Is Solar Worth It in North Dakota in 2026?
North Dakota sits at 47.4°N — closer to the Canadian border than to Kansas — and its electricity is cheap by national standards: about 11.8 cents per kWh in 2025. That's the honest starting point, and it cuts against solar before you even talk about panels. Cheap power means every kWh your roof makes is worth less than it would be in a high-rate state, which stretches out payback.
Then add the 2026 change: the 30 percent federal tax credit that used to make marginal systems pencil out ended for installs completed after December 31, 2025. North Dakota never had a state income tax credit to fall back on, and installed cost here runs above the national average. None of that means solar is a bad idea everywhere in the state — a well-sited system on a good roof, owned long-term, on a utility with fair net-billing terms, can still work. It just means the math is tighter here than in almost any state we've covered, so run your own numbers before signing anything.
North Dakota Electricity Prices Are Climbing, Just From a Low Base
Solar is a bet on future electricity prices: every kilowatt-hour your roof makes is one you don't buy from the utility. North Dakota's rates have climbed substantially in percentage terms, even though the absolute number stays low compared to most of the country. Here's the last few decades, from federal EIA data.
Full North Dakota electricity price data (1990–2025)
| Year | North Dakota (¢/kWh) | US avg (¢/kWh) |
|---|---|---|
| 1990 | 6.3 | 7.8 |
| 1991 | 6.2 | 8.0 |
| 1992 | 6.3 | 8.2 |
| 1993 | 6.3 | 8.3 |
| 1994 | 6.4 | 8.4 |
| 1995 | 6.2 | 8.4 |
| 1996 | 6.2 | 8.4 |
| 1997 | 6.3 | 8.4 |
| 1998 | 6.5 | 8.3 |
| 1999 | 6.5 | 8.2 |
| 2000 | 6.4 | 8.2 |
| 2001 | 6.5 | 8.6 |
| 2002 | 6.4 | 8.4 |
| 2003 | 6.5 | 8.7 |
| 2004 | 6.8 | 9.0 |
| 2005 | 7.0 | 9.5 |
| 2006 | 7.1 | 10.4 |
| 2007 | 7.3 | 10.7 |
| 2008 | 7.5 | 11.3 |
| 2009 | 7.6 | 11.5 |
| 2010 | 8.1 | 11.5 |
| 2011 | 8.6 | 11.7 |
| 2012 | 9.1 | 11.9 |
| 2013 | 9.1 | 12.1 |
| 2014 | 9.2 | 12.5 |
| 2015 | 9.6 | 12.7 |
| 2016 | 10.2 | 12.6 |
| 2017 | 10.3 | 12.9 |
| 2018 | 10.3 | 12.9 |
| 2019 | 10.3 | 13.0 |
| 2020 | 10.4 | 13.2 |
| 2021 | 10.9 | 13.7 |
| 2022 | 10.9 | 15.0 |
| 2023 | 11.0 | 16.0 |
| 2024 | 11.5 | 16.5 |
| 2025 * | 11.8 | 17.3 |
Source: US EIA, average residential retail electricity price. Values in cents per kWh. * 2025 is preliminary.
North Dakota residential electricity rose from roughly 7 cents per kWh in 2005 to about 11.8 cents in 2025 — up 69 percent — with the last decade moving at roughly 2.1 percent a year. That's a real trend, but it starts from one of the cheapest electricity markets in the country. A dollar of solar production offsets less of your bill here than in a state paying 15 or 20 cents per kWh — the single biggest reason this page's numbers look tougher than a coastal state's.
The North Dakota Sun, Month by Month
Panels care about how high the sun climbs and how long it stays up, and North Dakota's high latitude works against it on both counts. Long summer days help, but winter days are short and the sun stays low. A Fargo-area system produces around 1,237 kWh per installed kilowatt per year — noticeably less than the same system in the Sun Belt.
North Dakota monthly solar production data
| Month | kWh per installed kW |
|---|---|
| Jan | 72 |
| Feb | 84 |
| Mar | 103 |
| Apr | 125 |
| May | 122 |
| Jun | 120 |
| Jul | 137 |
| Aug | 130 |
| Sep | 112 |
| Oct | 96 |
| Nov | 73 |
| Dec | 63 |
| Year | 1237 |
Source: NREL PVWatts typical-year estimate (Fargo), per installed kW at latitude tilt.
Expect a steep swing between June's long, high-sun days and December's short, low ones. North Dakota averages about 202 sunny days a year, which is respectable — clear winter days with snow on the ground can even nudge output up slightly from reflected light, though cold doesn't offset the shorter days nearly as much as people assume.
What Solar Costs in North Dakota in 2026
Most North Dakota installs run about $3.30 to $4.10 per watt in 2025-2026 — commonly cited as roughly 25 to 28 percent above the national average. Three things drive that gap: one of the smallest cumulative installer markets in the country (SEIA ranks ND at or near the bottom nationally for deployed solar), mandatory structural engineering for the state's snow load (roughly 40 psf) and design wind speed (105-115 mph in state building code), and low installation volume that keeps soft costs like permitting and overhead elevated per job.
| System Size | Typical 2026 Cost | Roughly Offsets | Fits |
|---|---|---|---|
| 5 kW | $16,500 to $20,500 | ~6,185 kWh/yr (~$61/mo at 11.8¢) | Smaller home, lower usage |
| 8 kW | $26,400 to $32,800 | ~9,896 kWh/yr (~$97/mo) | Average North Dakota home |
| 12 kW | $39,600 to $49,200 | ~14,844 kWh/yr (~$146/mo) | Larger home, electric heat backup |
These figures exclude a possible electrical panel upgrade — see the angle section below — and North Dakota charges its standard state sales tax (5 percent) plus any local option tax on equipment, often on labor too, since solar isn't carved out as exempt here. Get at least three quotes, since the gap between installers is wider in a thin market like this one.
Estimate Your North Dakota Payback
The calculator below is set to North Dakota's average electricity rate and Fargo-area production. Enter your own monthly bill to see an estimated system size, payback period, and 25-year outlook. North Dakota rates have grown about 2.1 percent a year over the last decade — a reasonable starting default, though you should test it against your own utility's recent filings since MDU, Otter Tail, and Xcel don't move in lockstep.
North Dakota Solar Incentives That Still Exist in 2026
There isn't much left to work with, and being upfront about that is the point of this page.
- Gone — the 30 percent federal credit: The federal Residential Clean Energy Credit ended for installations completed after December 31, 2025, with no phase-out. If a quote still assumes it, that installer hasn't updated their math for 2026.
- Still here — the 5-year property tax exemption: N.D.C.C. §57-02-08(27) exempts 100 percent of the added assessed value a solar system brings from property tax for five years after installation. It is not automatic — you apply through your county director of tax equalization (some counties, like Ward County, publish their own form). After year five, the added value becomes taxable like any other home improvement.
- Not available — a state income tax credit: North Dakota does not offer a general state credit for residential solar. A separate biomass/geothermal/solar/wind credit exists in state tax code, but it targets older installations and business contexts, not a typical 2026 residential purchase.
- Not available — a sales tax exemption: Solar equipment and installation labor are not exempt from North Dakota's state sales tax (5 percent) or local option taxes. A few narrow renewable exemptions exist elsewhere in state code, but residential solar PV isn't among them.
- Partially — leases and PPAs: Third-party-owned systems can still capture a separate federal business credit (48E) through 2027, but it belongs to the leasing company. It may show up as a lower monthly payment; it may not. Compare a lease quote against a cash or loan purchase before assuming it's the better deal.
Net Metering in North Dakota — the Real Program
There is no statewide law called "net metering" in North Dakota. Instead, a Public Service Commission rule adopted in 1991 (the PSC Electric Rules) requires investor-owned utilities to interconnect and net-meter renewable or combined-heat-and-power systems up to 100 kW. Rural electric cooperatives and municipal utilities aren't required to offer it at all — some do voluntarily, and terms vary board to board.
Where it applies, it typically works as monthly net excess generation (NEG): usage and production are netted within the month, but any surplus you send to the grid is purchased at the utility's avoided-cost rate, not the retail rate you pay for power you buy. Montana-Dakota Utilities (MDU) pays roughly 3 cents per kWh for NEG — a fraction of the 11.8 cent retail rate. Otter Tail Power runs a comparatively more favorable qualifying-facility (QF) net-billing arrangement for systems under 100 kW, and Xcel Energy's North Dakota territory has largely moved away from retail-rate crediting.
This is, genuinely, the single most consequential variable in a North Dakota payback calculation — more than the panels themselves. Before you sign anything, ask your specific utility (MDU, Otter Tail, Xcel, or your local co-op) exactly what they pay for exported power today; the number isn't standardized statewide and is described by ND's own regulators as being in flux. If your roof needs work first, sort that out before a solar contract locks you in — see our roofing guide.
The Angle Most Quotes Skip: Your Electrical Panel
Many older North Dakota homes are still wired with 100-amp electrical service panels. A modern grid-tied solar inverter and interconnection often push a home past what a 100-amp panel can safely support, meaning an upgrade to 150 or 200 amps — typically $1,500 to $4,000 — before the system can even be installed. That cost routinely doesn't show up in an installer's headline per-watt price, because it depends on your specific panel and isn't universal.
How to Go Solar in North Dakota
Work through these steps in order before you commit to anything.
- Pull your last 12 power bills and calculate your average monthly cost — at 11.8 cents per kWh, you'll need meaningful usage for solar to make a real dent.
- Check your roof's orientation, shading, and remaining lifespan; a south-facing roof with 15-plus years left is the baseline.
- Have your panel's amperage checked and ask every installer, in writing, whether an upgrade is included in their quote.
- Get at least three quotes given the thin ND installer market, and confirm none assume the expired federal credit.
- Call your specific utility — MDU, Otter Tail, Xcel, or your co-op — and get their current net-billing tariff and avoided-cost export rate in writing.
- Apply for the 5-year property tax exemption through your county director of tax equalization once installed; it is not automatic.
For the full picture of how solar works, sizing, and buying versus leasing, read our main solar panels guide — it covers the national decision in depth, while this page focuses on what's specific to North Dakota.
Sources
Rates: US EIA, Electric Sales, Revenue, and Average Price (2025 preliminary). Federal credit repeal: One Big Beautiful Bill Act (P.L. 119-21). Net metering: North Dakota PSC Electric Rules, DSIRE, and Clean Energy Authority. Property tax exemption: ND Office of State Tax Commissioner and Ward County. Sales tax: ND sales tax exemptions. Cost data: SolarReviews and EnergySage. Production: NREL PVWatts. Reviewed every six months.