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In 2010 the Minnesota Legislature created a new funding source for net-metered photovoltaic installations. The Minnesota Bonus PV Solar Rebate Program encourages the development and use of PV modules that receive a specified minimum of component assembly by a Minnesota-based manufacturer.
The program provides Minnesota residents a financial incentive to install PV systems on their homes or businesses. Xcel Energy customers can access the funding through the Solar*Rewards® program.
Funding for the program is designated for five years based on the following schedule. (State of Minnesota fiscal calendar)
2011: $2 million (July 1, 2010 – June 30, 2011)
2012: $4 million (July 1, 2011 – June 30, 2012)
2013: $5 million (July 1, 2012 – June 30, 2013)
2014: $5 million (July 1, 2013 – June 30, 2014)
2015: $5 million (July 1, 2014 – June 30, 2015)
The calculated Minnesota Bonus rebate is paid out with five (5), equal annual payments. Example: A $20,000 Minnesota Bonus rebate for a project that is completed in June, 2011, would pay out with the following schedule.
$4,000 - June 2011
$4,000 - June 2012
$4,000 - June 2013
$4,000 - June 2014
$4,000 - June 2015
To qualify for the Minnesota Bonus incentive program, an applicant must:
Please review the document “Attached A Calculation” the calculation for MN Bonus projects (Attachment A). For example, if the customer/applicant or the installer on their behalf does not check this statement below as “Agree,” the MN Bonus Payment will be subjected to the depreciation assumption (Example 1). This may reduce the MN Bonus (combined rebates) from $5 per Watt or 60% of the project cost to something around 30% of the project cost. In exchange, the customer or other entity may maximize the federal depreciation tax benefit for the project.
Applicant agrees that it will not use, or by contract or other agreement permit another entity to use, federal depreciation tax benefits that exceed the federal tax imposed on rebates awarded under this application.
It is expected that the majority of the MN Bonus applications will check the “Agree” box. It will be rare that a taxable (business) will benefit more by taking the full depreciation option over the full MN Bonus Rebate payment option. The customer should be aware of this choice and discuss the option with their tax consultant so that the choice reflects the customer’s wishing on the application.
By checking the box, you are simply saying that the customer or other entity will not use federal deprecation tax benefits that exceed the federal tax imposed on the rebates. It does not mean that they cannot utilize federal depreciation or that you will do anything with federal depreciation. It simply states that the federal depreciation benefit (if utilized) will be limited to the federal taxes paid on the two rebates.
Even if the application is residential or non-profit and the rebate is not typically taxable, check “Agree” assumption. This will confirm that there is not a third party or other entity that will, though some legal agreement, be utilizing federal depreciation in excess of the federal taxes imposed on the payments.
If you check the (Agree) box, you may use the calculation from Example 2 in the attachment. This is the much more simple assumption that does not account for taxes and simple caps the combine rebates at $5 per Watt (DC capacity of the PV panels) or 60 percent of the project cost.
When you enter the estimated project cost, we realize that this amount may change when the project is complete. Therefore, the MN Bonus payment amount in the Acknowledgement Letter is also an estimate until the final invoice detail is entered into the system prior to finalizing the application process. Use the same project cost assumptions that you would use when submitting an ITC or Treasury 1603 tax credit application.
If you have any questions related to the MN Bonus calculation, send an email to solarprogrammn@Xcelenergy.com.
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Why do our products and services differ based on state? Because our business is regulated by state. We have regulated operations in eight Western and Midwestern states. The different regulatory body for each state we serve determines what products and services we deliver in that state.