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South Dakota solar at a glance
Estimates use the inputs above and the assumptions in our methodology: Xcel Energy credits exports from new solar customers at about 3.16¢ per kWh; we use it for South Dakota. Other utilities differ. Prices rise 2.5% a year; panels lose 0.5% a year.
Solar cost in South Dakota by system size
Same assumptions as the typical home above; only the system size changes. Prices are the state median before incentives and include the incentives our calculator applies by default in South Dakota.
| System | Price before incentives[3] | After incentives | kWh in year 1[2] | Year-1 savings[4][5] | Payback (years) |
|---|---|---|---|---|---|
| 4 kW | $14,400 | $14,400 | 5,640 | $500 | 24 |
| 6 kW | $21,600 | $21,600 | 8,450 | $750 | 24 |
| 8 kW | $28,800 | $28,800 | 11,270 | $1,000 | 24 |
| 10 kW | $36,000 | $36,000 | 14,090 | $1,250 | 24 |
| 12 kW | $43,200 | $43,200 | 16,910 | $1,500 | 24 |
Incentives that lower the price in South Dakota
Business credit for leased and PPA systems (48E)
Claimed by the system owner, not the homeowner; solar must begin construction by July 4, 2026 or be in service by December 31, 2027[6]
If a company owns the panels on your roof (a lease or power purchase agreement), that company may claim the business clean electricity investment credit and can reflect it in your price. You cannot claim it yourself.
- Who
- Third-party-owned systems (leases and PPAs). Ask the provider whether the price assumes this credit.
- Deadline
- December 31, 2027
- Checked
- November 5, 2026
Renewable Energy Facility Property Tax Exemption (SDCL 10-4-44)
Exempts the greater of the first $50,000 or 70% of the assessed value of renewable energy property from real property tax[7]
Real property used to produce electricity from a renewable resource (including solar) at facilities under 5 MW nameplate capacity; assessed locally by the county director of equalization.
- Who
- Real property used to produce electricity from a renewable resource (including solar) at facilities under 5 MW nameplate capacity; assessed locally by the county director of equalization.
- Deadline
- None set in the source
- Checked
- November 5, 2026
All South Dakota incentives, including utility and local programs →
How South Dakota utilities credit your solar
South Dakota has no statewide net metering rule; the Legislature has repeatedly rejected mandatory net metering. Utilities must buy power from small qualifying generators at a purchase price reflecting the value of the generation (federal PURPA/FERC rules), so export credits are set utility by utility.[8]
We have not added every South Dakota utility yet, so the estimates on this page use the state-level rule: Xcel Energy credits exports from new solar customers at about 3.16¢ per kWh; we use it for South Dakota. Other utilities differ.[5]
Next steps
FAQ
Frequently asked questions
How much do solar panels cost in South Dakota?
How long does solar take to pay for itself in South Dakota?
Is there still a federal solar tax credit?
Not for homeowners who buy. The Federal Residential Clean Energy Credit (25D)[9] does not apply to systems whose installation is completed after December 31, 2025. Leased and PPA systems are different: the company that owns the system may still claim a business credit.
sources
[ 9 ]Every number on this page links to one of these sources. Dates show when we last checked each one.
- EIA Electric Sales, Revenue, and Average Price 2024, Table 5A: Residential average monthly bill by stateeia.gov · checked Nov 5, 2026
- NREL/NLR PVWatts v8 (1 kW-DC, fixed roof mount, 20° tilt, south-facing, 14% losses, TMY weather)pvwatts.nlr.gov · checked Nov 5, 2026
- U.S. Distributed Solar and Storage 2026 Data Update (Barbose, Darghouth, O'Shaughnessy, Forrester), Berkeley Labeta-publications.lbl.gov · checked Nov 5, 2026
- EIA Electric Power Monthly, Table 5.6.B: Average price of electricity by state, year-to-date (August 2026, preliminary)eia.gov · checked Nov 5, 2026
- Northern States Power Co. South Dakota Electric Rate Book SDPUC No. 2, Section 9, Sheet 2 - Occasional Delivery Energy Service, Rate Code E50 (effective 01-01-26)puc.sd.gov · checked Nov 5, 2026
- Public Law 119-21 - Sec. 70513(a) and (g)(5) (48E); Sec. 70512(a) and (l)(4) (45Y)govinfo.gov · checked Nov 5, 2026
- SDCL 10-4-44 - Renewable energy facilities with less than five megawatts of nameplate capacity classified--Property taxable--Exemptionsdlegislature.gov · checked Nov 5, 2026
- South Dakota PUC - Compensation for small generatorspuc.sd.gov · checked Nov 5, 2026
- IRS FS-2025-05: FAQs for modification of sections 25C, 25D, 25E, 30C, 30D, 45L, 45W, and 179D under Public Law 119-21 (OBBB)irs.gov · checked Nov 5, 2026
State data last re-checked November 5, 2026.
Change log
- Monthly output per kW in Sioux Falls updated to [82.2, 96.7, 122.5, 141.2, 137.3, 149.0, 164.0, 139.0, 123.2, 104.5, 82.5, 66.8] kWh/kW/month (NREL/NLR PVWatts v8 (1 kW-DC, fixed roof mount, 20° tilt, south-facing, 14% losses, TMY weather)).
- Average solar radiation on the panels in Sioux Falls updated to 4.86 kWh/m2/day (NREL/NLR PVWatts v8 (1 kW-DC, fixed roof mount, 20° tilt, south-facing, 14% losses, TMY weather)).
- Solar output per kW in South Dakota (PVWatts, Sioux Falls) updated to 1408.9 kWh/kW/yr (NREL/NLR PVWatts v8 (1 kW-DC, fixed roof mount, 20° tilt, south-facing, 14% losses, TMY weather)).