Adding solar panels and switching rate plans can lower your Xcel Energy Minnesota electric bill
Updated: October 22, 2020Installing solar panels can help reduce your Xcel Energy bill, thanks to Florida’s sunshine and the company’s net metering program! Combined with the 30% solar tax credit, KUA customers can see great savings when they switch to solar!
On this page:
Solar panel cost calculator
Are solar panels worth it for Xcel Energy Minnesota customers?
Yes! With Xcel’s Solar Rewards program, available low income rebate, and sales and property tax exemptions, home solar panels make a lot of sense for Xcel customers in Minnesota. Xcel’s net metering rate also allows you to get full credit on your power bill for the excess solar electricity your panels produce which you can’t use onsite. Your credits accrue at the same rate as retail rates, and roll over to your next monthly bill.
Does Xcel Energy Minnesota offer net metering credits for exported solar power?
Yes, Xcel Energy Minnesota offers net metering credits.
Under the Xcel Energy Minnesota net metering program, solar panels will first send energy to your home. Any excess solar energy is sent to the grid and purchased in the form of a bill credit. The credit value is determined by the Tri-Party Net Metering Power Purchase Agreement. KUA customers are billed for all of the electric energy delivered to them by the company.
In addition to net metering, Xcel offers its Minnesota customers a program called Solar*Rewards, which pays a small additional amount for every kWh of solar energy your panels generate. The current payment is $.07/kWh for systems up to 40 kW in size, which can save the average Minnesota solar owner an extra $700 per year.
What incentives, tax credits, and rebates are available to Xcel Energy customers for installing solar?
The biggest financial incentive for solar homeowners is the 30% federal solar tax credit. The tax credit equals 30% of the solar installation costs and directly reduces your federal income tax liability.
Some states and local governments offer additional solar incentives. These incentives include state tax credits, rebates, or performance-based incentives like Solar Renewable Energy Credits (SRECs). The best part is that these local incentives can be used in addition to the federal tax credit!
Here is every incentive you may be eligible for as a Xcel Energy customer:
Table 1: Incentives
| Upfront Incentives | Value* |
|---|---|
| Residential Clean Energy Tax Credit (Federal) | -$7,121 |
|
Net Metering
(State)
Utilities must offer net metering and compensate at the average retail utility energy rate. |
Varies |
|
Wind and Solar-Electric (PV) Systems Property Tax Exemption
(State)
Solar property is exempt from property tax assessment. |
Varies |
|
Solar Energy Sales Tax Exemption
(State)
The purchase of PV generation equipment is exempt from sales tax |
Varies |
| TOTAL | -$7,121 |
*Based on 10.18 kW system, average installation cost $23,735
How much does installing solar panels save the average Xcel Energy Minnesota residential customer?
If you input the details for a Xcel Energy customer with a power bill of $200 per month into the best online solar panels calculator, it tells you that you need a 10.18 kW solar system that will produce 14,226 kWh per year and that this system will return the owner a $52,454 profit after repaying the cost of the system.
The solar savings possible for you as a Xcel Energy customer will depend on the amount of electricity you use and the cost of the solar system you buy. Savings also vary based on the direction of your roof or any shading of your roof that affects output.
Here is a monthly and lifetime solar savings estimate for the same relatively typical Xcel Energy customer with a $200 per month electric bill prior to solar and who installs a 10.18 kW solar system.
How much do residential solar panels cost for Xcel Energy customers?
Solar prices near you
Net profit (savings less system cost)
$33,842-$41,363
Payback period
10.4-12.7 years
Recommended size for the selected utility bill
10.1kW
Solar panel cost calculator
Detailed information about your estimate
Table 2: Estimate details
|
System Size (for 100% usage offset) 10.18 kW |
|
Annual Power Generation 14,226 kWh |
|
Pay-back time (assuming Cash purchase) 6.3 Years |
|
Internal Rate of Return (IRR) on Investment 13.4% |
|
Gross cost $23,735 |
|
Total Upfront Incentives and Rebates -$11,668 |
|
Net Cost of System after rebates and incentives $12,069 |
|
Total Cost of Utility Power Avoided over 25 years $64,523 |
Please note that the investment return figures do not include the possible increase in property value.
What are the environmental impacts of Xcel Energy Minnesota customers installing solar panels?
While most homeowners decide to install solar panels because of financial savings over time, the environmental impacts of this choice are the primary motive for others. Here is a breakdown of the environmental benefits from a Xcel Energy Minnesota customer installing a 10.18 kW solar system on their property:
A solar system generating 14,226 kWh per year will save you money AND make the world a nicer place
Saves you
$2,098
on average per year
Reduces CO2 emissions
7.04
tons per year
Equivalent to planting
49 trees
per year
Equivalent to driving
15,578 mi
less per year
CO2 emissions calculation based on the electricity generation and emissions data for your state in 2015 as published by the US Government Energy Information Administration.
What factors affect the price of solar panels for Xcel Energy Minnesota customers?
The cost of installing solar panels will vary with brands of solar panels and inverters you choose and also the installation company you choose to install them.
It is common to see really good systems, using quality brands of equipment, being sold for around $2.33 per watt or $12,069 for a standard 10.18 kW solar system after the customer claims the 30% federal solar tax credit.