North Dakota Solar Rebates and Incentives

How Much Can You Save on Solar in North Dakota?

North Dakota receives more hours of sunlight daily than any state bordered by Canada. According to data from the Solar Energy Industry Association, the state generates up to 2 megawatt of solar electricity spread across 42 installations as of 2022. However, solar power generation in the state is projected to rise to over 500 MW by 2027.

North Dakota Solar Tax and Incentives at a Glance

How Affordable is Electricity in North Dakota

Grid electricity in North Dakota costs about 8.65 cents per kilowatt hour. Also, the average cost of solar panels per watt is $2.42 in North Dakota.

At $2.42 per watt, the average cost of a 6Kw solar panel in North Dakota is $14,520. With the Federal Solar Tax Credit, homeowners can save about $4,356 on a 6KW Solar panel. That translates to saving $0.72 per watt for Solar panel installation. However, apart from the Federal Tax credit, there are other North Dakota tax credits for solar panels.

According to the EIA, North Dakota has a total energy consumption per capita of 85 million British Thermal units for residences. Commercial consumption per capita, on the other hand, commercial consumption per capita is estimated to be 108.8 million British Thermal Units.

In total, the energy consumption per capita of the state is 130.4 million BTU. With solar energy gaining relevance in the state, there are some North Dakota renewable energy rebates for homeowners who adopt it. Here is a breakdown of some of the rebates.

Federal Solar Tax Credit in North Dakota

The Federal Solar Tax Credit is a renewable energy tax credit available to residences and commercial entities with solar energy systems in North Dakota. Taxpayers who install a solar energy system before 2034 are entitled to a 30% tax credit. This credit amount allows taxpayers to offset the cost of purchase and installation. There are no explicitly stated limits to the amount a taxpayer can get in tax credit.

Originally, the solar tax credit was set to expire in 2022. It was first introduced in 2005 and extended in August 2022. Alongside the deadline extension, US congress altered the credit conditions slightly.

For instance, solar energy systems installed between 2020-2021 can claim a 26% Federal tax Credit. According to the new adjustments, taxpayers can claim a 30% tax credit on systems installed between 2022-2032.

In 2033, the percentage drops to 26% and 22% in 2034. Furthermore, the tax credit expires in 2035, according to the adjusted legislation.

Eligibility

To claim the Federal Solar Tax Credit in North Dakota, applicants must:

• Have Enough Tax Credit: Homeowners are only limited by their Federal taxable income. The amount you can claim in tax credit cannot exceed your tax income annually. However, you can leave the credit to accumulate for four years.

• Have installed your panel between 2018 and 2034: As established earlier, the legislation has set a deadline of 2035. To benefit from this renewable energy tax credit , you must have completely installed your system by 2034. Also, with the 4-year accumulation period, homeowners who have installed their systems by 2018 can claim the credit.

• Own a PhotoVoltaic System: The Tax Credit only applies to legal owners of a photovoltaic system. Regardless of the conditions of ownership, you can claim the credit as much as it is legally binding.

• Own a System that meets the Required Safety Standard: Your solar energy system must be safe by the North Dakota Public Utilities Commission standards.

What Expenses Does the Federal Solar Tax Credit Cover?

The Federal Tax Credit covers all of the cost of a Solar energy system, from credit to installation. That is, homeowners can claim the credit on the following:

• The Cost of the Solar Panel or Photovoltaic System: The tax credit covers all systems that convert solar energy to electricity.
• Cost of Equipment: The credit covers all equipment used to install the energy system. These include mounting equipment, wires, and meters.
• Cost of Installation: Homeowners can also claim the tax credit on the total fee charged by an installation company or professional.

How do I Claim the Federal Solar Tax Credit in North Dakota?

To claim the Federal Solar Tax Credit in North Dakota, you must:

• Confirm your Eligibility: To claim the Solar Tax Credit, you must be eligible by the criteria above.
• Prepare the necessary documents: To verify the credit amount you are entitled to, you must present some documents. Some of this may include receipts of installation, equipment invoices, and the energy bill.
• Fill out the Internal Revenue Service Forms: You must fill out form 5695 and form 1040 to be eligible for the tax credit. These forms are important to estimate your income tax return and the amount you are eligible for. For clarity, the 5695 form is otherwise called the Residential Energy Credit form, while the 1040 form is the income tax credit form.

Net Energy Metering in North Dakota

In North Dakota, investor-owned utility companies are legislated to offer net metering options to power consumers. However, electric cooperatives and municipal utility establishments are excluded from the net metering policy.

With the arrangement, IOUs are to cut the cost of electricity to all homeowners who generate their own power. The arrangements allow the surplus power from homes to be returned to the distribution grid.

This policy significantly reduces the energy bill allotted to the home in question. When a building generates excess energy, it flows back to the grid and is sold, but not at the retail rate. The amount is credited to the generator and deducted from energy bills in subsequent months.

How to Enroll for Net Energy metering in North Dakota

Here is a breakdown of the enrollment process for Net Metering in North Dakota:

• Step 1. Contact a Utility Company: State laws allow utilities to determine the conditions for metering. Your utility company will provide details about its net metering program. You also need to be exhaustive in your inquiry; ask about the documents, application, criteria, and credit rate.

• Step 2. Make sure you are eligible: First, your solar energy system must meet the minimum regulatory requirements. Also, make sure you are eligible by the standards of your utility company. This may include generation capacity, interconnection plan, and meter conditions.

• Step 3. Submit Your Application: If you meet the eligibility criteria, fill and submit your form to the utility company. Depending on the company, you may need to fill in different types of property information. Common fields include your address, household energy profile, and the details about your energy system.

• Step 4. Begin Net Metering: Once your application is approved, your utility company arranges interconnection, and you can begin metering. The Utility company will provide any other detail and requirement specific to its metering program.

North Dakota Property Tax Exemption

In 2007, North Dakota introduced a policy that exempts renewable energy sources from taxes. According to the legislation, home and business owners can exempt taxes charged on solar energy systems from their annual tax bills. Ideally, solar energy systems can increase property tax exponentially.

However, this tax exemption makes it possible to install renewable energy systems without unbearable economic consequences. The exemption applies to both standalone solar panels and energy systems.

North Dakota's property tax exemption only applies to a five-year period after the solar energy system's installation. Upon immediate application, the exemption can become active a year after installation. The local county assessor’s office accepts applications for tax exemption requests.

The office provides all the information about the exemption, including the criteria and a list of necessary documents. The assessor’s office also determines your eligibility by accessing your tax conditions, among other criteria.

Eligibility For the North Dakota Tax Renewable Energy Tax Exemption

To be eligible for the State’s renewable energy tax exemption, you must:

• Own a Solar Energy System: Only legal owners of renewable energy solar systems are eligible for the tax exemption. This extends to energy systems that are leased or purchased. The most important thing is to possess the document of ownership.

• Meet the minimum energy capacity: Your energy system must be at least 1 Kilowatt to qualify for a tax extension. The extension is available to systems up to 100 Kilowatts.

• Generate your own electricity: The tax exemption applies to solar energy systems that generate electricity solely for the owner. By implication, tax exemption does not apply to metered systems or utility companies. Systems built for power sale are not exempted.

• Own a System that Meets the State regulatory requirements: Your energy system must be certified safe by the North Dakota public utility commission. Depending on where you live, you may also need certification from local and zoning authorities.

Bright Energy Solutions Residential Energy Efficiency Rebate

Bright Energy Solutions offers cash as part of the renewable energy incentives in North Dakota. The solar energy incentive is part of a renewable energy incentive that covers wind, geothermal, and biomass sources.

This incentive is only available to customers of 5 municipal utility companies in North Dakota. These companies include Cavalier Municipal, Utilities Northwood Municipal Utilities, Hillsboro Municipal Utilities, Valley City Public Works, and Lakota Municipal Light Plant.

This cash incentive applies to energy-efficient appliances rather than solar energy systems. The scope of the rebate covers refrigerators, dehumidifiers, Ceiling fans, room air conditioners, clothes washers, decorative light strings, heating and cooling systems, and dishwashers. Applications are made on the Bright Solutions Website.

Homeowners can also apply at the different locations of eligible utility companies. To be eligible for this rebate, you must be connected to any of the utility companies. Also, the appliances you apply with must be certified by Energy Star. Energy star is a program designed to help energy users save money and attain energy efficiency.

The rebate value is dependent on the appliance you are applying with. For instance, a solar-powered cloth dryer attracts a $25 rebate amount. You can find about the respective rebate amounts here.

Northern Plains Commercial Energy Efficiency Program

The Northern Plains is an electric cooperative that offers renewable energy incentives in North Dakota. The solar energy rebate is part of a larger energy efficiency scheme. This scheme is specific to the east-central area of North Dakota. The Northern plains award loans to households and commercial establishments to build energy-efficient projects. The loans are awarded on a 2% interest basis, regardless of the project's scope. Beneficiaries are required to pay in affordable amounts monthly for a period of up to 10 years.

The loan applies to all commercial organizations, including agricultural, non-profit, industrial, businesses, and government establishments. This loan is awarded monthly and only covers the cost starting when the application is received. The minimum loanable amount is $10,000 as of 2023.

Eligibility

Aside from the general criteria, the following are important to be eligible for the Northern Plains Renewable energy incentive:

• Documented of Expected Expenditure: Applicants must submit a document that highlights their expenditure for the next annum after getting the loan. The document is necessary to measure project worth and accountability.
• A Data Universal Numbering System: Applicants are expected to obtain a Duns and Bradstreet Data universal numbering system before application.
• A Credit Letter: Applicants are also expected to submit a letter of credit alongside their applications. This applies especially to commercial establishments and Non-profit organizations. The letter of credit should be obtained from trusted banking institutions in the state.
• Proof of Geographical location: The loan is limited to the outer boundaries of the Northern plains. Applicants must be within this space to qualify for the loan. However, applicants do not have to use the services of Northern Plains electric to be eligible for the loan.

How to Find The Best Solar Companies in North Dakota

According to the United States Office of Energy Efficiency and Renewable Energy, professionals best install solar energy systems. However, it may be herculean to find any professional in North Dakota.

As of 2022, the Solar Energy Industries Association recorded that the state has just one solar manufacturer. It also recorded that the state had about five solar companies in total and one installer.

While the few companies in the State are options, homeowners can also explore neighboring states. For instance, there is South Dakota, to the south, with a better solar profile. Minnesota to the North also has one of the best Solar profiles in the United States. Among all US states, Minnesota ranks 16th on the solar energy sophistication scale.

With the steps below, you are better positioned to get the best Solar companies in the US, close to North Dakota:

• Solar Energy Market Places: You can start by checking online for the best solar energy companies in North Dakota and neighboring states. Solar energy marketplaces help you streamline your search. Depending on which marketplace you use, you may be asked to specify your address, Zip code, and mobile number.
• Ask for Referral: As of 2021, there are about 262 solar jobs, and 42 installations are in North Dakota. With this number, you may likely get ideal solar installation companies by simply asking around.
• Create a Short List: You can further streamline your options by reading reviews online. You can get reviews from applications, solar marketplaces, solar forums, and websites of solar energy companies. These reviews will show you how ideal the company is for you.
• Check Certifications: You should check for the industry affiliation and certifications possessed by companies or installers on your shortlist. For installers and solar energy companies in North Dakota, see if they are affiliated with the North Dakota Public Utilities commission. Also, check if they are certified safe by Federal solar regulatory bodies. In Minnesota, you can check out the Department of Labour and Industry certifications. You may also check if the installers or companies are licensed by the North American Board of Certified Energy Practitioners (NABCEP).
• Get Multiple Quotations: You should get quotations from the top three to five companies on your list. These quotations give you insight into the price. They may also inform you about the company's level of attention to detail and expertise.
• Check for Level of Experience: You can measure a company’s average experience level by checking their years in service and their workload. This may give you an insight into how well they have worked and how much they are trusted.

Other secondary criteria may include incentives and proximity. It would be better to opt for companies nearer to you to cut costs. You may also want to take advantage of solar rebates and other incentives. These should, in no circumstances, take precedence over certifications and experience.

State Profile

North Dakota is a state in the upper midwestern part of the United States. It is the 19th largest by size and the 4th least populated state in the United States. As of 2021, the country was estimated to have 779 261 people.

Also, in 2021, the total number of housing units in the state was estimated to be 374,447. The percentage rate of owner-occupied housing units between 2017-2021 is 63%. This rate falls below the United States average of about 65.8%.

63.5% of the people in North Dakota own houses. Furthermore, the median value of owner-housing units between 2017 to 2021 was estimated to be $209,900. 3,600 new housing permits were issued, and the median rent payment was estimated at $853. One house in North Dakota was estimated to have an average of 2.37 people. With a Mortgage, the median selected owner’s cost stood at $1,524. Without a Mortgage, the value was estimated to be $506. The number of people – more than a year old – that lived in the same house as they did a year before was estimated to be 83%.

Renewable Energy in North Dakota

North Dakota generates about 30% of its energy from renewable sources. The major source of renewable energy in North Dakota is the wind. It accounts for about 23% of energy in the state. The generation capacity of wind stations doubled remarkably between 2015 and 2021.

North Dakota’s wind resources are located along offshore sites such as the Missouri river and Williston, among other places.

Hydroelectric power comes next with about 7% of the State’s total renewable energy. The state has both Wind and Hydroelectric power plants in offshore locations. The largest wind farm, with a capacity of about 300 Megawatts, was commissioned in 2021.