Nearly every state has a rule you can look up: a rate, a tariff, a statute that says what an exported kilowatt-hour is worth. South Dakota has none, and only Tennessee is in the same position. The Public Utilities Commission does not require any utility to offer net metering, and the legislature has repeatedly declined to make it do so. What that means in practice is not that solar does not work here. It means the answer is decided entirely by whose name is on your bill.
South Dakota Requires Nothing of Its Utilities
The Commission’s own position is unusually blunt: South Dakota does not compensate solar generation at a net metered rate. There is no statewide program, no successor tariff, no closing date and nothing pending, because there was never a mandate to close or replace. Tennessee is the only other state without one.
This changes what a homeowner should be doing with their time. In Utah or Nevada the work is understanding a rule that applies to you whether you like it or not. In South Dakota the work is finding out what your particular utility has chosen to offer, because it chose freely and it could have chosen nothing.
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Every Terms Question Goes to Your Utility
No South Dakota utility is required to offer net metering, and none guarantees it by statute. Some may offer a voluntary arrangement; the terms, if any, live in your utility’s own filings and can change at its discretion. Treat any netting claim in a sales pitch as unverified until your utility confirms it in writing.
Provider | Net metering position | What to do |
|---|---|---|
Xcel Energy | No statutory obligation; any arrangement is voluntary and its own | Confirm current terms and get them in writing |
Black Hills Energy, MidAmerican, NorthWestern, Otter Tail | Not required to offer it, terms vary | Ask directly before designing a system |
Rural electric cooperatives | Set their own terms entirely | Ask directly, and expect wide variation |
Because it is voluntary, it is also revocable in a way a statutory right is not. That is not a reason to avoid solar here. It is a reason to get the terms, and any duration attached to them, in writing before you sign an installation contract rather than after.
What Federal Law Guarantees When the State Does Not
If your utility offers nothing, you are not left with no route at all. Under the federal Public Utility Regulatory Policies Act, utilities regulated by the Commission must interconnect with and purchase power from small generating facilities, at a minimum rate known as avoided cost: the incremental cost the utility would otherwise incur generating or buying that energy itself.
For facilities under 100 kW, those rates have to be filed with the Commission and approved by it for regulated investor-owned utilities. So there is a public, checkable number for your utility, even where there is no net metering. It is a wholesale rate and it will be well below the statewide average residential rate of about 13.68¢; your own utility’s retail rate will differ, but it exists and it is enforceable.
There is no statewide figure; each utility’s rate is filed separately. Ask for your utility’s filed avoided cost rate for facilities under 100 kW, and be aware that cooperatives, which are not Commission-regulated in the same way, sit outside this route as well.
The One Thing the State Itself Gives You
South Dakota’s single state-level solar incentive is a property tax exemption at section 10-4-44 of the codified laws. Adding a solar system does not raise the assessed value of your property, so the improvement does not increase your tax bill.
There is no state income tax credit, and there cannot be one in the usual form, because South Dakota has no personal income tax. There is no state rebate and no certificate market. Combined with the federal residential credit at $0 for purchased systems whose installation is completed after December 31, 2025, the exemption is the entire public contribution to a South Dakota rooftop system.
The other half of the ledger: South Dakota’s electricity is comparatively cheap, which lowers what solar saves, and its winters are hard, which lowers what solar produces. Start from those facts rather than from an incentive list.
You Likely Will Not Qualify If
- You assumed South Dakota has net metering. The state does not require it, and no utility guarantees it. Any voluntary arrangement is your utility’s to define and to change.
- You are on a rural electric cooperative. Co-ops set their own terms and sit outside the Commission’s regulated route as well, so both the voluntary and the federal paths need checking directly.
- You are expecting a South Dakota state solar tax credit. There is no personal income tax here, so there is no return for a credit to reduce.
- You are counting on the 30% federal credit. Section 25D is $0 for purchased systems whose installation is completed after December 31, 2025 under Public Law 119-21.
- You were quoted savings based on a statewide South Dakota export rate. There is not one. Any figure has to come from your own utility’s terms or its filed avoided cost rate.
Asking the Only Question That Decides It
In most states, the advice is to understand the rule and then design around it. In South Dakota the sequence collapses to one call, made before you talk to an installer rather than after: ask your utility whether it offers net metering, at what rate, up to what system size, and whether those terms are guaranteed for any period.
A yes, in writing, changes the math materially. A no sends you to the filed avoided cost rate and a much narrower case that depends almost entirely on self-consumption. Both are workable answers; what does not work is designing a system before you know which one applies. Our South Dakota cost guide covers pricing and the South Dakota installer list covers who does the work.
South Dakota Solar FAQs
Not as a state requirement. The Public Utilities Commission does not mandate net metering and the legislature has repeatedly declined to, so South Dakota does not compensate solar generation at a net metered rate as a matter of state policy. Individual utilities may offer voluntary arrangements, so ask yours directly and get any terms in writing.
You still have a route. Under the federal Public Utility Regulatory Policies Act, Commission-regulated utilities must interconnect with and purchase power from small generating facilities at a minimum of avoided cost. For facilities under 100 kW those rates are filed with and approved by the Commission, so there is a checkable number for your utility even where there is no net metering. It is a wholesale rate, well below the statewide average residential rate of about 13.68¢.
No, and it cannot have one in the usual form because South Dakota has no personal income tax. The state’s only solar incentive is a property tax exemption under section 10-4-44 of the codified laws, which means adding a system does not raise your assessed value or your tax bill. There is no state rebate and no certificate market.
None is required to offer it, and none guarantees terms by statute. Black Hills Energy, MidAmerican Energy, NorthWestern Energy and Otter Tail Power are not required to offer it and their terms vary, and rural electric cooperatives set their own terms entirely. Ask your own provider directly before designing a system.
One question, and ask your utility rather than an installer: does it offer net metering, at what rate, up to what system size, and are those terms guaranteed for any period. A yes, in writing, changes the math materially. A no sends you to the filed avoided cost rate and a narrower case built on self-consumption.
One call to your utility settles this. Enter your ZIP code to see what South Dakota installers are quoting.
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References & Research Sources
EcoGen America reviewed the South Dakota Public Utilities Commission’s solar and compensation guidance, the property tax exemption statute, federal energy data, and IRS guidance for this page. Per-utility terms and filed avoided-cost rates differ by provider; ask yours in writing. Sources accessed between June 10 and August 21, 2026.
- South Dakota Public Utilities Commission. Solar energy guidance. The absence of any state net metering requirement and the Commission’s statement that South Dakota does not compensate solar generation at a net metered rate. Accessed August 21, 2026.
- South Dakota Public Utilities Commission. Small generator compensation guidance. The PURPA obligation on regulated utilities to interconnect with and purchase from small generating facilities at avoided cost, with rates for facilities under 100 kW filed with and approved by the Commission. Accessed August 21, 2026.
- South Dakota Legislature. Section 10-4-44 of the South Dakota Codified Laws. The renewable energy property tax exemption. Accessed August 21, 2026.
- U.S. Energy Information Administration (EIA). Electric Power Monthly. The South Dakota statewide average residential price used for scale. Accessed August 21, 2026.
- Internal Revenue Service (IRS). One, Big, Beautiful Bill Provisions. Guidance on the Public Law 119-21 termination of the Section 25D residential credit for systems whose installation is completed after December 31, 2025. Accessed August 21, 2026.
