualified budget. Read September 30 and October 1, 2026.
  10. Minnesota Statutes 116C.7792: solar energy production incentive10 years, 40 kW, 120% sizing rule. Read September 30, 2026.
  11. Xcel Energy: Battery Storage Incentive Program$175 per kWh, $370 for income-qualified homes, up to $5,000. Read September 30, 2026.
  12. Minnesota Department of Commerce: energy storage incentives$250 per kWh, up to $7,000, until June 30, 2027. Read October 1, 2026.
  13. Minnesota Statutes 216C.379: energy storage incentive program50 kWh battery limit. Read September 30, 2026.
  14. Minnesota Statutes 297A.67, subd. 29: sales tax exemptionSolar energy systems exempt. Read September 30, 2026.
  15. Minnesota Statutes 297A.62: sales tax rate6.5% plus 0.375% = 6.875%. Read September 30, 2026.
  16. Minnesota Department of Revenue: Form ST3Exemption 34, solar energy system. Read September 30, 2026.
  17. Minnesota Statutes 272.02, subd. 24: property tax exemptionRead September 30, 2026.
  18. Minnesota Department of Revenue: 2025 Schedule M1CNo solar income tax credit listed (M1REF also checked). Read October 1, 2026.
  19. Minnesota Power: SolarSenseIncome limit, $0.27 per kWh, $5,000 or 60% cap, March 2026 lottery. Read September 30 and October 1, 2026.
  20. City of Minneapolis: solar group buy20¢ per kWh of expected yearly output. Read September 30, 2026.
  21. Minnesota Statutes 500.216: homeowners associations and solarNo ban on rooftop solar; 60-day answer. Read September 29 and 30, 2026.
  22. Minnesota Legislature: Senate File 4504 statusPassed the Senate May 12, 2026; no further action. Read September 30, 2026.
  23. U.S. EIA: average residential price by state16.22¢, 12 months August 2025 to July 2026, as used in the Cost Index.
  24. IRS: Residential Clean Energy CreditNo credit for property placed in service after December 31, 2025. Read September 30, 2026.
  25. 2025 Annual Technology Baseline: residential PVOwner costs of $29.83 per kW a year, rounded to $30 for upkeep.
  26. Berkeley Lab: solar self-consumption research (2022)Informs the 40% home-use planning default. It is not a measured Minnesota average.
  27. Minnesota Department of Labor and Industry: license lookupInstaller electrical and building contractor licenses, active. Checked October 13, 2026.
Dean Mahmoud
Written by

Dean Mahmoud

CEO of EcoGen America. Since 2021 he has connected homeowners with residential solar installers in all 50 states.

About Dean
Trevor Guilday
Checked by

Trevor Guilday

Founder of EcoGen America. He has worked in residential solar since 2016 and maintains the EcoGen Solar Cost Index.

About Trevor

Editorial standardsCost Index methodologyVerified Installer methodology