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ST. PAUL — Minnesotans looking to get more from their solar energy systems may be eligible for thousands of dollars in state incentives to add battery storage.
The Minnesota Department of Commerce has just over $1.4 million remaining through its Energy Storage Incentive Program for eligible customers outside Xcel Energy’s service territory. The program provides incentives of $250 per kilowatt-hour of battery capacity, up to $7,000. Funding is limited and available on a first-come, first-served basis.
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Battery storage allows homeowners and businesses to store electricity produced by solar panels and use it later — including when the sun isn’t shining. By storing more of the solar energy they produce for later use, customers may also be able to further reduce their electric bills and provide low-cost clean energy to the overall power system when it is needed most.
Additionally, if a battery storage unit is coupled with the appropriate energy management system, storage units can be equipped to provide power during outages.
“Most of us don’t think much about electricity until the power goes out,” Minnesota Department of Commerce Temporary Commissioner Julia Dreier said in a press release. “Battery storage can give families and businesses another layer of resilience by allowing them to save some of the energy their solar panels produce for when they need it. We know these systems can be a significant investment, and this program can help make that option more accessible to Minnesotans who decide it’s right for them.”
The incentive is available to qualifying Minnesotans, including homeowners, businesses, government entities, and schools, served by electric utilities outside Xcel Energy’s territory. Battery systems must be paired with solar and may not exceed 50 kilowatt hours of capacity.
Minnesotans who already have solar can explore adding battery storage, while those considering a new solar installation can consider installing solar and storage together.
Commerce has provided more than $600,000 in incentives to Minnesotans through its Energy Storage Incentive Program since 2024.
Battery storage can:
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Battery systems remain a significant investment, even with an incentive. Commerce encourages Minnesotans to consider their individual energy needs and goals and talk with a qualified installer about whether battery storage makes sense for them.
“We want Minnesotans to feel like they have options when it comes to how they power their homes and businesses,” Assistant Commissioner Lissa Pawlisch said in a press release. “These incentives are one way we can help more families and businesses decide whether storage makes sense for them.”
Minnesotans interested in the program should first determine which electric utility serves their property. Those outside Xcel Energy’s service territory should talk with a few qualified solar or battery installers about system options to help determine whether a battery system meets their energy needs and goals. Customers should also check with their electric utility to see whether additional battery storage rebates or rate programs are available.
Customers within Xcel Energy’s service territory are covered by a separate battery storage incentive program administered through Xcel Energy.
Learn more about battery storage, eligibility, current incentive availability and how to apply on Commerce’s Battery Energy Storage Incentives webpage .
In 2023, Minnesota lawmakers passed more than 40 initiatives to reduce pollution and prepare communities for climate change, including 100 percent carbon-free electricity by 2040, a $100 million investment in climate-resilient community infrastructure, incentives for electric vehicles, and grants for expanding the use of solar.
To date, Commerce has awarded nearly 200 solar energy grants to schools and over 200 awards for solar on public buildings
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As of 2025, Minnesota has reduced emissions by 48% compared to 2005 levels. Zero-carbon energy accounts for much of Minnesota’s electricity generation, with 55% coming from renewable and nuclear sources, outpacing the national share of 43%.
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