Renewable Energy Technology Incentives in South Dakota | The Renewable Energy Hub USA

Renewable Energy Technology Incentives in South Dakota


The majority of South Dakota’s electricity, some 73%, is produced through hydroelectric and wind power so it can be considered one of the greenest states in the US when it comes to renewable technologies. The state recently became the first in the country to get over 20% of its electricity from wind power and there is good potential for developing solar PV in the region despite capacity being small at the moment.

South Dakota has four major hydroelectric power stations – Big Bend, Fort Randall, Gavin’s Point and Oahe. Built in 1963, the Big Bend Dam on the Missouri River produces nearly a 1,000 million kWh a year. The Fort Randall Dam has eight generating units that produce over 1.7 billion kWh a year. South Dakota can also draw on 800 MW of generating capacity from wind farms across the state. The biggest installation is at Buffalo Ridge Farm with a capacity of 287 MW, followed by the Crow Lake Wind Project.

Not surprisingly, solar PV lags far behind as a renewable resource for the state and there is currently just 0.5 MW total capacity installed, most of which is residential. There are just 15 solar companies operating in the state, employing around 200 workers. South Dakota also has three power plants that utilise waste heat that produces a capacity of 16.5 MW.

Solar PV Incentives in South Dakota

Despite the fact that solar in the state is not high on the agenda, there are a number of incentives available to promote installation for both residential and commercial needs. There is the 30% Federal Tax Rebate and various other state tax breaks such as the Renewable Energy System Exemption and the Renewable Energy Facility Sales and Use Tax Reimbursement. There are also a number of low cost loan schemes that both residential and commercial installers can take advantage of.

Solar PV Case Study in South Dakota

The state allows both outright purchase and leasing for solar PV and the cost of a 5 kW array will normally be around $20,000 which is average for the US. You can immediately reduce that amount with the Federal Tax Rebate of 30% and with reduced electricity costs you should expect to pay off any investment by year 16. That will leave you with a net profit after 25 years of over $14,000 and could well add a similar amount onto the sale value of your home.

Solar Thermal Incentives in South Dakota

Solar thermal in South Dakota has become more popular in recent years as an economical way to heat water without the associated higher costs of installing solar PV. There are a number of federal incentives and the state administered Renewable Energy System Exemption which is available for a wide range of renewable technologies.

Small Hydro Incentives in South Dakota

There is potential for small hydro in South Dakota, particularly for remote communities and farmland where installation is relatively cost effective and produces a decent return on investment. Installers can benefit from the Federal Tax Rebate and other incentives such as the Renewable Energy System Exemption as well as a number of federal grant schemes that are aimed at agricultural businesses.

Geothermal Incentives in South Dakota

As in other states across the US, geothermal is eligible for a number of incentives. Installations such as ground source heat pumps can provide a good return on investment if applied to well insulated properties with enough surrounding acreage for the pipe network. Many of the utility companies offer rebate incentives including one from the Otter Tail Power Company Commercial Energy Efficiency Rebate Program.

Biomass Incentives in South Dakota

While the state has invested in producing power from waste heat, there has been less emphasis put on biomass energy production though there are plenty of the natural resources to develop this area. There are a number of incentives in place for commercial biomass as well as anaerobic digestion on farm land, including the Federal Tax Rebate. There are some tax exemptions available for residential and business installations of biomass boilers and wood chip burners including the Renewable Energy Facility Sales and Use Tax Reimbursement.

Wind Power Incentives in South Dakota

Most of the emphasis has been put on large scale wind farm development in the state and it now provides over 20% of the electricity mix. With vasst amounts of farmland available, the prospect for small scale wind power is good and can provide additional revenue for many agricultural businesses and remote communities. Wind power benefits from the Federal Tax Rebate and property tax exemptions as well as low cost loans such as the federal High Energy Cost Grant Program.

South Dakota already produces a large part of its electricity from renewable resources, thanks mainly to the hydro and wind infrastructure in the state. There is much more scope for increasing areas such as solar PV and geothermal and the future could see South Dakota becoming the first state to go 100% renewable.

You can find out more about the incentives available for renewable technology in South Dakota on the DSIRE website

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