North Dakota Solar Incentive Programs

12 yr
Avg. payback
$900/yr
Avg. annual savings
None
State tax credit
avoided cost
Net metering rate
Federal tax credit update: The 30% residential solar tax credit (Section 25D) ended for systems whose installation was completed after December 31, 2025, under Public Law 119-21. Systems whose installation was completed in 2025 can still claim it on a 2025 return. New 2026 installations do not qualify for homeowners who buy. What changed
North Dakota's export rates are among the nation's lowest, solar economics here depend almost entirely on the kWh you use yourself, not what you sell back to the grid.

Utility Net Metering Rates

Two investor-owned utilities serve most of North Dakota. Both offer net metering, but export compensation is well below retail, well below what you'd pay to buy power.

Xcel Energy (Northern States Power)
Eastern ND: Fargo, Grand Forks, Minot and surrounding areas
Residential rate (summer) ~8.55¢/kWh
Residential rate (non-summer) ~6.95¢/kWh
Recent rate increase (NDPSC approved) +12.92% residential
Net Energy Billing export rate 3.646¢/kWh (eff. March 1, 2026)
System cap 100 kW (qualifying facility)
Export vs. retail comparison Export well below retail

At 3.646¢/kWh for exports, well below the retail rate, maximizing self-consumption is critical. A kWh you use yourself saves more than one you export.

Sources: NDPSC Case PU-26-018 (Xcel 2026 rate sheets, Tier 1); utility-rates.com (verified 2026-06-05)

Montana-Dakota Utilities (MDU)
Western ND: Bismarck, Dickinson, Williston and surrounding areas
Residential average rate (ND) ~11 to 12¢/kWh (all-in with riders)
Net metering export rate (Rate 95) 3.416¢/kWh (eff. Jan. 1, 2026)
Service type Net billing (generation offsets consumption)
Contract requirement Minimum 1-year written agreement required
System cap 100 kW
Export vs. retail comparison Export well below retail

MDU's export rate of 3.416¢/kWh is well below what you pay to buy power. MDU customers need to right-size systems aggressively to self-consumption. Exports are essentially a last resort.

Sources: NDPSC Case PU-25-276 (MDU 2026 avoided cost update, Rate 95, Tier 1)

State Incentive Summary

North Dakota has one active state incentive for residential solar: the property tax exemption. Everything else is either unavailable or expired.

Incentive Status Notes
Property tax exemption (solar) Active, 5 years 100% exemption on solar-added value for 5 years; N.D. Cent. Code §57-02-08. Applies to residential PV.
State income tax credit None North Dakota offers no residential solar income tax credit
Sales tax exemption (residential solar) None ND sales tax (5%) applies to residential solar equipment and installation
Federal ITC (Section 25D) Expired Dec 31, 2025 No federal residential tax credit for systems whose installation was completed after Dec 31, 2025
Net metering Available (Xcel & MDU) Export rate at avoided cost (~3.416 to 3.646¢/kWh); self-consumption credited at full retail

What You Actually Get

Property Tax Exemption

Active

For 5 years after installation, the assessed value your solar adds to your home is fully exempt from property taxes. On a $20,000 system, this avoids approximately $300 to $600 in property tax over the exemption period, depending on local mill rates.

Net Metering (Self-Consumption)

Available

The real value in ND solar is avoiding retail purchases. Every kWh generated and used yourself saves 7 to 12¢. Every kWh exported earns 3.416 to 3.646¢. Size your system to maximize self-consumption and you get 2 to 4× more value per kWh.

No State Tax Credit

Not Available

North Dakota offers no state income tax credit for residential solar, and no sales tax exemption on equipment. Combined with the expired federal ITC, there is no upfront credit of any kind for a 2026 residential installation.

Sample Economics

7 kW system in North Dakota. Estimated annual production: ~8,400 kWh (ND gets solid sun despite its latitude).

7 kW System, North Dakota (MDU Customer Example)

Annual production (est.)8,400 kWh
Self-consumed (est. 80%)6,720 kWh × 11.5¢ avg = $773
Exported (est. 20% × MDU 3.416¢)1,680 kWh × 3.416¢ = $57
Annual total benefit$830
Property tax savings over 5 years (est.)~$450 total
System cost (~$20,000 + 5% ND sales tax)$21,000
Estimated simple payback~14 to 16 years

Estimates only. MDU residential all-in rate assumed at 11.5¢ average. Higher self-consumption improves payback significantly. No federal or state tax credits available in 2026.

Making Solar Work in North Dakota

The Self-Consumption Imperative

With export rates at 3.416 to 3.646¢/kWh and retail rates at 7 to 12¢, every exported kWh is a missed opportunity worth 2 to 4× more if used in-home. ND homeowners should: (1) install only enough capacity to cover their annual load, (2) shift daytime loads (EV charging, dishwasher, laundry) to solar production hours, and (3) seriously evaluate battery storage if their usage is heavily evening/night-weighted.

Claim the Property Tax Exemption

The 5-year 100% exemption under NDCC §57-02-08 is automatic in most counties, but confirm with your county assessor that solar added value is being excluded from your assessed value after installation. Request documentation from your installer noting installation date and system value for the assessor's records.

Get quotes from North Dakota solar installers

Local installers know the North Dakota incentive landscape. Compare quotes and see exactly what you'd save with a system sized for your home.