North Dakota - Energy tax credit, solar rebates and incentives

North Dakota Renewable and Solar Energy Incentives

Renewable Energy Tax Credit (Commercial)

Taxpayers are granted a personal tax credit of 3% every year for up to five years for expenses, which include installation of qualified solar-electric systems, biomass, solar thermal systems and labor expenditures.  Residential wind energy installations and geothermal pumps are also subject to a tax exemption.

• If there is an excess of tax credit, it may be carried over to the following taxable year for up to five years (ten years for geothermal) if it surpasses tax liability.
• Installations must be new and pass all safety and performance regulations to be considered for this tax credit.

Geothermal, Solar and Wind Property Tax Exemption (Residential/Commercial)

• Geothermal, wind and solar systems are completely exempt from local property taxes.
• If the renewable energy system is used in conjunction with a conventional energy system, only the renewable energy share is eligible.
• Tax exemption may be granted for up to five years from the date of installation.

Net metering (Residential/Commercial)

Residents and commercial business owners of North Dakota with a surplus of renewable energy-derived power or adjoined heat/power systems, and who are clients of an electric utility run by an investor owner can utilize net metering.

• Surplus energy that is produced by a costumer can be purchased by a local utility at the end of the month at the avoided cost rate.
• Customers retain the renewable energy credits that are associated with the power that a system produces.
• Renewable energy installations must not exceed a capacity of 100 kilowatts to be considered for net metering.

Utility-sponsored Rebate and Loan programs (Residential/Commercial)

There are a few rebate and loan programs that are available in North Dakota that meant to help in the costs of installation and equipment of conservation energy technology and renewable energy systems.

• The majority of these programs are designated for energy-efficient technologies.
• Program specifics and requirements vary.

Federal Tax Credit (Residential/Commercial)

Taxpayers and commercial business owners are granted an energy tax credit of 30% of the total expenses, which include installation of residential and commercial solar panel (PV) systems, solar thermal systems, fuel cells and labor expenses.  Residential wind energy installations and geothermal pumps are also subject to a tax exemption.  

• Solar electric systems and solar thermal heaters have no maximum incentive.
• If there is excess federal tax credit, it may be carried over to the subsequent taxable year.  
• This may continue on through consecutive years until 2016, under which unused credit may or may not be expunged.

Federal Energy Conservation Subsidy Exclusion (Residential)

• Public utilities provide residential purchasers with an exemption of 100% of energy conservation subsidies.  
• The overall worth of an installation or renewable utility regardless of the energy conservation capacity, will be excluded from the buyer’s gross income.  
• Customers who participate in a utility company’s energy conservation program may be given a reduced rate of electricity utilized or a nonrefundable credit of the price of electricity on the customer’s monthly electric bill.

Energy-Efficient Mortgages (Residential)

• With this federal loan program, homeowners may utilize energy-efficient mortgages (EEM) to either supplement or completely fund renewable energy systems.