Federal solar credit ended Dec 31, 2025
Sorted & Saved

Solar costs · South Dakota

Solar Panel Cost in South Dakota

Updated Data verified Nov 5, 2026

A typical South Dakota home uses 994 kWh a month[1] of electricity. Covering that with solar takes a system of about 8.5 kW est.[1,2], which costs roughly $26,000 to $35,000 est.[1,2,3] before incentives at the state's median installed price. With South Dakota's average residential price of 14.58¢ per kWh[4], our model puts payback at about 24 years est.[1,2,3,4,5]. Your quote, roof and utility plan will move these numbers, so treat them as a starting point.

On this page [ 7 ]

South Dakota solar at a glance

Average electricity price14.58¢/kWh[4]Jan–Aug 2026 average (preliminary)
Average home use994 kWh/mo[1]2024 average
Solar output per kW1,409 kWh/yr[2]PVWatts estimate for Sioux Falls
Median installed price$3.60/W[3]Estimate, before incentives
Typical system8.5 kWSized to cover 100% of use
Typical price$30,600Estimate, before incentives
Year-1 savings$1,060Estimate
Payback24 yearsEstimate, cash purchase

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.

Estimated cost, output and payback by system size in South Dakota
SystemPrice before incentives[3]After incentiveskWh in year 1[2]Year-1 savings[4][5]Payback (years)
4 kW$14,400$14,4005,640$50024
6 kW$21,600$21,6008,450$75024
8 kW$28,800$28,80011,270$1,00024
10 kW$36,000$36,00014,090$1,25024
12 kW$43,200$43,20016,910$1,50024

Incentives that lower the price in South Dakota

Federal · tax creditEnding soon

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
State · tax exemptionAvailable

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]

Full South Dakota net metering and export-credit rules →

FAQ

Frequently asked questions

How much do solar panels cost in South Dakota?

At the state median installed price of $3.60 per watt est.[3], a 8.5 kW est.[1,2] system that covers a typical home's use costs about $30,600 est.[1,2,3] before incentives. Quotes vary with roof, equipment and installer.

How long does solar take to pay for itself in South Dakota?

For a cash purchase at the state's average electricity price of 14.58¢ per kWh[4], our model estimates about 24 years est.[1,2,3,4,5]. Your utility's export credit and rate plan matter a lot; see the export-credit table above.

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.

Change log

  1. 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)).
  2. 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)).
  3. 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)).