REGIONAL- Minnesota has about $1.5 million still available to help homeowners and businesses outside Xcel Energy territory add battery storage to their onsite solar systems.
The Minnesota Department of Commerce is encouraging solar users to take advantage of its incentive program, which pays $250 for each kilowatt-hour of battery capacity installed, up to a maximum of $7,000 per property.
Less than a year remains in the three-year program, with funds awarded on a first-come, first-served basis. They will remain available until the money is exhausted or June 30, 2027, whichever comes first.
The program is available throughout the North Country, including to customers of Minnesota Power and area electric cooperatives, and participating solar and battery systems must be connected to the electric grid. Off-grid solar systems do not qualify.
Battery storage collects electricity produced by solar panels and saves it for later use, such as after sunset or during a power outage. That can keep essential equipment operating when utility power goes out. How long the battery can provide backup power depends on its capacity and how much electricity the property is using.
The Department of Commerce also says battery storage can reduce electricity bills, although the financial benefit varies considerably by utility and rate structure. Customers paying higher rates during peak-use periods may be able to charge a battery when electricity costs less and draw from it when rates are higher. Some utilities also offer payments or other incentives to customers who allow stored electricity to help support the grid during times of high demand.
For customers paying the same rate throughout the day, however, the direct savings may be much smaller. Commerce recommends that prospective applicants contact their utility to ask about battery programs, additional rebates, rate discounts, and interconnection requirements.
To qualify for the state-administered program, a home or business must be located in Minnesota outside Xcel’s electric service territory. The property must have an onsite solar-energy system or an active application with its utility to interconnect one. A subscription to a community solar garden does not qualify.
The battery must be new, installed on or after Aug. 1, 2024, and have a capacity of no more than 50 kilowatt-hours. It also must be permanently installed, connected to the electric grid, and meet applicable warranty, building, electrical, and fire-code requirements. Incentives are limited to one per property address.
The $7,000 maximum grant can make a meaningful dent in the cost, but Commerce cautions that battery storage remains a major investment. The department estimates installations commonly cost between $15,000 and $25,000, depending on the battery’s capacity and the work required at the property.
A 10-kilowatt-hour battery would qualify for a $2,500 incentive, while a 20-kilowatt-hour system would receive $5,000. A qualifying battery with at least 28 kilowatt-hours of capacity would reach the $7,000 maximum.
Even with that assistance, the remaining cost can be substantial. Electrical-panel upgrades, permits, fire-code work, and utility interconnection expenses may add to the price.
Application instructions on the Commerce website at mn.gov/commerce. Questions may be sent to storageincentive.comm@state.mn.us.