Solar Panel Laws in North Dakota

One of the best things about living in North Dakota is the warm sunlight on your skin. Since the state is generally sunny, it is the perfect candidate for solar panels. Residents can expect to benefit from at least 5 hours of sun each day. Read on as we dive into everything you need to know about the solar panel laws in North Dakota.

Residents can easily convert the sun into cash with solar panel systems. The main motive for installing solar in North Dakota is the state policies in place. Owners can easily benefit from tax exemptions and net metering.

Additionally, they’ll also be able to receive up to a third of the initial venture investment in just one year.

Key Takeaways

• North Dakota’s sunny climate makes it an ideal location for solar panels, allowing residents to benefit from tax exemptions and net metering, potentially receiving up to a third of the initial investment in one year.
• The main solar power incentives in North Dakota include the 30% federal tax credit, net metering policies, and tax exemptions. At the same time, electricity rates are relatively low at $0.10 per kW/h, though generated primarily from fossil fuels.
• Financing options in North Dakota include low-interest home equity lines of credit for $0 down solar panel purchases and solar loans that allow users to claim tax credits and use energy savings to pay off the loan, ultimately saving up to $3,500 over 25 years.

Return on Residential Solar Power Investments

To determine the size of a system, homeowners must first determine the electricity or energy used each month and the suitable area on their roof. For the most part, most residents tend to house a 5 kW system. As such, the savings for these systems are as follows:

• The initial investment is $20,000. However, you can expect to receive at least 30% in federal tax credits. This is achieved in just one year, and $6000 can be deducted from the investment cost.
• Within the first year, you’ll be able to save $650 easily. This sums the net cash to $13,350.
• While the yearly savings can increase, you will receive the total in just 17 years.
• Since systems usually have a 25-year warranty, you can enjoy several years free.
• In the mentioned 25-year period, you’ll generate a profit of $12,000.
• With the addition of the system, you’ll easily increase your home’s value by $13,000.

Solar Power Incentives, Tax Breaks, and Rebates

At this point, no tax credits apply to the state. The main incentive is simply the net metering policy and the tax exemption. These ensure that privately owned utilities offer residents some cash for their extra production. As a result, all parties have agreed on a 30% investment tax.

Unlike other places, North Dakota has a special policy to ensure that all utilities source up to 10% from renewable sources. While these systems can legally benefit from the five-year tax exemption, they are not exempted from sales taxes.

Tax Credit in North Dakota

The main incentive in North Dakota is the 30% federal taxes since there aren’t any tax credits. However, even if you do not make the deduction this year, you can easily wait for another year, and then you’ll be able to split it. If you’re considering purchasing the system via a loan, the ITC is beneficial.

Electricity Rates in North Dakota

The electricity prices in North Dakota are relatively low at just $0.10 per kW/h. While most energy is generated from fossil fuels, this negatively impacts the environment. Due to this, more and more regulations are being passed.

If you didn’t already know, cheaper electricity means it will take longer to compensate for the system. However, there is still a lot of money that can be saved.

Net Metering in North Dakota

The state does offer net metering policies for its residents. However, there are some pros and cons to this. A considerable advantage is that private entities must ensure that clients receive net metering. These companies are responsible for paying their clients if they produce excess unused energy.

If cash is being paid, it is calculated depending on the company rather than the energy price. Additionally, net metering is required to be provided by all private utility companies. As far as systems are concerned, the cap is on 100kW systems and only applies to businesses.

What Are the Financing Options in North Dakota?

One of the only possible ways to achieve $0 is to apply for a low-interest home equity line of credit. This creates a means for homeowners to purchase systems without needing third-party ownership. Hence, solar power leases and state purchasing agreements are available.

Can a Solar Loan Help?

If you didn’t already know, a solar loan is an excellent way of saving some extra cash. This offers users the opportunity to purchase the system for $0 down. To access this, energy savings and tax deductions cover the entire payment or parts, depending on the situation.

If you’re thinking of signing up for a loan, the following is the most basic procedure that you’ll need to follow:

• Loans are taken based on the current equity value of a property and tend to have a rate of 5% for a max of 15 years.
• You can purchase the system and claim the tax credit when the money is handed over to you. However, its strategy is to pay for the load with the tax credits.
• Since a significant amount is saved from the solar panel system, the savings can be put towards paying off the loan.

Even though the loan is being paid, you’ll still need to dip into your funds to ensure that you cover the loan. This is one of the easiest ways to purchase your solar system, and you’ll save up to $3,500 in 25 years.

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Conclusion

As we conclude, we have just looked at the solar panel laws in North Dakota. So, if you’re interested in purchasing a solar panel system, there’s no better time to do so than now. Quite a few incentives make the idea seem even more attractive!

Map image by Wikimedia Commons User: TUBS / CC-BY-SA-3.0