How to Save Money on Solar Panels in North Dakota

The photo with solar panels and a woman's palm holding a toy house shows the flag State of North Dakota in the sun.

How to Save Money on Solar Panels in North Dakota

Key Points

  • North Dakota produced the least amount of solar energy in the US in 2022, focusing on wind and biomass renewables instead.
  • Homeowners in North Dakota can save over $27,000 on electricity with solar panels over 25 years.
  • The federal solar tax credit offers a 30% return on solar array purchases, cutting installation costs by nearly $4,500 for a 6kW system.
  • North Dakota’s net metering policy requires certain utility companies to pay for excess solar energy connected to the grid.
  • Property tax exemptions for solar arrays in North Dakota last for 15 years, potentially saving homeowners hundreds or thousands of dollars.

In 2022, North Dakota produced the least amount of solar energy in the entire country. With the state’s focus on wind and biomass renewables, there’s hardly support for anything else. Still, those considering solar panels in North Dakota can find savings of $27,000 or more.

But where do you look? With some of the fewest opportunities for solar energy, it can prove challenging to find out how to start. In this article, we break down all the ways to save money on solar. From net metering to tax exemptions, here’s what you need to know.

How to Save Money on Solar Panels in North Dakota: Overview

Right off the bat, it’s easy to see that solar panels in North Dakota can save homeowners thousands on electricity. With low prices on equipment and surprisingly good sunlight, North Dakotans could see a net return of over $27,000 or more over 25 years.

However, this is just about where the benefits end in the Peace Garden State. North Dakota focuses most of its attention on wind and biomass energy, leaving solar in the dust. Beyond the federal incentive, the state has scraps of opportunities. Still, any little bit helps, so let’s cover them below.

Solar Panels in North Dakota: Federal Incentive

If you want to save any extra money on solar panels in North Dakota, you’ll have to take advantage of the federal solar tax credit. This program offers a 30% return on all purchases made toward a solar array. This includes equipment and batteries, labor, and sales tax. North Dakotans applying this credit to a 6kW system could cut the installation cost by nearly $4,500.

It’s important to know that this program requires you to purchase your system outright. You’ll also have to live at the home where the array is installed and have entirely new equipment. You can take advantage of this credit until 2035 when the program ends.

Solar panels on the autumn prairie
Homeowners can take advantage of net metering and tax exemptions for solar panels in North Dakota.


North Dakota’s State Credits and Rebates

In some states, financial incentives exist to help cover the initial cost of an installation. These typically come in the form of income tax credits and equipment rebates. Unfortunately, North Dakota offers neither of these, meaning you’ll have to rely on the federal credit for support.

In fact, the only glimpse of a financial incentive comes from the Peace Garden State’s net metering policy. This is a mandate that requires utility companies to pay for excess solar energy that’s connected to the grid. However, North Dakota’s net metering rules are menial compared to other states.

First, it’s essential to know that not all utility companies have this mandate. Any municipal or cooperative energy companies have an exemption from net metering. The only companies required to pay out for extra power are investor-owned, of which only three exist in North Dakota:

  1. Montana-Dakota Utilities Co.
  2. Northern States Power Company
  3. Otter Tail Power Company

Now, if you’re lucky enough to have one of these companies as your electricity provider, you can utilize net metering. However, these companies only have to pay out at the avoided-cost rate. In North Dakota, that’s only about 2.6 cents per kWh (compare to the retail rate of 12.8 cents per kWh). 

Solar Panels in North Dakota: Government Regulations

The total lack of support for solar panels stems from North Dakota’s outdated renewable portfolio standards (RPS). We use the RPS to determine a state’s intention to invest in future renewables. 

North Dakota had a voluntary RPS of 10% renewables, most of which was covered by wind and biomass. However, this was never enforced, and the standards expired in 2015. Without renewal in the last 8 years, there’s no expectation for support any time soon.

Rest assured, the Peace Garden State does regulate property tax exemptions for solar arrays. With a system potentially increasing the property value of a home by significant margins, it’s nice to know that your taxes won’t increase. These exemptions last for 15 years, saving you hundreds if not thousands over the whole period.

Should North Dakotans Lease Solar?

Some states offer solar leasing options for those without the funds to purchase a system outright. While it typically disqualifies homeowners from incentives, including the federal solar tax credit, it can still save money on electricity in the long run. Unfortunately, solar leasing is unavailable in North Dakota.

Solar Panels in North Dakota: Incentive Summary

Federal Tax Incentive30% credit
North Dakota Tax Credits / RebatesNone / none
Net MeteringNet metering at avoided cost rate; only applicable to investor-owned utility companies
Renewable Portfolio Standard10% by 2015, voluntary (expired)
Property Tax Exemption100% for 15 years
Sales Tax ExemptionNone
Performance Payment ProgramNone 

Frequently Asked Questions

Do you actually save money going solar in North Dakota?

While there’s no support for solar panels in North Dakota, the low equipment prices and excellent sunlight can make them viable. In fact, homeowners with a 6kW system could save over $27,000 on electricity bills in 25 years.

How long does it take for solar panels to pay for themselves in North Dakota?

In North Dakota, homeowners typically spend about $1,667.88 on electricity. When used to offset the cost of a 6kW solar array, they can pay it off in about 8.7 years.

How much do solar panels cost in North Dakota?

North Dakotans can expect to spend about $2.42 per watt for solar energy. This equals around $14,520 for a 6kW array.

Can I use the federal tax incentive in North Dakota?

Homeowners in North Dakota should take advantage of the federal solar tax credit. This returns 30% of all solar purchases, including equipment, labor, and sales tax. Those applying the credit to a 6kW system could save nearly $4,500.

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