Data approachEIA rates · NREL sun hours · 2026 federal policy · methodology
A typical 8 kW solar system in North Dakota costs about $24,000 installed in 2026 and saves roughly $1,257 in year one at 13.4 cents per kWh, a simple payback near 19 years. The 30% federal residential solar credit ended for systems installed after Dec 31, 2025. North Dakota exempts solar equipment from property tax for five years but has no state solar credit.
Last updated October 4, 2026.
North Dakota’s residential electricity price is among the lowest in the country: 13.41 cents per kWh in July 2026 versus an 18.31-cent U.S. average (EIA). Low rates, not cold weather, are the main reason payback here is long.
Data visualization
North Dakota pays about 27% less per kWh than the U.S. average. Residential price in July 2026: 13.41¢ vs 18.31¢. Source: EIA Electric Power Monthly, 2026.
Chart summary: North Dakota households pay about 27% less per kWh than the U.S. average (13.41¢ vs 18.31¢, July 2026, EIA). Because each kWh your panels produce is worth less here, solar takes longer to pay for itself than in higher-priced states.
This guide covers what a system costs, which incentives remain after the federal changes, how net metering works, realistic payback, and which homes are the best fit. Figures use our standard savings model and the inputs on our North Dakota solar data page.
💰 System Cost
What Do Solar Panels Cost in North Dakota in 2026?
A typical 8 kW North Dakota system costs about $24,000 at our blended $3.00-per-watt model price, with no federal credit subtracted for a 2026 installation. EnergySage marketplace quotes averaged about $2.60 per watt nationally in 2026, while Lawrence Berkeley National Laboratory data put the 2024 median for cash-purchased systems near $3.50 per watt. We use $2.60, $3.00 and $3.50 as our low, model and high cases.
System size
Price per watt
Installed cost
Simple payback*
25-year net savings*
8 kW
$2.60
$20,800
~16.5 years
~$22,100
8 kW
$3.00 (model)
$24,000
~19.1 years
~$18,900
8 kW
$3.50
$28,000
~22.3 years
~$14,900
*Assumptions: 10,775 kWh/yr production (8 kW × 4.5 peak sun hours × 365 × 0.82 system derate), 13.41¢/kWh (EIA, July 2026), 0.87 bill-offset factor, year-1 savings ~$1,257. Simple payback = cost ÷ year-1 savings. 25-year net savings assume 3% annual rate escalation and 0.5%/yr panel degradation. No federal credit; financing costs excluded.
At about 1,347 kWh per kW per year, a home using the North Dakota average of 1,029 kWh a month (12,348 kWh a year, EIA 2024) would need roughly 9 kW to cover all of its use. An 8 kW system’s 10,775 kWh is about 87% of that. Use the solar system size calculator with your last 12 months of bills before collecting quotes.
Equipment choices move the price. Standard monocrystalline 400 W panels are the common choice; premium high-efficiency panels cost more but produce more per square foot, which helps on small or partly shaded roofs. If your roof is near the end of its life, replacing it before installing panels avoids paying to remove and reinstall the array later, so budget for that separately.
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🏛️ Incentives
Which Solar Incentives Remain in North Dakota in 2026?
North Dakota’s property-tax exemption remains; the federal homeowner credit does not. The Residential Clean Energy Credit (§25D), worth 30% of system cost, is not allowed for expenditures made after Dec 31, 2025, under the One Big Beautiful Bill Act (Public Law 119-21, signed July 4, 2025). The IRS treats the expenditure as made when installation is completed, so paying in 2025 for an installation finished in 2026 does not qualify. See the IRS FAQs on the OBBB changes.
Incentive
Status in October 2026
Federal §25D residential credit (30%)
Not allowed for installs completed after Dec 31, 2025
2025 installs and carryforwards
Claim 2025 installs on the 2025 return (Form 5695); unused credit can carry forward
§48E business credit (leases, businesses, farms)
Generally limited to projects that began construction by Jul 4, 2026 or are placed in service by Dec 31, 2027
North Dakota property-tax exemption
Solar, wind and geothermal devices exempt for five years after installation; apply annually with your local assessor
State solar income-tax credit or rebate
None; the former state credit expired Dec 31, 2014
Not tax advice; confirm with a tax professional.
The exemption applies to the property tax that would otherwise be due on the installed device, and the ND Office of State Tax Commissioner says the application must be filed each year with the local assessor (program page). Much of North Dakota is served by rural electric cooperatives, and utility cash rebates for rooftop solar are uncommon; ask your utility and check DSIRE before signing.
Farms and rural businesses are the one group with meaningful federal support left. They may use the §48E business credit within the deadlines above plus 5-year MACRS depreciation, and can apply for USDA REAP grants when funding rounds are open. Nonprofits, schools and local governments may be able to use elective (“direct”) pay under §6417 for qualifying §48E projects. Confirm eligibility and deadlines with a tax professional before committing.
Other home-energy credits also changed: the §25C credit for heat pumps and insulation is not allowed for property placed in service after 2025, and the federal EV credits ended for vehicles acquired after Sep 30, 2025 (IRS FAQ FS-2025-05). State-run IRA Home Energy Rebates (HEAR/HOMES) were not repealed, but availability depends on North Dakota’s program and remaining funds, so check with the state energy office.
⚖️ Policy & Net Metering
How Does Net Metering Work in North Dakota?
North Dakota requires investor-owned utilities to offer net metering for systems up to 100 kW, but excess generation is bought at the utility’s avoided cost rather than the retail rate. If you have net excess generation at the end of a monthly billing period, the utility purchases it at avoided cost, so solar you use at home is worth much more than solar you export.
Our model uses a 0.87 bill-offset factor, an assumption that most of your production offsets purchases at retail. If you export a large share, for example from a big array on a home that is empty during the day, your savings will be lower.
Practical rules for North Dakota:
Size to usage, not to the roof. Target roughly 90–100% of annual consumption; extra production earns only the avoided-cost rate.
Shift loads to daytime. Running laundry, dishwashers or EV charging while the sun is up raises self-consumption.
Know your utility type. The state rule applies to investor-owned utilities. Electric cooperatives and municipal utilities are not bound by it and set their own export credits and fees, so get terms in writing. If you are served by Xcel Energy, confirm current residential net-metering availability before you sign.
About 19 years for a typical 8 kW system at $24,000, based on year-one savings of about $1,257. If electricity prices rise 3% a year, as we assume, cumulative savings catch up with the cost in about 16 years.
Data visualization
An 8 kW system at $24,000 breaks even around year 16 and ends year 25 about $18,900 ahead. Cumulative net cash flow in dollars, starting at 13.41¢/kWh with 3% yearly rate escalation and 0.5% yearly degradation, no federal credit. Source: EIA 2026, GreenEnergyCalc model.
Chart summary: At 13.41¢/kWh with 3% yearly rate growth, the $24,000 system breaks even in about year 16 and ends year 25 about $18,900 ahead. The $20,800 system breaks even around year 14 (about $22,100 ahead); the $28,000 system around year 18 (about $14,900 ahead). Without rate growth, break-even is the simple payback of 16.5, 19.1 and 22.3 years.
Source: GreenEnergyCalc standard model; see methodology.
The rate matters a lot. July is one month, and North Dakota’s 2024 annual average residential price was 11.51¢/kWh (EIA-861). Rerunning the model at that lower rate gives the results below.
Data visualization
Simple payback for an 8 kW system ranges from 16.5 to 26.0 years. Cost divided by year-1 savings, no federal credit, at $2.60, $3.00 and $3.50 per watt. Source: EIA rates, EnergySage and LBNL pricing, GreenEnergyCalc model.
Chart summary: At 13.41¢/kWh, simple payback is 16.5, 19.1 or 22.3 years for $2.60, $3.00 or $3.50 per watt. At 11.51¢/kWh it stretches to 19.3, 22.2 or 26.0 years. Both a lower install price and a higher electricity rate shorten payback, and the install price is the one you can negotiate.
Without solar, a household using the state average of 1,029 kWh a month would pay about $138 a month today, and about $60,400 over 25 years if rates rise 3% a year. With the $24,000 system, remaining bills plus the system cost total about $41,500 in the same scenario.
Financing lengthens payback further. As an illustration, a $24,000 loan at 7% over 12 years costs about $247 a month (about $11,500 in interest), versus year-one savings of about $105 a month. A home battery (often around $15,000 on marketplace quotes, with no federal credit in 2026) lengthens payback, but it provides backup during winter storms, which matters for rural homes far from repair crews. For a neighboring market, see our South Dakota and Minnesota pages. Model your own numbers with the solar payback calculator.
📋 Key Insights
Is North Dakota Solar a Good Fit for Your Home?
Solar makes the most sense in North Dakota for households with high electricity use, an unshaded south-facing roof, and plans to stay 20 years or more. With payback in the high teens to mid 20s of years at average prices, a lower installed price is the most important thing to get right.
The strongest candidates:
High usage. Electric heat, well pumps, shops or an EV raise daytime and annual consumption, so more production offsets retail purchases.
Good roof and orientation. A south-facing roof with no shading from about 9 a.m. to 3 p.m. produces noticeably more than east- or west-facing planes; even a single tree or chimney can cut output. Insist on a shade analysis.
Long ownership horizon. Panels commonly carry 25-year performance warranties and degrade gradually (we model 0.5% a year), so much of the net savings arrives in the second half of the system’s life.
A competitive quote. At $2.60 per watt, simple payback falls to about 16.5 years and modeled 25-year net savings rise to about $22,100.
Weaker candidates include homes likely to be sold within 10 years, heavily shaded roofs, and roofs needing near-term replacement. Snow can temporarily cover panels, and December and January production is lowest, so compare annual totals rather than winter months. NREL’s PVWatts tool gives a location-specific production estimate you can compare with installer proposals.
Sources and Method
U.S. Energy Information Administration: Electric Power Monthly (residential prices, July 2026) and EIA-861 Table 5A (2024 North Dakota average: 11.51¢/kWh, 1,029 kWh a month).
IRS FS-2025-05: termination dates for §25C, §25D and EV credits.
Install prices: EnergySage 2026 marketplace average ($2.60/W) and LBNL Tracking the Sun 2024 cash-purchase median ($3.50/W), as reported by industry guides.
Model assumptions (not measured data): 4.5 peak sun hours, 0.82 derate, 0.87 bill offset, 3% yearly rate escalation, 0.5% yearly degradation. Your results will differ; get a site-specific estimate.
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Not for homeowners. The 30% Residential Clean Energy Credit (§25D) is not allowed for systems whose installation is completed after Dec 31, 2025 (Public Law 119-21; IRS FAQ FS-2025-05). Systems finished in 2025 are claimed on the 2025 return, and unused credit can carry forward. Leased systems, farms and businesses fall under separate §48E rules with their own deadlines.
An 8 kW system costs about $24,000 at a $3.00-per-watt model price, with quotes typically between $20,800 ($2.60/W, the EnergySage marketplace average) and $28,000 ($3.50/W). No federal credit comes off a 2026 install, and North Dakota has no state solar tax credit or rebate. Compare at least three quotes.
It can be, but payback is long. At 13.4 cents per kWh, an 8 kW system at $24,000 saves about $1,257 in year one, a simple payback near 19 years, or about 22 years at the 2024 average rate of 11.5 cents. Low rates, not cold weather, are the main reason. It works best for high-usage homes staying 20+ years.
State rules require investor-owned utilities to offer net metering for systems up to 100 kW. Power you use offsets retail purchases, but excess generation left at the end of a monthly billing period is bought at the utility's avoided-cost rate, which is below retail. Electric cooperatives and municipal utilities set their own policies, so confirm yours in writing.
The main state benefit is a property-tax exemption: solar, wind and geothermal devices are exempt for five years after installation, and you apply annually through your local assessor (ND Office of State Tax Commissioner). North Dakota's former state renewable energy income-tax credit expired Dec 31, 2014, so there is no state solar credit. Check DSIRE and your utility for rebates.
North Dakota solar by electric bill
See system size and payback for common monthly bills in North Dakota.
12.36¢/kWh — North Dakota average residential price. Source: EIA Electric Power Monthly, Table 5.6.B (year-to-date through July 2026), residential average retail price (July 2026) (EIA)
Solar production
4.5 peak sun hours/day × 0.82 system derate. Approximate state-average daily solar resource (peak sun hours) based on NREL solar resource data (NSRDB); not location-specific — use NREL PVWatts for an address-level estimate. (NREL PVWatts)
Installed price
$3.00 per watt before incentives. Blended 2026 US residential installed price used by this site; EnergySage marketplace reported about $2.60/W (mid-2026); full-market medians are higher.
Federal tax credit
$0 for homeowner-owned systems installed in 2026 — the 30% §25D credit ended Dec 31, 2025 (IRS)
Net metering
Full retail net metering — solar assumed to offset 87% of the bill. North Dakota requires net metering for systems up to 100 kW at investor-owned utilities; excess is credited at avoided cost.
Estimates only — not tax, legal or financial advice. Get at least three installer quotes and confirm incentives with your utility and a tax professional.