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)

Incentive	Status 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 credit	None found. We searched state and utility sources and found no South Dakota program that pays toward a home battery.
Net metering	No. The PUC says the state "does not compensate solar generation at a net metered rate."
Pay for exported solar	Yes, at each utility's avoided-cost rate (a few cents per kWh).
Property tax	Exemption 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.

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)

Xcel's South Dakota net metering page covers how to apply to connect solar; the payment rates are set in its PUC-approved tariff.
Its small qualifying facility tariff, effective January 1, 2026 and approved in PUC docket EL25-025, pays $0.0316 per kWh for energy delivered to Xcel, with a $3.75 per month metering charge for single-phase service. This is its "Occasional Delivery Energy Service" rate; a separate time-of-delivery rate has a $4.75 metering charge and different payments.
Payment is limited to a maximum of 2,000 kWh delivered per month; energy above that is not paid for.

NorthWestern Energy

Its Small Qualifying Facility Riders, effective April 1, 2025 (PUC docket EL25-005), pay $0.02547 per kWh under Rate 73.
Rate 74 pays $0.03241 per kWh on-peak and $0.01948 per kWh off-peak.

Black Hills Energy (western South Dakota)

After interconnection you get a bi-directional meter, and each month you receive a credit for excess energy at Black Hills' current avoided-cost rate.
Tier 1 covers systems of 10 kW AC or less. Systems must be inverter-based, and battery storage specifications must be submitted if you have a battery.
Fees listed: $50 application fee and a one-time $50 bi-directional metering fee. Proof of insurance and a wiring certificate or permit are required.
Black Hills' tariff page still describes a proposed "buy all, sell all" change for new rooftop solar. That proposal was filed in 2021 (PUC docket EL21-011). The PUC approved a settlement and closed the docket on Oct 14, 2021; under the settlement, Black Hills agreed to study fixed-cost recovery and file any tariff revision with an effective date no earlier than Jan 1, 2024.
Black Hills' current rate case (PUC docket EL26-003, filed Feb 19, 2026) was still pending when we checked on Nov 2, 2026. A settlement was filed Oct 26, 2026 and the case is on the PUC's Nov 4, 2026 agenda. The settlement's tariff exhibit lists a cogeneration generation credit of 2.48 cents per kWh delivered, with a proposed effective date of Dec 1, 2026. It is not final until the PUC rules, so check the docket for the outcome.

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:

Sioux Valley Energy's rate schedule says its avoided cost is Basin Electric's PURPA rate times loss adjustments; it lists the 2024 Basin PURPA rate as $0.01370 per kWh. Its site says net billing is offered to Minnesota members only.
Sioux Valley says members need an interconnection agreement before connecting solar, batteries or backup-capable EV chargers.
Its community solar subscriptions are listed as sold out.

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 exemption is 70% of the assessed value of the renewable energy property, or $50,000, whichever is greater.
It is a continuous exemption for every type except geothermal, so it applies to solar year after year.
No application is needed. Contact your county Director of Equalization to start the process.

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

Backup is the main reason. Without a rebate or credit, a battery's value here is mostly backup during outages, plus storing your own solar.
Self-use beats export. With buyback rates of roughly 1 to 3 cents per kWh against retail prices around 15 cents, using your own solar (with or without a battery) is worth more than sending it to the grid.
Talk to your utility first. Interconnection rules, battery paperwork and fees vary.
Consider portable options. If you mainly want outage backup for key circuits, compare a power station with an installed battery.

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.