The real costs and benefits of a Minnesota solar project, with surprising results.

To utilize accessible property and capitalize on the financial benefits of on-site energy production, a rural business owner near Detroit Lakes, Minnesota set up a ground-mounted commercial solar project with iSolar. The system went online in October 2021 — below is the production value and the financial performance of the project, using real first-year data.

Project details

• 140 Q CELLS panels — 55 kilowatts direct current
• 5 SolarEdge 7,600-watt inverters — 38 kilowatts alternating current
• Panels occupy 8,250 square feet (about 0.19 acres)
• Installed at the optimal angle of 35 degrees, facing 180 degrees due south
• Time to interconnection: 4 months

Project cost, incentives & expected output

• Project cost — $142,500. Includes engineering, permits, parts, labor, interconnection, and utility fees.
• Investment Tax Credit value — $31,980. Recovered in year 1.
• Depreciation tax value — $40,590 (based on a 30% tax bracket). Recovered in year 1.
• Grant money — $19,500.
• Total invested after incentives — $50,430.
• Anticipated year-1 production — 68,500 kWh.

These incentive figures reflect the programs available when this project was built in 2021. Commercial incentives change — ask us during a consultation what applies to a project today.

Actual production and payback

• Actual year-1 production — 73,330 kWh (it was a very good year)
• Price per kWh in year 1 — $0.117/kWh
• Financial value of year-1 production — $8,575
• 30-year production at the current pace — 2,017,842 kWh after factoring in panel degradation
• Value of 30 years of production — $236,087, not adjusted for energy-price escalation
• Years until break-even — 5.3 years. The owner recovers the initial investment in year 5, then runs cash-flow positive
• Internal rate of return — 12.33%

The project outperformed expectations in its first year by 4,830 kWh, worth $565. Our expectation is that production will land closer to the original projection in future years, which may push the payback to about 5 years 10 months instead of the current 5 years 4 months — 2022 was an exceptionally good year for solar production in Minnesota.

“We could not be happier with the outcomes of the solar so far. Not only is the solar providing all of our energy needs, but we are also receiving checks from the utility.” — the project owner

This is a great example of using available land to create a new revenue stream while offsetting the electric bill. Curious what the numbers would look like for your property? See our commercial solar services or request a free quote — we’ll run a production model with real assumptions, and we never bake incentives into the savings math without showing our work.