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 has a total energy consumption per capita of 85 million BTUs for residences.
North Dakota Solar Tax and Incentives at a Glance
|North Dakota Solar Incentive||Federal or State||Program Overview|
|Federal Solar Tax Credit||Federal||Taxpayers are given a 30% tax credit that helps offset the total cost of their solar energy system. The scope of the credit extends to installations, equipment, and the cost of solar panels.|
|North Dakota Renewable Energy property tax exemption||State||With the tax exemption cost, locally-assessed renewable energy sources are exempted from property taxes. Applications are submitted to the local tax assessor. The tax exemption can only be claimed within five years after installation.|
|Northern Plains Commercial Energy Efficiency Program||State||Northern Plains offers energy loans to east-central North Dakota members. The incentive is a low-interest loan with favorable repayment time.|
|Residential Energy Efficiency Rebate||State||Bright Energy sponsors cash incentives for energy-efficient appliances. The scope of the incentive covers heating and cooling systems, dryers, humidifiers, and washers. The appliances must be Energy Star Certified.|
|North Dakota Net Metering Policy||State||Homeowners get credit for the excess energy they generate from a solar energy system. Under this arrangement, the amount of solar energy customers generate also offsets their monthly energy bills.|
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.
|State||Number of Solar Installations||MW Installed||Average Cost for Grid Power||Average Cost per Watt|
|North Dakota||42||2||9.32per Kilowatt per hour||$2.42|
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.
|State||Cost of Installing a 6KW System||Federal Tax Credit Value 2023 (30%)|
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.
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.
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.
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:
To claim the Federal Solar Tax Credit in North Dakota, you must:
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.
All 100KW solar energy systems are eligible for a net metering arrangement 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.
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.
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 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.
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.
Aside from the general criteria, the following are important to be eligible for the Northern Plains Renewable energy incentive:
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:
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.
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.