Complete Guide to Solar Energy in South Dakota
Your complete resource for solar energy. Everything you need to know about solar laws, solar costs, solar financing, and solar installation in South Dakota.
Why Solar Makes Sense in South Dakota
Customer-Owned Solar Is Allowed
South Dakota homeowners and businesses can generate electricity for their own use and interconnect with regulated utilities, which gives customers a legal path to install on-site solar and reduce grid purchases.
State Tax Treatment Can Improve Project Value
South Dakota provides a local property tax exemption for renewable energy systems under 5 megawatts. That helps protect project economics even though the state does not use a traditional net metering structure.
Rural and Agricultural Properties Can Be a Good Fit
South Dakota’s farms, ranches, shops, and outbuildings often have open space and daytime electric loads that can work well with properly sized solar systems.
Solar Economics Depend on Self-Use and Utility Compensation
Because South Dakota does not use a statewide net metered rate, the best-performing projects are usually those sized around on-site consumption, local utility terms, and realistic production estimates.
Quick Solar Facts
Explore Solar Topics
Laws & Regulations
South Dakota compensation rules for customer-owned solar, renewable energy property tax treatment, and solar easement protections.
Residential Solar
A guide for South Dakota homeowners covering roof suitability, shading, snow, inverter choices, battery storage, and how to size a system around actual electric usage.
Costs & Savings
Electricity pricing, self-consumption value, avoided-cost compensation for surplus generation, and what drives project economics in South Dakota.
Financing Options
Cash purchase, local lender financing, agricultural financing, and how to compare project costs against expected long-term bill savings.
Installation Guide
How to choose an installer, evaluate site conditions, understand interconnection requirements, and move from quote to utility approval.
Solar 101
How grid-tied solar works in South Dakota, what happens when your system produces more than you use, and why compensation is different from retail-rate net metering.
Community Solar
Special planning considerations for machine sheds, shops, agricultural loads, and rural properties with usable space for solar.
Solar Calculator
Estimate your solar savings and system requirements.
Quick Solar Savings Calculator
Important 2026 Updates
South Dakota Still Does Not Use a Statewide Net Metered Rate
South Dakota does not compensate solar generation at a net metered retail rate. Regulated utilities are required to interconnect with and purchase power from qualifying small solar facilities, but compensation is based on avoided cost rather than full retail bill crediting.
Renewable Energy Property Tax Exemption Remains Available
South Dakota law continues to provide a local property tax exemption for renewable energy systems less than 5 megawatts in size. The exemption is 70% or $50,000, whichever is greater, of the assessed value of the renewable energy property.
South Dakota Department of Revenue Property Tax Relief Programs
South Dakota Solar Laws & Regulations
Customer-Owned Solar Compensation
All electric utilities regulated by the South Dakota Public Utilities Commission are obligated to interconnect with and purchase power from small solar facilities if the generator agrees to the utility’s terms. For facilities under 100 kW, the rates paid for the power must be filed with the PUC, and compensation is based on avoided cost.
Renewable Resource Property Valuation Exemption
South Dakota law provides a property tax exemption for renewable energy systems less than 5 megawatts in size. The exemption is 70% or $50,000, whichever is greater, of the assessed value of the renewable energy property.
South Dakota Department of Revenue Property Tax Relief Programs
Solar Easements
South Dakota law allows property owners to grant solar easements in writing and record them with the county register of deeds. The easement may not exceed fifty years, and it becomes void if no solar development occurs within five years after the effective date of the easement.