South Dakota Solar: Lawmakers Said No to Net Metering Three Times

Written by Dean Mahmoud, CEO, and checked by Trevor Guilday, founder.Prices from the September 2026 Cost Index. Utility rate sheets read September 30 to October 19, 2026. Updated October 19, 2026.

A typical South Dakota system is 7.62 kW and costs about $21,717 in cash at $2.85 per watt. Simple payback before incentives is 19.6 years statewide and 19.3 years at Xcel Energy, the largest utility, because utilities buy the power you send out for 2.48¢ to 4.871¢, while power costs about 14.28¢ to buy.

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Sold at 2.48¢ to 4.871¢: why South Dakota paybacks run 18.7 to 38.7 years

South Dakota has no net metering. The Public Utilities Commission (PUC) says lawmakers looked at it in 2013, 2015 and 2016 and did not adopt it. So each kWh your panels make is worth one of two very different amounts. Our figures send 31.49% of the output to the grid, the share sent to the grid as reported to EIA, not measured at the meter. The other 68.51% is used at home as it is made.

Power you use as it is made about 14.28¢

  1. Your home uses it the moment the panels make it.
  2. You do not buy that kWh from your utility.
  3. It saves what you pay per kWh: about 14.28¢ on average, a little less once fixed charges are taken out.

Power you send to the grid 2.48¢ to 4.871¢

  1. Your utility buys it at the price it files with the PUC.
  2. Otter Tail Power pays 4.871¢. Black Hills Energy pays 2.48¢.
  3. Summer surplus is sold and paid for month by month, not banked for winter bills, so nothing is left at year end.
Typical 7.62 kW system, $21,717 cash. South Dakota as a whole: 19.6 years
Utility and export priceYearly savingsAfter the utility’s solar chargeSimple payback before incentives
Xcel Energy, the largest utility, 3.16¢ (Rate Code E50, since January 1, 2026)$1,168$1,12319.3 years
Black Hills Energy, 2.48¢ (Schedule 3, since August 1, 2019)$1,159$1,15918.7 years
NorthWestern Energy, 2.547¢ (Rate No. 73)$1,122$1,09819.8 years
Montana-Dakota Utilities, 3.416¢ (Rate 95)$1,110$1,08420.0 years
Otter Tail Power, 4.871¢ (Section 12.01, bills from April 1, 2026)$993$97722.2 years
MidAmerican Energy, 2.26¢ to 4.61¢ by season and hour (Rate QF, since August 15, 2026)$802$56238.7 to 41.7 years

Swipe the table sideways to see every column.

Five of the six utilities pay back in 18.7 to 22.2 years, inside the 25 years panels usually last. MidAmerican’s $20 monthly charge pushes its case past 38 years. A South Dakota system pays back sooner when more of its power is used at home as it is made, or when the price is lower.

How we calculated this
  • Output: 7.62 kW × 1,478 kWh per kW = 11,262 kWh a year.
  • Export share: 31.49% of the output goes to the grid, the share sent to the grid as reported to EIA, not measured at the meter. The other 68.51% is used at home.
  • Power used at home saves the utility’s own EIA price for the last 12 months, less its fixed customer charge, which solar does not cut. At Xcel: 14.970¢ less its $10.00 customer charge = 13.683¢.
  • Xcel case: 11,262 kWh × 68.51% × 13.683¢ = $1,055.73, plus 11,262 kWh × 31.49% × 3.16¢ = $112.07, so $1,167.80 a year. Less the $3.75 monthly metering charge ($45.00 a year): $1,122.80. Payback: $21,717 ÷ $1,122.80 = 19.3 years.
  • Black Hills Energy: home use saves 13.877¢ (15.577¢ less its $12.75 customer charge, an interim rate while rate case EL26-003 is pending). It charges for the extra meter but its rate sheet gives no amount, so its case leaves it out and runs slightly short.
  • MidAmerican: its four export prices weighted by when panels make power, 3.405¢ on average, and its $20.00 monthly charge ($240 a year): 38.7 years. If every export earned its lowest price, 2.26¢, it would be 41.7 years.
  • South Dakota’s 19.6 years weights the six utilities by the homes they serve, 64.5% of the state’s homes.
  • These figures count no upkeep and no rise in power prices. No financing or panel aging.
  • We did not model co-ops or city utilities. Sioux Valley Energy does not say what is netted before it pays, and no home-size price is filed for Southeastern Electric.

Run your own South Dakota numbers

What each South Dakota utility pays for the power you send out

Six utilities answer to the PUC, and each files its own price for power from small solar systems. Electric co-ops and city utilities set their own terms. The name at the top of your bill tells you which rules apply.

Xcel Energy

3.16¢ per kWh sent out

Rate Code E50, since January 1, 2026. Pays for at most 2,000 kWh a month; anything above that earns nothing. Metering charge $3.75 a month.

Next: ask for monthly exports, and check none tops 2,000 kWh.

Black Hills Energy

2.48¢ per kWh sent out

Schedule 3, unchanged since August 1, 2019. A monthly charge for the extra meter applies, with no amount on the rate sheet. Its rate case (EL26-003) is still pending: a settlement filed October 26, 2026 would set new rates from December 1, 2026 if the Commission approves it, so Schedule 3 cannot change from it before then.

Next: get the meter charge in writing before you sign.

An electric co-op or a city utility

Its own terms

Sioux Valley Energy credits 1.93¢ a kWh. Brookings, Pierre, Watertown and nine other cities buy power from Missouri River Energy Services, which filed a 3.45¢ minimum for 2026.

Next: get the price, any charge and the contract term in writing.

Prices filed with the PUC for power a home system sends out
Regulated utilityPays per kWh100 kWh sent out earnMonthly chargePrice in force since
Otter Tail Power4.871¢$4.87$1.33April 1, 2026
Montana-Dakota Utilities3.416¢$3.427¢ a dayJanuary 1, 2026
Xcel Energy3.16¢, up to 2,000 kWh a month$3.16$3.75January 1, 2026
NorthWestern Energy2.547¢$2.55$2.00April 1, 2025
Black Hills Energy2.48¢$2.48Charged, amount not publishedAugust 1, 2019
MidAmerican Energy2.26¢ to 4.61¢, by season and hour$2.26 to $4.61$20.00August 15, 2026

Swipe the table sideways to see every column.

For comparison, 100 kWh bought from the grid cost about $14.28 at the 14.28¢ state average. None of these prices is fixed for the life of your system: the Xcel, NorthWestern, Otter Tail and Montana-Dakota rate sheets say the price is reviewed each year.

Co-ops and city utilities: what their filings do and do not say

State law asks every utility to file with the PUC its minimum price for power from small renewable systems of 100 kW or less. The PUC does not approve co-op or city prices, and some filings on its list date from 2019.

  • Sioux Valley Energy’s rate schedule credits small renewable generation at 1.93¢ a kWh, from February 2026 bills (schedule updated October 2026). It does not say whether that covers all your solar power or only the extra.
  • Missouri River Energy Services filed 3.45¢ for 2026 for 12 city utilities: Beresford, Big Stone City, Brookings, Burke, Faith, Flandreau, Fort Pierre, Pickstown, Pierre, Vermillion, Watertown and Winner. The filing gives no metering rules or fees.
  • East River Electric’s December 22, 2025 filing for its member co-ops, including Southeastern Electric, prices only systems of 50 kW and larger. It gives no price for a home-size system.

South Dakota’s $2.85 per watt, from a 4 kW to a 10 kW system

The September 2026 benchmark sits $0.04 below the US average, tied 23rd lowest of 51. These are modeled cash prices, not quotes we collected.

Cash price and yearly output by system size
System sizeYearly outputCash price
4 kW5,912 kWh$11,400
6 kW8,868 kWh$17,100
7.62 kW (typical)11,262 kWh$21,717
10 kW14,780 kWh$28,500
How we got these numbers
  • Too few South Dakota homes install solar to measure a local median, so the 7.62 kW typical size is modeled from neighboring states. Size yours to your own use.
  • Output uses about 1,478 kWh per kW a year, around Sioux Falls. Shade lowers it.
  • Prices are for solar only, with no battery, as of September 25, 2026.
  • No rebate or state tax credit lowers these prices, and a system you own gets no federal tax credit after December 31, 2025.

Full South Dakota price guide

South Dakota’s one solar tax break: the first $50,000 or 70% of the system’s value

There is no state rebate, no state income tax credit and no federal credit for a system you own. What South Dakota law gives you is a partial property tax exemption on the solar equipment.

$50,000 or 70%Property tax exemption

Of the system’s assessed value, whichever is greater. No end date for solar (SDCL 10-4-44).

No formHow to claim it

Contact your county Director of Equalization after switch-on.

$0State tax credit

South Dakota has no state income tax, so there is no credit.

$0Federal credit, owned systems

Ended for systems placed in service after December 31, 2025.

The Department of Revenue gives two examples. A system assessed at $30,000 is fully exempt. A system assessed at $85,000 gets an exemption of $59,500, and $25,500 stays taxable. So a large system can still raise your assessment a little. The state’s guidance says nothing about batteries.

South Dakota incentives guide

Lease yes, PPA no: how South Dakota lets you pay for panels

Only the utility assigned to your address may sell you electricity, the PUC says. So a company cannot put panels on your roof and sell you their power by the kWh.

Ways to pay for solar in South Dakota
Way to pay
Who owns the panels
Allowed here?
Check before you sign
Cash
You
Yes
Savings priced at your utility’s filed export price
Loan
You
Yes
Total financed vs. cash price; over a payback this long, fees weigh heavily
Lease
The company
Yes, with a condition
It must give you all rights to operate, maintain and control the system
PPA (power sold by the kWh)
The company
No
Only your utility may sell you power

Swipe the table sideways to see every column.

What $0-down solar means in South Dakota

Which South Dakota homes come out ahead without net metering

  • Daytime useA kWh used as it is made saves about 14.28¢. Sent out, it earns 2.48¢ to 4.871¢.
  • Winter monthsPanels make far less in December than in June. Ask for a month-by-month estimate.
  • Roof and shadeReplace an old roof first, and ask for a shade report for your own roof.
  • Time in the homeSet your planned stay beside a payback of about 20 years, or more than 38 at MidAmerican.

Is solar worth it for your South Dakota home?

Two companies that list South Dakota, A to Z

Not ranked. Both serve it from North Dakota and Minnesota. Our South Dakota solar companies page rates six, including one based in Rapid City. GenPro Energy Solutions, based in Piedmont, now lists only farm, town, utility and business work, so it is not listed here. Neither publishes a South Dakota license number. Facts from their own sites and state records, read October 13 and 14, 2026.

Wind & Solar World

Office
Upham, ND
Licenses
No South Dakota number published; no North Dakota contractor record found (October 13, 2026)
Warranty
Panel makers’ 25 or 30 years; workmanship term not published
More facts
Working since
2007 (company says)
Ways to pay
Cash or loan. It also lists a PPA, which South Dakota does not allow.
Wind & Solar World profile

Wolf River Electric

Office
Isanti, MN; no South Dakota office listed
Licenses
Minnesota EA777669 and BC773271, active; no South Dakota number published
Warranty
25 years on labor, parts and roof leaks, written for Maxeon systems; ask which terms apply
More facts
Service states
MN, WI, IA, ND and SD
Ways to pay
Cash or loan
Wolf River Electric profile

Neither company buys homeowner leads from EcoGen America. Ask each one for its South Dakota electrical license number before you sign. How we make money.

Compare South Dakota solar companies in detail

Does your South Dakota quote use your utility’s filed price?

  • The export pricePower sent out priced at your utility’s filed rate, 2.48¢ to 4.871¢ at most regulated utilities, never at your full rate.
  • The home-use shareThe share of output they assume you use as it is made. Our figures use 68.51%, from the share sent to the grid as reported to EIA, not measured at the meter.
  • Month by monthA monthly production estimate that shows the winter dip, set beside your own monthly use.
  • Charges and limitsYour utility’s monthly solar charge, and on Xcel, no month above 2,000 kWh sent out.
  • Insurance and taxesThe $300,000 liability cover Xcel and Black Hills Energy ask for, and no 30% federal credit on a system you own.

Comparing South Dakota quotes?

Ask each installer to price the power you send out at your utility’s filed rate.

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South Dakota Solar FAQs

Does South Dakota have net metering?

No. The PUC says South Dakota does not pay for solar power at a net metered rate, and that lawmakers considered it in 2013, 2015 and 2016 and found it not in the public interest. Your utility buys extra power at its own filed price instead, paid month by month, so nothing is left at year end. Xcel, the largest, pays about 3¢ a kWh on no more than 2,000 kWh a month.

Can I still get the 30% federal tax credit?

No, not for a system you own that is placed in service after December 31, 2025. South Dakota has no state income tax, so it has no state credit either.

Will solar panels raise my South Dakota property tax?

Not for a system assessed at $50,000 or less. The exemption covers the first $50,000 of the system’s assessed value, or 70% of it, whichever is greater. Above that, part of the value stays taxable. There is no application.

Do solar panels work in South Dakota winters?

Yes, but they make far less in December than in June. Summer surplus is sold at your utility’s low price and does not carry over to winter bills. If electric heat makes winter your biggest season, compare a month-by-month estimate with your own monthly use.

Can a company sell me power from panels on my roof?

No. Only the utility assigned to your address may sell you electricity, so a power purchase agreement (PPA) is not an option. A lease is allowed if it gives you all rights to operate, maintain and control the system.

South Dakota rate sheets, statutes and the people behind this page

Sources (20 documents, each with the date we read it)
  1. EcoGen Solar Cost Index, September 2026: South Dakota$2.85 per watt as of September 25, 2026, 7.62 kW typical size modeled from neighboring states, 1,478 kWh per kW around Sioux Falls, 14.28¢ statewide average (EIA, 12 months to August 2026), solar only.
  2. South Dakota PUC: Solar energy FAQNo net metered rate, lease conditions and retail sales by the assigned utility only. Read September 30, 2026.
  3. South Dakota PUC: CompensationNet metering bills in the 2013, 2015 and 2016 sessions. Read September 30, 2026.
  4. South Dakota PUC: rates for small renewable power facilitiesFiled minimum prices, 100 kW line and co-op filing dates. Read September 30, 2026.
  5. Otter Tail Power: Section 12.01, Small Power Producer Rider4.571¢ base avoided cost, 0.300¢ solar credit, $1.33 a month, bills from April 1, 2026 (Docket EL26-001). Read October 14, 2026.
  6. Black Hills Power: Schedule 32.48¢ per kWh, effective August 1, 2019, $300,000 insurance, meter charge with no amount. Unchanged when read October 19, 2026.
  7. Xcel Energy: Rate Code E503.16¢ per kWh, $3.75 a month, 2,000 kWh monthly limit, effective January 1, 2026 (Docket EL25-025). Read October 14, 2026.
  8. Xcel Energy: general conditions for small qualifying facilities$300,000 liability insurance per occurrence. Read September 30, 2026.
  9. NorthWestern Energy: Rate No. 732.547¢ per kWh, $2.00 a month, effective April 1, 2025, reviewed each year. Read September 30, 2026.
  10. Montana-Dakota Utilities: Rate 953.416¢ per kWh, 7¢ a day, from January 1, 2026. Read September 30, 2026.
  11. MidAmerican Energy: Rate QF2.26¢ to 4.61¢ by season and hour, $20.00 a month, effective August 15, 2026 (Docket EL26-020). Read October 19, 2026.
  12. South Dakota PUC: 2026 electric docketsBlack Hills Power rate case EL26-003, filed February 19, 2026, pending: interim customer charge $12.75 from August 18, 2026; settlement filed October 26, 2026 asks for new rates from December 1, 2026, pending Commission approval. Read October 30, 2026.
  13. Sioux Valley Energy: rate schedule effective February 2026, updated October 20261.93¢ per kWh for small renewable generation. Read October 19, 2026.
  14. Missouri River Energy Services: filing of October 31, 20253.45¢ for 2026, 12 city utilities named. Read September 30, 2026.
  15. East River Electric Power Cooperative: filing of December 22, 2025Prices for 50 kW and larger only. Read September 30, 2026.
  16. South Dakota Department of Revenue: renewable resource property exemption$50,000 or 70%, the $30,000 and $85,000 examples, no application. Read September 30, 2026.
  17. South Dakota Codified Laws 10-4-44The exemption in law. Read September 30, 2026.
  18. South Dakota Department of Revenue: taxes for individualsNo state income tax. Read September 30, 2026.
  19. IRS: Residential Clean Energy CreditNo credit for property placed in service after December 31, 2025. Read September 30, 2026.
  20. Minnesota Department of Labor and Industry: license dataWolf River Electric (LTL LED LLC) licenses EA777669 and BC773271, active. Checked October 13, 2026. Other installer facts come from each company’s own site, read October 13 and 14, 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