South Dakota home battery and solar incentives

The short version: South Dakota has no state rebate for home batteries and no statewide net metering. There is a property tax exemption for renewable energy property, and each utility pays a set rate for extra solar. Here are the details.

At a glance (checked Nov 1, 2026)

IncentiveStatus in South Dakota
Federal 30% tax credit (25D)Ended. The IRS says it is not available for property placed in service after Dec 31, 2025.
State battery rebate or tax creditNone found. We searched state and utility sources and found no South Dakota program that pays toward a home battery.
Net meteringNo. The PUC says the state "does not compensate solar generation at a net metered rate."
Pay for exported solarYes, at each utility's avoided-cost rate (a few cents per kWh).
Property taxExemption for renewable energy property (details below).

No state battery program

We checked the South Dakota Public Utilities Commission (PUC), the Department of Revenue, the four utilities below and the DSIRE incentives database, and found no state or utility program in South Dakota that pays for a home battery. If you hear of one, ask for it in writing and check it on the utility's own website. Programs that exist in other states (such as those on our home battery incentives page) do not apply here.

No net metering: what that means

With net metering, a utility credits the solar power you send to the grid at the same price it charges you. The PUC explains that South Dakota's Legislature considered net metering in 2013, 2015 and 2016 and concluded mandatory net metering "is not in the public interest." Instead, under the federal PURPA law, utilities buy your extra solar at their "avoided cost," the cost they would otherwise pay to generate or buy that power.

For comparison, EIA data show South Dakota's average residential electricity price was 15.15 cents per kWh in August 2026 (13.90 cents in August 2025). The buyback rates below are much lower than that. So in South Dakota, each kWh of solar you use yourself is usually worth several times more than one you export. That is where a battery can help: storing daytime solar for use in the evening.

Your solarUse it nowStore in batteryExport to gridWorth yourretail rateUsed later atretail ratePaid avoidedcost rate

What each utility pays for extra solar

Which rules apply depends on your utility. Here are the larger ones, from their own pages and PUC filings.

Xcel Energy (eastern South Dakota, including Sioux Falls)

NorthWestern Energy

Black Hills Energy (western South Dakota)

Rural electric cooperatives

Many South Dakotans are served by member-owned co-ops, each with its own rules. East River Electric Power Cooperative, a wholesale power supplier, lists its member co-ops on its website. One example:

If you are a co-op member, call your local co-op before buying anything. Ask about interconnection, any battery rules and the current buyback rate.

The property tax exemption

South Dakota's Renewable Resource Property Valuation Exemption reduces property tax on qualifying renewable energy property, including solar. According to the Department of Revenue:

The law behind it is SDCL 10-4-42 to 10-4-45. SDCL 10-4-42 lists solar "that uses the sun as the source of energy to produce electricity or energy" as a renewable resource. SDCL 10-4-44 applies to facilities under five megawatts and covers "all real property used or constructed for the purpose of producing electricity using a renewable resource." The Department of Revenue's guide uses rooftop solar panels as its example: the panels get the exemption, not the whole house.

Batteries: neither the statutes nor the Department of Revenue guide mention battery storage. We could not confirm whether a home battery counts as renewable energy property, so do not count on it. Ask your county Director of Equalization before you buy.

What this means for a battery in South Dakota

Next: estimate size with the home backup calculator, check costs in home battery cost in 2026, and read is solar plus battery worth it?

Rates and rules change. Confirm everything with your utility and county before buying. This is not tax advice.

Sources