Minnesota Solar Panel Cost: Savings and Payback (October 2025)

You'll spend an average of $13,860 on a 5 kW system in Minnesota, after tax incentives.
For Minnesota, you can use $3.82 per watt to determine the price of a larger system (system size x price per watt x 0.7 to account for tax incentives).

High Power Bills?

Reduce or replace your electricity bill with solar

Brogan Woodburn

Last updated: October 7, 2025

Fact checked by: Alex Zdanov

What to know

Cost: About $5,544 for a 2 kW system to $16,632 for a 6 kW system after tax credit.
Savings: 11 year payback; about $11,961 saved over 20 years.
Environmental benefits: Potential to reduce your carbon emissions significantly.

Going solar in Minnesota now averages about $3.82 per watt. That means you can expect to pay roughly $3,823 per kilowatt (kW) of installed capacity before incentives. For example, a 5 kW system typically costs around $19,800 before applying the 30% federal tax credit. Once you factor in that tax credit, the out-of-pocket cost for a 5 kW installation comes to about $13,860

However, a 5 kW system isn't necessarily the best size for homeowners in Minnesota. According to our data, Minnesota residents currently pay an average of 15.86¢ per kWh, with a typical electric bill of around $107.56 per month for 678 kWh of consumption. Considering this energy usage, a 6 kW system is ideal to cover the energy needs of most.

How long does it take to see a return on your investment in Minnesota?

The upfront cost is what you pay for a system (whether you pay cash or finance doesn't factor in this equation). The payback period is the amount of time until you break even on your investment considering savings from energy bills. And the net 20-year savings is what you save over 20 years minus the upfront costs. All of these work together to show how much you could save with solar in the state.

5 kWh System	Minnesota Average	U.S. Average
Upfront Cost	$13,860	$12,530
Payback period	11 Years	7 Years
Net 20-year savings	$11,961	$22,797
*These are estimates. Getting personalized quotes from local installers is crucial for accurate pricing.

Federal tax credit impact: The 30% federal Residential Clean Energy Credit significantly reduces your installation costs. For example, a $20,000 system would cost you $14,000 after the credit.

Is Minnesota good for home solar panels?

To gauge potential, we look at average roof size, system capacity, and electrical production.

Roof size: 723.938 sq. ft.
System capacity: Up to 11,527.238 kW DC
Electricity production: About 1,390.735 kWh AC per year

On average, a solar power system in Minnesota can lower your electricity bill and pay for itself over time.

Below you can see power generation, cost, and savings of different system sizes.

	2 kW System	3 kW System	4 kW System	5 kW System	6 kW System
Roof Space	143 ft²	215 ft²	286 ft²	358 ft²	429 ft²
Annual power value	$441	$662	$882	$1,103	$1,291
Average cost	$5,544	$8,316	$11,088	$13,860	$16,632
Average yearly production	2,78 kWh	4,172 kWh	5,562 kWh	6,953 kWh	8,344 kWh
Average monthly savings*	$36.76	$55.14	$73.52	$91.90 best value	$107.56
Full payback period	4 years	6 years	9 years	11 years	13 years
CO₂ reduction per year	1.16 tons	1.74 tons	2.33 tons	2.91 tons	3.40 tons
*Savings assume a $107.56 monthly electricity bill

How to pay for solar panels in Minnesota

Purchasing solar panels is no small task. Here are a few ways you can pay for solar:

Cash purchase: This is the best choice if you can afford it. Paying in cash gives you the best long-term savings but requires a larger upfront investment, of course.
Solar loans: You can spread the cost over time with a loan, but be mindful of interest rates and loan terms.
Solar leases and PPAs: Power purchase agreements (PPA) and leases have lower upfront costs. However, you don't own the system, which means you save the least over time. There can also be complications if you want to sell your home.

What affects the cost of solar panels in Minnesota?

Several factors impact the final price of your solar installation:

System size: Larger systems cost more upfront but often yield greater long-term savings.
Panel type and efficiency: Monocrystalline panels are generally more efficient and expensive than polycrystalline or thin-film options.
Installation complexity: Roof type, shading, and site-specific challenges can increase installation costs. Permitting and inspection fees also factor in.
Additional considerations: Battery storage adds to the initial investment but provides backup power and greater energy independence. Labor and installation quality are also essential cost considerations.

How to save on Minnesota solar panel costs

Getting the most bang for your buck is essential when investing in solar. Here are some strategies to save money:

Maximize the federal tax credit: Understand the eligibility requirements and claim the full 30% credit.
Shop around for quotes: Get quotes from multiple installers to compare pricing and services. Don't just focus on the lowest price; consider reputation, experience, and warranty.
Consider system size: Be careful of going overboard. A properly sized system will meet your energy needs without unnecessary costs. Analyze your energy usage to determine the optimal size.
Explore financing options: Compare loan interest rates and terms carefully. If considering a lease or PPA, understand the long-term implications and potential trade-offs. Cash purchases often offer the best long-term savings.
Negotiate with installers: Don't be afraid to negotiate on price. Inquire about any discounts or promotions they may offer.
Optimize your home's energy efficiency: Before going solar, improve your home's energy efficiency. This will reduce your overall energy consumption and potentially allow you to install a smaller, less expensive solar system. Simple steps like sealing air leaks and upgrading appliances can make a difference.
DIY (if possible and permitted): While professional installation is generally recommended, some homeowners may be able to handle certain tasks themselves (like site preparation). Check your local regulations and be honest about your abilities.
Ask about rebates and incentives: Many states, cities, and utility companies offer rebates, net metering, and other incentives. Check with your local utility and city/county for any available programs.
Time your installation: Sometimes, installers offer discounts during slower periods. Inquiring about seasonal promotions might yield savings.

Minnesota-specific solar considerations

Weather Impacts: Minnesota offers plenty of summer sunlight, but the long, harsh winters with heavy snowfall and low sun angles can challenge solar performance. Fortunately, modern panels are designed to cope with cold temperatures, and proper installation techniques can help manage snow build-up.
Regulatory and Legal Considerations: The permitting process in Minnesota is straightforward, with clear state and local guidelines. It's wise to consult local authorities and, if applicable, your HOA to ensure your installation meets all the necessary requirements.

Solar panel prices in other states vs Minnesota

Solar panel prices in Minnesota's biggest cities

Get a custom solar quote in Minnesota

Going solar in Minnesota can be a financially and environmentally sound decision. By understanding how much it costs and how much you can save, you can make an informed investment and enjoy using clean energy for years to come. Get multiple quotes from reputable installers, compare your options, and take control of your energy.