Solar Power in North Dakota: All You Need to Know

North Dakota Solar Power: Check Your Savings, Costs, Tax Breaks, Incentives and Rebates

a solar investment in North Dakota is a good idea because the state receives a good amount of sunlight throughout the yearNorth Dakota receives a decent amount of sunlight throughout the year, reaching values above five daily peak sun-hours, especially to the southwest of the state. Bismarck, the state capital, receives a yearly average of 4.5 peak sun-hours per day, and more than six peak sun-hours per day during the months of June and July.

All of this sunlight can be converted into cash savings if you install a solar PV system on your North Dakota home.

Keep in mind these are average solar radiation values for North Dakota: every home has unique site conditions. You can contact a trusted solar contractor near you for a detailed site assessment.

The main incentives for North Dakota homeowners who go solar are a favorable net metering policy and a five-year property tax exemption on the increase in home value.

On top of that, the 30% federal tax credit makes sure you get back nearly one third of your investment in less than a year.

Return on Investment for Residential Solar Power in North Dakota

The ideal size of a residential photo-voltaic system greatly depends on monthly energy consumption and the available rooftop area that is suitable for solar panels.

However, many residential PV systems are around the five-kilowatt mark, so we will consider that system size to present a financial analysis of a solar PV system in North Dakota.

The costs and savings for a 5-kW PV system in North Dakota can be broken down as follows:

- The initial investment before deducting incentives of any type is around $20,000.

- However, 30% of that value comes back to you as a federal tax credit within one year, subtracting $6,000 from your net outlay and bringing down the upfront cost to $14,000.

- You can expect to save around $650 during the first year of PV system ownership, bringing the net cash flow out of your pocket to around $13,350.

- Yearly savings will get progressively higher thanks to energy price inflation, and you will get back your investment in around 17 years.

- Considering that solar PV systems typically have a 25-year warranty, you are assured to get eight years of free energy!

- Over that 25-year period, you will make a net profit of around $12,000.

- Your property will also be worth an extra $13,000… and you will not be taxed for it during five years. meaning solar will increase the value of your home, and give you a tax exemption.

- Your investment will also benefit the environment: your 5-kW PV system will have the same impact as planting 120 trees per year.

With electricity rates of around $0.10 per kilowatt-hour, North Dakota is one of the states with the cheapest energy in the USA. However, this could soon change: the local power grid gets a considerable portion of its energy from power plants fired by fossil fuels.

With all the discussions about clean power going on around the world, governments are committing to reduce their carbon footprints. It is possible that tougher regulations for fossil fuels will be placed over the next years, and when that happens energy prices can be expected to rise.

Thankfully, that only means more savings for homeowners who have the foresight to go solar before energy gets more expensive.

Keep in mind that the financial breakdown presented in this article is for a 5-kilowatt system, assuming average sunlight availability in North Dakota. Every project is unique, and no two PV systems will have the same exact performance due to site-specific differences.

In general, the best sites for solar power in North Dakota are those offering the following conditions:

- A location to the southwest, where the solar radiation rates are higher.

- Having a rooftop with a large area facing south, since most sunlight comes from the southern portion of the sky in the northern hemisphere.

- Being free from obstacles blocking a significant portion of the incident sunlight: shades are very detrimental for PV system performance!

Keep in mind that these conditions are not mandatory, they just represent the optimal scenario. You can still save a lot of cash with solar power even if your home is not a perfect match for the criteria above.

Would you like to know the exact sunlight availability at your location? Then, we recommend you check out the NASA Atmospheric Science Data Center website.

If you input your coordinates, the site will provide you with a wealth of meteorological information for your exact location. The site even breaks down the sunlight availability by month and by solar panel tilt angle and makes it easier to calculate how much your solar system will cost.

You can talk to one of our trusted solar contractors in North Dakota to get a detailed solar power analysis of your property and a photo-voltaic system quote.

North Dakota Solar Power Incentives, Tax Breaks and Rebates

There are no state-specific tax credits in North DakotaThe main incentives for going solar in North Dakota are the five-year property tax exemption and a net metering policy that requires private utilities to pay you in cash for any surplus kilowatt-hour production. The 30% investment tax credit from the federal government complements the local incentives.

North Dakota has a Renewable Portfolio Standard requiring utilities to source 10% of their energy from renewable sources, but compliance is voluntary. Also, although PV systems have a five-year property tax exemption, they are not exempt from the sales tax.

North Dakota RPS

There is a tendency that repeats itself across the board: utilities are not likely to push forward renewable sources by themselves, so having a voluntary Renewable Portfolio Standard is like not having it at all.

A mandatory RPS, on the other hand, would drive utilities to offer rebates and performance payments for residential PV systems.

North Dakota Tax Credit

There are no state-specific tax credits in North Dakota, but the 30% federal tax credit is by itself a considerable incentive. If you are not taxed high enough to apply the full tax deduction in one tax declaration, don’t worry: you are allowed to split it among two consecutive years.

The 30% ITC is particularly useful if you purchase the PV system through a loan, because you can basically start paying the loan with the money that would have otherwise been paid in taxes.

There is only one catch: the 30% tax credit is set to expire in 2020, when it will be reduced to a more modest 10%. If you are planning to equip your home in North Dakota with solar panels, we recommend you do so before 2020!


North Dakota Electricity Rates

At $0.10 per kilowatt-hour, electricity prices in North Dakota are among the lowest in the USA. However, most of this energy comes from fossil fuels, so it is not cheap in terms of environmental impact!

As more regulations for high-carbon energy come into play, electricity rates in North Dakota will start to rise.

Cheap electricity translates into a longer payback period for photo-voltaic systems, but there is still a lot of money to save by going solar: expect to achieve net savings of around $12,000 over 25 years, which is the time period typically covered by solar panel warranties. For information about solar panel reviews click here


Is There Net Metering in North Dakota?

The net metering policy in North Dakota has its pros and cons:

The positive side is that all private utilities are required to offer net metering, and they must pay you back in cash if your PV system produces surplus energy.

However, cash payments for surplus energy are calculated based on the production cost of utility companies, not the full retail price. Also, net metering is only mandatory for private utilities, not cooperatives and municipal utilities.

There is also a 100-kilowatt cap on net-metered PV systems, but that is only a limitation for businesses. 100 kW is way larger than what any home would need, even if it’s a huge mansion.

Unfortunately, there is no standard interconnection policy in North Dakota, which means each utility sets its own rules.

]Make sure your residential PV system is properly sized and interconnected by hiring a trusted and experienced contractor. Our experts can get you in touch with the best solar power installers in North Dakota.


Are There $0 Down Payment Financing Options in North Dakota?

The only feasible option for going solar with $0 down in North Dakota, also known as the solar power payment plan, is to take a low-interest HELOC (Home Equity Line of Credit). Without a legal framework for third-party ownership of PV systems, there are no solar leases and power purchase agreements available in the state.


Solar Loan

Taking a solar loan is a financial strategy that sacrifices some of the lifetime savings of a PV system in order to acquire it for $0 down. This allows you to use tax deductions and energy savings to cover the loan payments partially or completely.

The basic procedure for going solar through a loan is the following:

- You get a loan on your home equity, which typically has an interest rate of around 5% and a term of 10 to 15 years.

- You purchase the solar PV system with the loaned money, claim your 30% tax credit, and then start paying the loan with money that would have otherwise been paid in taxes.

- Your PV system will also start saving money, which further contributes to cover loan payments.

You will still have to pay some cash from your pocket to fully cover the loan, but it is more manageable than paying the full price of the PV system upfront. Over a 25-year period, you can expect around $3,500 in net savings.


Cash Purchase VS Loan: What’s Best for North Dakota Homeowners?

Purchasing a solar system in North Dakota is the recommended routeLike in most financial decisions, each of the options to purchase a PV system in North Dakota has its advantages and drawbacks.

Your cash availability and home equity owned are key factors, as well as your priority: maximizing total savings or going solar at the lowest possible cost?

Purchasing a PV system in North Dakota in cash

Purchasing a PV system in North Dakota in cash is recommended if you have the cash availability and wish to maximize the total savings from your PV system. You can expect to save around $12,000 over 25 years if you go for this option.

Purchasing a PV system in North Dakota through a loan

Purchasing a PV system in North Dakota through a loan is recommended if you have a lot of equity in your home and wish to minimize your upfront expenses.

With this option, you can install the PV system for $0 down and will save around $3,500 over 25 years


What is the Solar Power Installation Process in North Dakota?

With no standard interconnection policy, the rules for plugging a PV system to the power grid in North Dakota vary by electric utility company. Our best recommendation is that you hire an experienced and trustworthy solar contractor, and the interconnection process will go by with minimal complications.

If you have already taken the decision to equip your home in North Dakota with a PV system, the process is very simple and you can start today:

1. Fill our solar installation form, providing basic information on your property.

2. Talk with trusted solar contractors near you to get accurate quotes.

3. Compare quotes (we recommend you get at least three) and choose the best option for you.

4. Have your contractor install the PV system, and enjoy clean power while helping the planet.

The installation is quick and free from hassle: it only takes from three to four days after you sign the agreement and close the deal with your contractor of choice.

Keep in mind that the analysis and project financials presented in this article are for a 5-kilowatt PV system, assuming the average sunlight conditions for North Dakota.

You will know the exact installation cost and expected project performance once you get a proposal from a trusted contractor near you.


Conclusionincentives for installing a solar panel system in North Dakota include a 5 year property tax exemption and a good net metering policy

The main incentives for installing a residential PV system in North Dakota are the five-year property tax exemption and the favorable net metering policy.

On top of that, remember that the 30% federal tax credit benefits any solar PV system that is installed anywhere in the USA.

The outlook would be better if North Dakota introduced a mandatory RPS, which would likely result in rebates and performance payments from the local utilities.

It is also possible to lighten the tax burden for solar PV systems even more by making the property tax exemption permanent, and also eliminating the sales tax.

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