With as many sunny days as Florida, South Dakota has the potential to be a great producer of solar energy. In addition to weather, the relative ease of connectivity to the power grid makes the state increasingly attractive to installers and contractors that specialize in solar power. Residents interested in capitalizing on potential savings while simultaneously making a difference should explore the growing collection of solar panel options in South Dakota.

South Dakota’s Solar
Report Card

Grade
Methodology

To determine a grade for each state, our researchers and solar experts analyzed data on crucial solar-advancement criteria from the following sources:

We determined a rank from 1 to 10 for each state in each category. We then combined the scores with the following weights and assigned an overall grade for each state. Our goal is to encourage those considering solar for their homes to get a basic understanding of solar potential in their areas and discover the best opportunities for clean energy available.

Incentives & Rebates, 40%

Electricity Rate, 15%

Renewable Energy Policy, 30%

Interconnection Ease, 5%

Photovoltaic Potential, 10%

A Look at Electricity in South Dakota

The cost of electricity in South Dakota is below the national average at $0.11/kWh. This means that solar can save you less here than in other states, making it difficult for solar companies to draw in consumers. According to the U.S. Energy Information Administration, in 2015, wind and hydroelectric power generated 73 percent of South Dakota’s total net electricity generation. The state’s low prices and pronounced use of other renewable resources has contributed to the lack of extensive solar energy in the state.

Cost of Residential Electricity

Data from U.S. Energy Information Administration
*as of Q3 2015

South Dakota Solar:
Library of Resources

Policies & Incentives

Despite an increase of 78 percent in installed solar capacity since 2013, South Dakota still ranks near the bottom of the list in this category. There is significant room for growth for solar in this state. South Dakota does little to encourage residential or commercial solar installation. The state does not offer rebate programs, performance payback, or solar tax credits because there is no state income tax. However, it does offer a very strong property tax exemption and the federal solar tax credit still applies. While the state can do more to spur solar energy use, residents can still potentially secure a good rate of return on their solar systems.

REBATES/INCENTIVES

None

None

Renewable Energy Facility Sales and Use Tax Reimbursement

South Dakota offers a 100 percent reimbursement payment on sales and use taxes paid on new or expanded renewable energy systems. Qualifying costs of new projects must exceed $20 million while updated systems must exceed $2 million.

POLICIES

Interconnection Standards

South Dakota’s interconnection standards for distributed generation have four levels for systems up to 10 megawatts (MW) in capacity. Technical screens apply to each level and general liability insurance is required.

Renewable, Recycled and Conserved Energy Objective

Legislation enacted in 2008, established a voluntary objective that 10% of all retail electricity sales in the state be obtained from renewable and recycled energy by 2015. A modification made the following year allowed “conserved energy” to meet the objective.

None for residential specifically

None for commercial specifically

TAX CREDITS

TAX EXEMPTIONS

Renewable Energy System Exemption

South Dakota offers tax exemptions for facilities that generate electricity using solar resources. Either the first $50,000 or 70% of the assessed value of eligible property, whichever is greater, is exempt from the real property tax.

None for residential specifically

None for commercial specifically

Contractors & Installers: Sizing Up South Dakota Solar

Solar energy is a growing industry in South Dakota, with more and more companies entering the solar game each year. See who’s new to South Dakota solar, which contractors have the most experience, and, perhaps most importantly, who may be able to help you get on the fast track to solar installation.

Eco Works

This business designs and installs solar PV systems for connecting to the grid, batteries, and pumps for residential, agricultural and commercial systems.

Where it operatesRapid City, SD

Year of opening2014

Zenergy

Zenergy installs solar PV panels and solar air furnace panels for residential, business, government, and non-profits in Minnesota, North Dakota, South Dakota, and Wisconsin.

Where it operatesSebeka, MN, but serves SD

Year of opening2008

GenPro Energy Solutions

This company provides a wide range of energy efficiency solutions including solar PV and LED lighting.

Where it operatesPiedmont, SD

Year of opening2003

Wind and Solar Specialists

Wind and Solar Specialists is a full service small wind and solar company.

Where it operatesAlta, Iowa, but serves SD

Year of opening2002

Williams Power Systems

Williams Power Systems is a family-operated, veteran-owned company specializing in renewable energy projects such as solar electric, solar thermal and wind systems, both grid tied and with battery backup.

Where it operatesBaltic, SD

Year of opening2005

Hay Solar Holdings, ULC

This company works with financing and manages power projects.

Where it operatesSioux Falls, SD

Year of opening2011

Cleaner Greener Energies, Inc.

This company is a renewable energy company that specializes in the sales, installation and servicing of green energy solutions.

Where it operatesSioux Falls, SD

Year of opening2011

Additional Resources & Info

Learn more information about solar policies, rebates and governing bodies in South Dakota with these helpful resources to get you started.

South Dakota State Energy Office

Explore a wide variety of information on energy programs, policies and strategies specific to South Dakota.

DSIRE Incentives Database – South Dakota

Search through a comprehensive list of all the incentives and policies provided in South Dakota and the United States.

U.S. Energy Information Administration – South Dakota State Profile

Find official energy statistics and electricity data of supply and demand provided on this site by the U.S. government.

South Dakota Public Service Commission

Learn about the governing body responsible for the regulation of electricity rates and other services of South Dakota.

South Dakota State Legislature

Find out how to contact state legislators and track pending legislation on current solar energy issues.