Renewable Energy Technology Incentives in Minnesota | The Renewable Energy Hub USA

Renewable Energy Technology Incentives in Minnesota


The state of Minnesota has a number of renewable energy technology incentives in place to encourage both commercial and residential properties to install greener solutions. They have one of the most ambitious renewable portfolio standards in the US, hoping to provide 25% of their needs from green energy by 2025. Though a large portion of the energy mix currently comes from coal and nuclear, Minnesota is 7th in the US for wind power production.

The state has a reasonably robust solar sector with 136 companies providing employment for over 2,000 people. It currently has 27 MW of capacity installed and the biggest installation is the Slayton Solar Project with a capacity of 2 MW. A number of corporations such as Ikea and Mortenson Construction have solar panels installed on their commercial premises. With a number of new initiatives, it’s hoped that solar will begin to power forward over the next ten years.

Minnesota has some fairly large wind farms including Buffalo Ridge capable a producing 225 MW. Wind generation has more than doubled in the last 8 years with incentives and legislation in place to promote the installation of wind turbines of all sizes. The state has over 2,200 wind turbines producing a total capacity of 3,235 MW with a further 429 MW in the pipeline. Other renewable technologies such a hydroelectricity and biomass are not as prevalent in Minnesota as they are in other states but have potential to boost the percentage of green energy.

Solar PV Incentives in Minnesota

Solar capacity has increased considerably over the last ten years but still falls behind many other states in the US. There are incentives such as the Federal Tax Rebate but also other state provision such as the New Ulm Public Utilities Solar Electric Rebate Program for commercial, residential and industrial installations. There is also the performance based incentive the Xcel Energy Solar Rewards Program to take advantage of for the first ten years of operation of an array.

Solar PV Case Study in Minnesota

You have the choice of either buying your solar array outright and pocketing all the incentives or leasing from a supplier, whereby you benefit from cheaper electricity bills but hand everything else over to the installing company. A 5 kW array should cost in the region of $20,000 but you get the tax rebate but also benefit from the solar rewards program which could pay you back as much as $450 a year. You should see a return on investment within 13 years and after that can expect to make a profit of over $11,000 during the 25-year lifetime of the array. You’ll also see a significant improvement on the sale value of your property.

Solar Thermal Incentives in Minnesota

Solar thermal also benefits from some of the same incentives as solar PV including the Federal Tax Rebate. Installing a solar thermal array is becoming more popular as it can save large amounts on areas like water heating. There is also a major incentive from the Made in Minnesota Solar Thermal Rebate scheme that can pay as much as 25% back on your initial investment.

Small Hydro Incentives in Minnesota

Large scale hydroelectric and micro hydro are not big business in Minnesota though there is potential for this kind of energy in the state’s renewable mix. Current installations benefit from the Federal Tax Rebate and can provide a good return on investment when put in the right place.

Geothermal Incentives in Minnesota

The promotion of installations such as ground source heat pumps forms an important part of the state move to greener energies. With properties that have the right space and are well insulated, there are incentives in place to help with any installation. Many of the major utility companies run a rebate system such as the Minnesota Power Residential Energy Efficiency Rebate Program which is aimed at this kind of installation.

Biomass Incentives in Minnesota

A number of companies such as UPN Blandin are powered in part by burning wood waste and the state has a range of biomass power plants including Fibrominn which has a capacity of about 55 MW. Most of the incentives are aimed at the large scale introduction of this technology such as the Farm Opportunities Loan Program. Residential and commercial wood chip burning boilers and heating are becoming more popular as they are in other states.

Wind Power Incentives in Minnesota

Wind energy is on the increase in the state and capacity has grown considerably over the last ten years though there is still some way to go to reach its full potenital. The CapX2020 project is designed to improve connection between turbines and the grid and boost wind capacity over the next five years and is being done in conjunction with surrounding states. There are incentives such as the Federal Tax Rebate but also tax breaks in place including the Wind Energy Sales Tax Exemption for both large scale and small wind turbine installations.

As with many of the states in the north east of America, the renewable technology engagement of Minnesota is a work in progress. With tough targets to reach by 2025, you should expect to see the further development of wind power but also a stronger focus on solar, both commercial and residential.

You can find out more about the renewable technology incentives offered by Minnesota on the DSIRE website.

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