Minnesota has one solar rule for every utility: net metering, by state law, for any home system under 40 kW. A typical owned system has a simple payback before incentives of about 14.5 years across Minnesota and 13.9 years at Xcel Energy, the largest utility. The one exception is a co-op or city utility fee for solar homes: at Connexus, which also has a lower price per kWh, the same system takes about 19.1 years. Ask your utility for that fee in writing.
Simple payback before incentives, MinnesotaAbout 14.5 years
By utility, Xcel to Otter TailAbout 13.9 to 21.2 years
Typical owned 8.06 kW system at $25,067 cash (EcoGen Solar Cost Index, September 2026), no incentive. At Xcel every kWh is worth 16.26¢, its EIA price less the fixed customer charge, and its $1.90 monthly solar charge comes off. These figures count no upkeep and no price rises. See the math.
- Who bills you: Xcel, Minnesota Power or Otter Tail cannot add the co-op fee. A co-op or city utility may.
- The fee: at Connexus, $13.59 a month on a typical system. Other co-ops set their own.
- Time in home: simple payback runs from about 14 to 21 years by utility, so plan to stay well past yours.
2026 rules: new home systems get no 30% federal homeowner credit (IRS). Minnesota’s net metering law still covers every utility; the 2026 bill some guides warned about did not become law.
How we checked this guide
Rules come from the Minnesota Statutes and utility rate sheets; the price from the U.S. EIA; the example system from the EcoGen Solar Cost Index. Assumed numbers are labelled.
The writer and checker shown above are EcoGen staff. EcoGen is paid when homeowners request quotes, which is explained beside the quote form. Read our editorial standards.
The rule: one net metering law for every Minnesota utility
Most states write net metering for the big investor-owned utilities and leave co-ops and city utilities to their own terms. Under Minn. Stat. 216B.164, Minnesota covers them all for home systems under 40 kW. You are billed only for the power you take minus the power you send. A month’s surplus is paid at the utility’s average retail energy rate: about what one kWh costs you, without fixed charges.
| Utility | Pay for a month’s extra power | Extra charge for solar homes |
|---|---|---|
| Xcel Energy | 14.998 cents per kWh October to May, 17.656 cents June to September (rate A50, effective April 1, 2026) | The co-op fee clause does not apply; our payback figures count a $1.90 monthly solar charge |
| Minnesota Power | 13.75 cents per kWh, since July 1, 2026 | The co-op fee clause does not apply |
| Otter Tail Power | 9.264 cents per kWh, since April 1, 2026 | $0.85 a month on the solar rider |
| Dakota Electric (co-op) | 14.94 cents per kWh, since January 1, 2026 | None found |
| Connexus Energy (co-op) | 12.4 cents per kWh, since February 1, 2026 | $2.98 per kW of system size above 3.5 kW, each month |
That last row is the exception: the same law lets co-ops and city utilities add a fee.
Four checks before a Minnesota yes
Because the law is the same everywhere, the Minnesota answer swings less than in most states. Read each row across.
Your utility
Worth a closer look
Xcel, Minnesota Power or Otter Tail sends your bill, so no co-op fee can apply.
Pause and check
A co-op or city utility bills you and nobody has asked about a solar fee.
Check next: the fee in dollars a month, or a written “none”.
How you are paid
Worth a closer look
Monthly surplus is paid in money at the utility’s energy rate.
Pause and check
At a co-op, kWh credits were picked and the system makes more than you use in a year.
Check next: which option the contract names: money or kWh credits.
Roof and snow
Worth a closer look
An open, south-facing roof steep enough to shed snow within days.
Pause and check
Heavy tree shade, or a shallow roof that holds snow for weeks.
Check next: a shade report and month-by-month output, December to February included.
Price
Worth a closer look
A cash price near the Index’s $25,067 for 8.06 kW ($3.11 per watt).
Pause and check
A bid well above that per watt, or a loan with a dealer fee built in.
Check next: the cash price next to the financed price, plus APR, fees and term.
Ready to get real quotes for your Minnesota home?
Quotes are free. Hold each one against the payback math below.
Solar providers that serve your area may contact you, and they pay EcoGen for the introduction. How we make money.
Same Minnesota roof, with and without the exception
Simple payback is the years your savings take to cover what you paid: net cost divided by yearly savings. A kWh (kilowatt-hour) is the unit on your power bill. An export credit is what you get for each kWh your panels send to the grid. Here is the typical Minnesota system at Xcel Energy, the largest utility.
- Cash price
- $25,067
- Confirmed incentives
- $0
- Year-one production
- 11,260 kWh
- Price you avoid (Xcel, less fixed charges)
- $0.1626/kWh
- Power sent out
- Nets kWh for kWh
- Xcel solar charge
- $22.80/yr
- Upkeep and price rises
- Not counted
- Value of the power made
11,260 × $0.1626$1,831/yr - Yearly savings
$1,831 − $22.80$1,808/yr - Simple payback before incentives
$25,067 ÷ $1,808about 13.9 years
Inputs: the EcoGen Solar Cost Index typical Minnesota system (8.06 kW, $25,067 cash, September 2026) and our per-utility payback figures of October 30, 2026: 8.06 kW × about 1,397 kWh per kW = 11,260 kWh a year. Xcel’s EIA price for the 12 months to August 2026, 17.22¢, less its $6.00 monthly customer charge, works out to 16.26¢. Power you send out cancels power you buy, kWh for kWh, so every kWh counts at that price; month-end extra is paid at a close rate, 14.998¢ or 17.656¢. The $22.80 is Xcel’s $1.90 monthly charge for solar homes. No incentive is subtracted; not every home can get one. These figures count no upkeep and no price rises. Minnesota’s figure, weighted by homes across Xcel, Otter Tail, Connexus and Dakota Electric, is 14.5 years.
Now move the house into Connexus territory. Its price is lower: 15.10¢, less its $16.50 monthly basic charge, works out to 13.08¢, so the power is worth $1,473 a year. Its grid access charge on an 8.06 kW system is $13.59 a month, or about $163 a year. Panels and price stay the same.
| Scenario | Yearly charge for solar homes | Savings before charges | Yearly savings | Simple payback before incentives |
|---|---|---|---|---|
| Xcel Energy | $22.80 | $1,831 | $1,808 | about 13.9 years |
| Connexus Energy (co-op) | $163 | $1,473 | $1,310 | about 19.1 years |
A lower price and one fee add about five years. Other co-ops set their own, so the second case is one real example, not a statewide figure.
Test your own Minnesota quote
The tool starts with the Xcel case, with Xcel’s $1.90 monthly solar charge, rounded to $23 a year, in owner costs. Enter your quote and press Calculate. Put any monthly fee times 12 into owner costs. Nothing you enter is sent anywhere.
Example result
about 13.9 years
simple cash payback
- Used-at-home value
- $732/yr
- Export value
- $1,099/yr
- Owner costs
- −$23/yr
- Yearly savings
- $1,808/yr
- Net cost
- $25,067
Starts with the Xcel case above, with power sent out valued like power used at home. Flat first-year values with no upkeep; rates, panel wear and repairs will change the result.
How monthly netting values the power you send out
Power you use at home saves the full price. Power you send out first cancels power you buy later that month; only the leftover is paid, at the energy rate, without fixed charges: 14.998¢ from October to May and 17.656¢ from June to September at Xcel. So our example counts every kWh at Xcel’s price less fixed charges, 16.26¢, and the split below barely changes the answer.
Used at home: 4,504 kWh. Each one replaces power you would have bought, so it saves the full variable rate ($0.1626 here).
Sent to the grid: 6,756 kWh. Each one cancels a kWh you buy later in the month, so it is worth about the same ($0.1626 here).
Minnesota homes paid an average of 16.28¢ per kWh from September 2025 to August 2026 (EIA). The example uses Xcel’s own price, 17.22¢ less its $6.00 monthly customer charge, and about 1,397 kWh per kW a year, or about 11,260 kWh for the typical system, as in our per-utility payback figures.
Check which Minnesota utility serves your address
The fee question only applies at co-ops and city utilities. Ask each installer which utility it modeled and what fee it assumed.
Solar providers that serve your area may contact you, and they pay EcoGen for the introduction. How we make money.
The exception, up close: co-op and city utility fine print
If a co-op or city utility bills you, read three lines of the law first.
- The fee. The utility may charge an extra fee for fixed costs your bill does not cover. It must be reasonable and based on its latest cost of service study, which you can ask to see.
- kWh credits instead of money. Banked kWh left at the end of the calendar year are wiped out unpaid. Fine for a system sized to your use; a loss for one that is too big.
- The avoided-cost option. You may also choose a lower price for exports. A typical home has no reason to.
A co-op is not a bad place for solar. Dakota Electric has no extra charge we could find, a simple payback of about 15.6 years in our figures, and a $500 one-time rebate for an owned system up to 20.01 kW. The co-op’s own sheet decides how close you land to the no-fee case.
Money on top that only some Minnesota homes get
Our example counts no incentive, because none reaches every home. These shorten the payback if one fits.
- Xcel Solar*Rewards. A payment on every kWh for 10 years: about $564 a year for the typical system at $0.05 per kWh, the rate from October 2, 2026 for applications that are not income-qualified. Get yours in writing. Your renewable energy credits go to Xcel.
- Minnesota Power SolarSense. Up to $5,000 one time, only for households under 150% of area median income. Ask whether 2026 money is left.
- Two tax exemptions for everyone. No 6.875% state sales tax on a solar energy system (Minn. Stat. 297A.67, subd. 29) and no property tax on the system itself (Minn. Stat. 272.02, subd. 24).
Battery programs and more: our Minnesota incentives guide.
What a Minnesota quote has to answer
A quote that cannot name your utility and its fee cannot give you a real payback.
- Your utility, by name. And whether it is investor-owned, a co-op or a city utility.
- Any monthly solar fee. At a co-op or city utility, the fee in dollars and the cost study behind it.
- Money or kWh credits. kWh credits at a co-op are wiped out at the end of the calendar year.
- Year-one output and size. kWh next to a year of your bills, with snow and shade losses shown.
- No sales tax on the system. A solar energy system is exempt under Minn. Stat. 297A.67, subd. 29.
- No federal tax credit subtracted. It ended for systems installed after December 31, 2025.
Compare Minnesota solar quotes
Ask each installer to name your utility and write down any monthly fee for solar homes. Enter your ZIP code to request quotes from solar providers that serve your area.
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.
More Minnesota solar guides
- Minnesota solar guide: utilities, incentives and installers in one place
- Minnesota solar companies: compare local installers before you request quotes
- Minnesota solar incentives: what each utility pays
- What solar costs in Minnesota
- Free solar panels in Minnesota: what $0 down means here
- Are solar panels worth it? The national guide and payback calculator
All 51 state guides
Minnesota solar questions
Are solar panels worth it in Minnesota?
They can be for a home that stays put. A typical owned 8.06 kW system has a simple payback before incentives of about 13.9 years at Xcel and 14.5 years across Minnesota, and about 19.1 years at Connexus, a co-op with a lower price and a monthly charge for solar homes. Net metering by law at every utility keeps the answer steady. Your price, roof and fee decide the rest.
Is Minnesota ending net metering?
No. Some guides said a 2026 bill would end it for co-op and city utility customers. Senate File 4504 passed the Senate on May 12, 2026, went no further and is not law. Every utility is still bound by Minn. Stat. 216B.164. A seller who uses that bill to rush you is working from old news.
Do Minnesota co-ops charge solar customers a fee?
The law lets them. A co-op or city utility may add a reasonable fee to recover fixed costs, based on its latest cost of service study, which you can ask to see. Connexus charges $2.98 per kW of system size above 3.5 kW each month: $13.59 a month on a typical system. Ask yours for its number.
Does Minnesota net metering cover co-ops and city utilities?
Yes, and that is rare. Minn. Stat. 216B.164 covers investor-owned utilities, co-ops and city utilities alike for home systems under 40 kW. You pay only for the power you take minus the power you send. Extra power left at the end of a month is paid at the utility’s average retail energy rate. Co-op and city utility customers can also choose kWh credits, which end at the end of the calendar year.
How much does Xcel Solar*Rewards add?
At $0.05 per kWh, the rate from October 2, 2026 for applications that are not income-qualified, a typical system would earn about $564 a year for 10 years. Income-qualified homes get $0.03 plus an upfront payment. Our example leaves it out, so it would shorten the payback for Xcel homes that get it.
Sources, method and corrections
The example uses the EcoGen Solar Cost Index typical Minnesota system (September 2026) and our per-utility payback figures of October 30, 2026: each utility’s EIA 12-month price (12 months to August 2026) less its fixed monthly charge, its own charge for solar homes, and full netting of power sent out. Xcel’s rate A50 credits, 14.998¢ and 17.656¢, were re-read against its rate sheet (35th Revised Sheet 9-2, effective April 1, 2026). The second case is Connexus, with its grid access charge, as one real co-op fee. The figures count no upkeep and no price rises. Simple payback uses flat first-year values. The calculator’s 40% home-use share is a planning assumption based on home-use research, not a measured Minnesota average; at full netting it barely changes the answer. The calculator sends nothing.
Corrected: an earlier version said Senate File 4504 would end net metering for new co-op customers. It did not become law.
Spotted an error? Tell us through our corrections and feedback process.
- Minnesota Statutes 216B.164: net metering at every utility (subd. 3: the co-op fee and kWh credits; read again October 5, 2026)
- Connexus Energy: Electric Rate Book, Section III (grid access charge and net energy billing; checked September 29, 2026)
- Dakota Electric: 2026 parallel generation rate (effective January 1, 2026)
- Otter Tail Power: Minnesota rate schedule Section 12.01 (checked September 29, 2026)
- Xcel Energy: Solar*Rewards (Minnesota) (rate read October 19, 2026)
- Minnesota Legislature: Senate File 4504 status (no action after May 12, 2026)
- Minnesota Statutes 297A.67, subd. 29: sales tax exemption
- Minnesota Statutes 272.02, subd. 24: property tax exemption
- U.S. EIA: Form EIA-861M, sales by utility (each utility’s 12-month residential price to August 2026, used in our per-utility payback figures)
- Xcel Energy: Minnesota Electric Rate Book, Section 9, Sheet 9-2, Rate A50 (effective April 1, 2026)
- U.S. EIA: average residential electricity price by state (12-month average, September 2025 to August 2026)
- IRS: Residential Clean Energy Credit (not available for property installed after December 31, 2025)
- EcoGen Solar Cost Index, September 2026: what solar costs in Minnesota (typical system, output per kW)
