Lower Solar Panel Cost in North Dakota: Soar Incentives, ND Tax Credits, Rebate

There are so many state, city, and municipal level solar tax incentives that you can take advantage of now that will make such an investment worthwhile.

If you live in North Dakota, you should strive to get ahead of the curve as soon as possible. Renewable energy, especially solar energy, will become more practical and available in the state within the coming years.

And many solar tax incentive offers have first come, first served limitations. Or they are only available for limited time periods or on an annual basis for as long as funding lasts, especially at the state and local levels.

This guide explains all the North Dakota solar incentives available that can significantly reduce the cost of solar panels in North Dakota.

Solar Panel Cost: North Dakota Renewable Energy

North Dakota ranks absolutely dead last when it comes to American states with up-and-running renewable energy infrastructures,¹ and that is especially true when it comes to solar energy systems.

If you count the District of Columbia, North Dakota actually comes in 51st when it comes to state, commercial, and residential-governed solar panel energy generation.

Even the American territory of Puerto Rico ranks higher than North Dakota when it comes to installed residential solar panels and widespread solar energy generation.

Presently, less than half of one megawatt of solar energy is produced in North Dakota. The state of North Dakota barely produces enough solar energy to power one refrigerator for a full year.

Currently, the state of North Dakota probably produces enough solar energy on the residential level to power less than 150 homes, and that might be an optimistic estimate.² And since there are about 780,000 people living in North Dakota, that is a lot of lost potential for homeowners to benefit from solar energy.³

The majority of North Dakota’s energy is generated via fossil fuels and to a lesser extent, renewable wind turbine energy.

The world is going to change relative to widespread fossil fuel use. Fossil fuels are not going anywhere anytime soon, but the use of renewable energy sources like solar will inevitably increase.

Many American states are already implementing solar power infrastructure systems to supplement their power generation. While North Dakota is dead last for now when it comes to such initiatives, it will one day catch up.

Why are solar panels so expensive? The cost of specialized parts and the energy conversion process makes it expensive.

North Dakota Solar Incentives: Ripe for the Taking Right Now

And there will be plentiful solar tax incentives waiting for every North Dakotan resident who wants to take advantage of them in a state where the renewable energy infrastructure is still in its infancy.

Why wait to take advantage of such plentiful ND solar incentives now?

North Dakota is also known as the Peace Garden state.⁴ “Dakota,” is an Indigenous American word that roughly translates to “ally,” or “friend.”⁵

In 1932, an international peace garden site was installed on an area straddling the border between Manitoba, Canada, and North Dakota, United States.

The International Peace Garden is a symbolic manifestation of an accord between the United States and Canada to never wage war with one another. And that is why North Dakota is known as the Peace Garden state.

However, you should think about your own peace of mind financially if you live in the Peace Garden state and invest in solar panel energy systems for the tax incentives right now.

North Dakota may be the last ranked state now when it comes to solar panel energy generation, but some lucky residents in the near future will be the first state residents to take full advantage of available solar tax credits.

As a North Dakota homeowner, you could qualify for a 30% or more federal solar tax incentive against the startup costs of your residential solar panel energy system. And that is not even including the other state, local, and municipal solar tax incentives you may qualify for.

You may qualify for more solar tax incentives than you can imagine. But they are not plainly advertised.

You have to find the solar tax incentives that you could potentially be eligible for, which is a research-intensive process.

Many people don’t know about these North Aakota solar incentives or become exasperated by the research required and don’t even try to find out.

North Dakota residents will find a comprehensive list of solar tax credits within this guide. Firstly, here are some persuasive points about the benefits of investing in solar energy power systems in North Dakota now.

North Dakota Solar Tax Credit: Solar Panels for Home

This is the primary federal-level tax credit that North Dakotan residents can take advantage of to recoup up to 30% of their initial costs to install a solar panel energy system.

Any homeowner in any state can apply for the federal solar tax credit as long as they own their solar panel energy system. And there is no expense limit that can be applied to the federal solar tax credit incentive.

If your solar panel energy system costs $24,000 or $105,000, you will still be eligible for a 30% tax credit against your installation start-up costs.

Here is how the federal solar tax credit works and how North Dakotan homeowners can apply for it.

The Solar Investment Tax Credit (ITC)

Put simply, the federal solar tax credit is a tax credit that reduces your solar panel energy system installation by 30% against your tax obligations for the year you installed the system. The federal solar tax credit is not a tax refund, rebate, or deduction, it is a tax credit that simply reduces your tax obligation for the year based on your solar panel system purchase.

It is a residential solar tax incentive designed to persuade American homeowners to invest in solar energy generation, buy a home, and live in it for a lifetime.

The federal solar tax credit is also known as the ITC or investment tax credit. But its official name is the Residential Clean Energy Credit.

All you have to do is be a homeowner in an American state and buy and install a solar panel energy system. Then, the American federal income tax system will allow you to claim a 30% credit on your taxes, reducing your payment obligation by that same percentage, against your installation costs.

How does the solar tax credit work if I don’t owe taxes? The solar tax credit reduces your taxes, if you don’t owe any taxes, then the credit is moot.

So, if you live in North Dakota and pay $24,000 to have your solar panel energy system installed on your property, then you would qualify for a $7,200 credit on your taxes. You can claim a dollar-for-dollar $7,200 reduction on your tax obligation for the same tax year you had the solar panel system installed.

The average solar tax credit savings for the typical American homeowner who takes advantage of the credit is at least $7,500.

Solar Rebates From the Government: How To Qualify

You must own your solar panel modules and equipment to qualify for the solar tax credit.

If you lease or rent your solar panel array from a business, then the owners of the solar panels qualify for the solar tax credits, not you.

Your solar panel modules and equipment must be activated and currently generating solar energy for you during the same tax year the solar tax credit is claimed.

The solar panel modules and affiliated equipment you own must be located on the property you own within the United States.

Additionally, the solar tax credit only applies to photovoltaic solar panel modules installed on your property..

Federal Energy Credits: Deadlines

You must apply for federal solar tax credits via IRS Form 5695.²⁹ And if you are still on the fence about installing a solar panel energy system, or about the benefits of applying for federal solar tax credits, then you have time to think about it.

Don’t waste that time. The more time you take to make a decision, the less you will be able to financially benefit from the federal solar energy tax credit.

Even though the federal solar tax credit you could qualify for now is 30%, that qualifiable percentage will incrementally reduce over the next decade until it is phased out entirely

If you installed your solar panel energy system between 017 and 2019, then the federal solar tax credit was 30%. During the tax year of 2020 through 2021, the federal solar tax credit was reduced to 26%.

In 2022, President Joe Biden and the American Congress ratified the Inflation Reduction Act of 2022 which extended the ability for homeowners to apply for federal solar tax credit through the year 2034.²⁴

The IRA of 2022 extended the 30% federal solar tax credit from 2022 through 2032. Then, the IRA of 2022 will reduce to 26% in 2033.

The federal solar tax credit will then be reduced again to 22% by 2034.

The federal solar tax credit will then be phased out by 2035. And it won’t be extended again unless new federal solar tax credit laws are ratified by the American government before then.

What Solar Panel Equipment and Expenses Qualifies for Federal Solar Tax Credits?

To qualify for federal solar tax credits, you can only claim expenses on specific kinds of solar panel cost NDl energy system equipment.

Firstly, your solar panels must be photovoltaic.

Contractor labor, assembly, and installation of equipment parts are also eligible expenses

Required inspections, permitting fees, state sale taxes if applicable, and installation and development fees are also qualifiable.

3-kilowatt solar battery equipment is quantifiable as well.

Federal Solar Tax Credit Application Process

Add IRS Form 5695 to your federal income tax filing. You can add your personalized documentation related to the installation, with information supplied by your contractor, with the application.

Get a tax specialist to help you.

North Dakota Property Tax Exemption via the Federal Solar Tax Credit

A photovoltaic solar panel system installation increases home values by $15,000, and that is a conservative estimate.²⁵

Such an installation can also cause a property tax surge. It’s 4.5% in North Dakota.

State residents who buy solar panels don’t have to pay it for half a decade. Your contractor must automatically deduct the sales tax with the final invoice.

Does solar increase home value? Yes, but such factors depend on the region and the current housing market.

ND Solar Incentives: Net Metering

Net metering is an energy utility buyback plan whereupon the local energy company buys back surplus solar energy from local residents at energy industry-avoided cost rates.

After agreeing to a net metering buyback initiative and signing a contract, a local utility company will install a smart energy meter on your property. Whenever your solar panel energy system generates more power than you use or need, the excess can be converted into credits against a future bill or sold back to the utility company.

North Dakota legally ratified a net metering law in 1991, but the energy buyback process only applies to IOUs or investor-owned utility companies.²⁶ If you are a North Dakota resident and homeowner served by a public, municipal utility company, then you can’t qualify for net metering buyback initiatives.

Additionally, the IOU company can buy your excess solar energy back at avoided-cost rates, meaning that the IOU company can set its own energy industry wholesale rates when buying your excess solar energy.

North Dakota Solar Rebate

Currently, North Dakota does not offer any state-level solar tax credits, incentives, or rebates.²⁷ While this situation is bound to change in the long-term future, it’s not surprising considering the current energy sector supremacy of the fossil fuel industry in the state.

Don’t be discouraged. The federal solar tax credit was supposed to end a few years ago but was extended through to 2034.

North Dakota will start offering state-level solar tax credits, rebates, and incentives as the solar energy industry grows and expands in the state in the near future.

Considering that the average price of a solar panel system in North Dakota is $24,000 or less, the federal solar tax credit is probably more than adequate to gain significant savings.

Free Solar Panels North Dakota

No one gets solar panels for free. You may receive a discount or free installation of solar panels in exchange for leasing or renting them by the business offering such.

In exchange for signing a long-term lease or rental agreement, you may be required to pay rent on the value of the equipment. Or you may pay for the solar energy generated by the loaned solar equipment in a power purchasing agreement, or a PPA.

You don’t own the solar panels and an outside business will control its functions. And the owners of the equipment will be able to apply for the solar tax credits, not you.

How to get solar panels for free? You can’t, such offers allow you to rent or lease solar panels on your property.

The solar energy industry has a long way to go before being fully embraced in the fossil fuel-friendly state of North Dakota. And it will probably happen later than sooner.

Solar Panel Cost in North Dakota and Benefit Breakdown

Before you understand as a North Dakotan homeowner and the frequent bill payer of electric bills the multiple benefits of ND solar incentives, here are some benefits to strongly consider before investing in solar panels.

Solar Panel Cost in North Dakota: Solar Incentives

For the average North Dakotan homeowner, the cost of investing in an 8 kW residential solar panel energy system is about $24,000 to $28,000.⁶ Since North Dakota is dead last in states with existing renewable energy infrastructures, state residents will have very limited options on where to buy their solar panel systems locally.

Still, you could save 30% or more on your solar panel cost ND initial installation costs if you avail yourself of every federal, state, and local solar tax incentive that you qualify for.

As a North Dakotan resident, the idea of converting to a solar power system may seem very foreign to you, but the world is slowly adapting to solar energy. Moreover, the cost of solar panel components get cheaper by the day.

So, while you shouldn’t wait forever to invest in solar energy, especially if you want to take advantage of available solar tax incentives, the cost of solar panel modules will only get more affordable as time goes on.

Because the United States federal government and dozens of state governments have pledged to invest in renewable energy systems to phase out fossil fuels, combat climate change, and reduce energy bills, the cost of manufacturing solar panel components has steadily fallen for decades.

The manufacturing costs of solar panel equipment have dropped by over 94% since 1989.⁷ The manufacturing costs of solar panel equipment dropped over 90% between 2009 and 2019 alone.

How Much Are Solar Panels in North Dakota?

The average cost of a solar panel energy system in North Dakota is at least $24,000. But the real-world price that you pay for a solar panel array can depend on a variety of factors.

You could pay as much as $40,000 for a solar panel energy system.

Solar Panel Installation Cost North Dakota: Energy Offset Advantages

North Dakotan households pay less on their monthly electricity bills than the average American household. So, you should really consider if investing in solar panel energy systems is right for you before making such a big decision.

A North Dakotan household utilizes about 1,000 kW of electricity in one month. A typical energy bill in the state is $113 monthly bill.⁸

An American household typically uses about 886 kW of electricity every month and is charged a $121 monthly energy bill.

The average North Dakotan household pays about $0.10 per kWh while the average American household pays $0.13 per kWh.

So, the typical North Dakotan household pays $113 monthly or about $1,356 annually on their electricity bills. After a decade, that cost amounts to $13,560 in electricity costs alone.

You should keep in mind that the average homeowner who invests in solar panels energy systems can offset their annual energy costs by as much as $1,500.⁹ That is a potential electricity bill savings of over $125 monthly and over $15,000 within a decade.

These costs were calculated for average homeowners who invest in a 6 kW residential solar panel energy system, so your actual real-life financial costs and savings will vary. Still, you can significantly offset your current monthly energy bill by investing in solar today.

You may pay less than $2.42 per watt after investing in solar panel cost ND.

The typical solar panel module is anywhere between 15% to 23% efficient.¹⁰ That means that it converts over 23% of the sunlight that shines upon it into usable electricity.

Solar panel efficiency ratings improve all of the time and the average solar panel module is designed to last anywhere between 25 to 30 years. So, a North Dakotan homeowner with a solar panel system on their roof could save over $30,000 in energy costs within 20 to 25 and potentially more over a lifetime.

If you live in North Dakota, you may pay less than the national average for electricity but don’t take it for granted too long. Inflation and the cost of living increase all of the time, and the cost of electricity is projected to steadily increase for the foreseeable future.

The price of electricity spiked by over 14.3% in 2022 relative to the previous year.¹¹ The typical American household may have to pay $0.15 per kWh for electricity by 2024.

Incredibly, these might be appreciably conservative energy price increase estimates. Over 50% of American households that make less than $35,000 annually will regularly forfeit paying other vital bills to pay for the monthly electricity bill.¹²

Some economists and energy experts believe that the world is already in the throes of an energy crisis that the general public, already assailed by inflation and the rising cost of living standards, has yet to accept and deal with.

The point is that current residential electricity bill costs are not going to remain static. Investing in a solar panel cost ND energy system now, especially now before anyone else in the state is even aware of available solar tax incentives, will ensure that you save thousands of dollars years and decades from now.

ND Solar Incentives (North Dakota’s Renewable Energy Future)

As previously mentioned, North Dakota is dead last in rankings when it comes to states and even American territories with solar energy infrastructures.

So why is that?

North Dakota, a very fossil fuel-friendly state, has been slow to meet the inevitability of the future of renewable energy. Over 80% of the world’s energy infrastructure system is still wholly powered by fossil fuels.¹³

Over 39% of the electricity generated in the United States is derived from natural gas sources.¹⁴

Over 20% of the electricity annually consumed in the United States is generated by burning coal. Another 21% of the electricity consumed by Americans is a mix of renewable energy sources.

While this is a great start to a renewable energy future, it is still the proverbial first footstep in a thousand-mile journey. The world nor the United States won’t be powered primarily or solely by renewable energy sources for the foreseeable future.

Additionally, old energy consumption habits die extremely hard. The United States has relied on fossil fuels for its energy infrastructure for over a century, along with states like North Dakota.

North Dakota is the least solar energy-friendly state in the union. It is still wholly powered by fossil fuels.

Burning fossil fuels is a relatively inexpensive endeavor for the state government compared to completely converting its infrastructure to embracing renewable energy sources.

North Dakota has brutally cold winters, a fact that can be mitigated by storing solar energy in battery equipment. And while the state has a lot of sunny days annually, it also has a lot of cloudy days as well.

North Dakota state government officials only authorized its inaugural commercial solar power generation project in 2019.¹⁵ The project is projected to produce over 200 MW, or more, of solar energy every year.

200 MW is enough power output to provide electricity to more than 40,000 households.

North Dakota state officials may legislatively authorize similar commercial solar power projects in the near future. The state may also cautiously expand its solar power generation capabilities by 685 MW before 2030.¹⁶

The point is that even though it may take a while, solar energy will become a viable energy source in North Dakota sometime in the future. So, invest in solar panel energy systems and take advantage of ND solar incentives now while you can be amongst the first to do so.

ND Solar Incentives: North Dakota Solar/Wind Easements and Laws

A point that will be continually stressed in this comprehensive North Dakota solar energy and tax incentive guide is that the state government may embrace renewable energy much later than sooner, but it will happen.

North Dakota recently ratified laws called the North Dakota Solar/Wind Easements Laws that attest to this fact.¹⁷

An easement is a legal term that stipulates that a state or local government decree allows homeowners and property owners the right to unobstructed sunshine access to power residential solar panel energy systems.

These laws guarantee that North Dakotan residents and homeowners have a legal right to own solar panel energy systems and unblocked access to sunlight to power them. Additionally, no homeowners’ association, landlord, rent manager, or neighbor in North Dakota can obstruct you from installing solar panel modules and equipment on your property.

In other words, any North Dakota resident who desires access to solar power is now legally empowered to do so. This is a significant law in a state that is technically 50th or 51st when it comes to solar power generation.

North Dakota is essentially a 100% fossil fuel energy state right now. But even the state government is actively preparing for a future when its residents can take full environmental and financial advantage of solar energy.

If you are a North Dakota resident, shouldn’t you do the same? The future of ND solar incentives is on the way in North Dakota, even if it won’t arrive tomorrow.

Average Number of Sunny Days in North Dakota

Even though Montana is officially the Big Sky Country state, North Dakota residents also have maximum access to unobstructed sky and sunlight.

North Dakota has one of the lowest tree populations in the country.

The North Dakota Game and Fish website states that less than 1% of North Dakota’s landscape is forested.¹⁸ Over 55% of the trees and forests in North Dakota are located in one region, the Killdeer Mountains.

Some more optimistic estimate state that the state’s landscape is over 3% forested. ¹⁹ The state’s climate is arid and it experiences less than 20 inches of rain annually.

The state’s parks department planted over 216 trees in 2022, which is only a negligible increase to the state’s existing forest population.

North Dakota experiences about 201+ days of sunny weather annually. So, unless you live near trees, buildings, or structures that can obstruct sunlight, a solar panel energy system will always have access to sunlight.

In a state with a nascent solar panel industry, these low-forest population landscape aspects can be a good thing when it comes to solar energy collection.

Solar panels should be installed by contractors with exacting experience and referrals. In order to absorb the maximum amount of sunlight energy, solar panels must be optimally angled whenever facing unobstructed sunlight.²⁰

A good solar panel contractor will install panels in North Dakota, which has a sparse tree population, to collect as much solar energy as possible via maximum sunlight exposure.

It should also be noted that North Dakota experiences frigid winters, especially in January. The state experiences temperatures below zero degrees over 55+ days annually.

If you invest in a solar panel energy system, which can also include batteries to store that energy, then you will never lack for energy during the frigidly cold months.

Solar Panels North Dakota: Carbon Footprint Reduction

When it comes to residential solar panel cost ND investment, reduction of cost can refer to environmental consequences, not just financial costs.

Carbon emissions being absorbed into the environment from corporate and individual sources, and especially from the burning of fossil fuels for the past two centuries, are accelerating and worsening global climate change.

Since North Dakota is a fossil fuel industry state, it can stand a lot to help its own environment by embracing renewable energy now.

North Dakota is the second worst carbon footprint offender in the United States.²¹ The state collective generates a carbon footprint of over 72 metric tons of carbon dioxide per capita annually.

North Dakota is only surpassed by Wyoming, which generates an annual carbon footprint of over 104 metric tons of carbon dioxide annually.

So, what is the problem with large carbon footprints? Too much carbon dioxide in the atmosphere and environment traps the heat from sunlight in the atmosphere, which steadily causes climate change and hotter temperatures.

Worsening carbon footprints creates acid rain, which is toxic to the environment, air pollution, and melts glaciers at the polar caps. Large carbon footprints also cause ocean acidification, as the ocean unnaturally absorbs more human-generated carbon dioxide, it becomes more acidic, a more toxic environment for fish and aquatic life, and destroys oxygen in the water.²²

The environment can naturally recycle carbon dioxide in the environment and atmosphere through a process called carbon sequestration. Soil, trees, and shrubs can absorb carbon dioxide for decades or centuries and then slowly re-release it into the environment in natural cycles.

However, this natural cycle becomes overwhelming and non-effective as human beings progressively burn more fossil fuels and increase their carbon footprints annually.

Because North Dakota is 100% a fossil fuel energy state, it might suffer dire climate change consequences within the next 30 years.²³

North Dakota, which still aggressively burns fossil fuels, is at increased threat for hotter weather phenomena and fire threats by 2050. And since the state barely gets 20 inches of rain annually, it could also become more susceptible to droughts by 2050 as well.

Become one of the first North Dakota homeowner residents to invest in solar panel energy systems, enjoy solar tax incentives, and help save the environment from climate change.

Are carbon footprint solar panels a lot? Solar panels don’t leave a carbon footprint, however, the manufacturing, mining and disposal process does…a pretty large one at this point.

But, by taking advantage of North Dakota solar incentives to lower the cost of solar panels in North Dakota, you can lower your household carbon emissions and your energy costs.

Frequently Asked Questions About North Dakota Solar Incentives