US utility Xcel Energy launches battery storage incentive program

Minneapolis-headquratered utility Xcel Energy has launched an energy storage incentive program to the tune of $3.48 million in the US state of Minessota.

The investor-owned utility, which operates across eight Western and Midwestern states, serves half of the homes and businesses in Minnesota.

Now, customers within the utility’s service territory can access incentives for solar plus storage systems as of November 12, 2024.

Small businesses and homeowners can add a new battery storage system with a maximum capacity of 50 kWh to a new or existing solar interconnection agreement.

Xcel Energy will provide an incentive within 30 business days of operation, paying $175 per kWh of energy capacity.

Income qualified customers are eligible for an inccentive of $370 per kWh of energy capacity. A total of 10% of program budget is specifically reserved for this customer group until September 1, 2026.

The upfront incentive payment is capped at $5,000.

In addition to being charged by solar energy, eligible storage systems must be new and in process of being purchased and installed.

For customers outside Xcel Energy service areas, battery storage incentives are administered by the Minnesota Department of Commerce under the program launched earlier this year. These incentives only apply to new systems installed after August 1, 2024, and with at least a 10-year manufacturer warranty. 

According to the Department’s website, currently available incentives pay $250 per kWh with the maximim amount capped at $7,000 for storage system of 50 kWh or less installed in conjunction with on-site solar system.  

Under the Income Qualified Pilot Program, customers can claim $1,000 per kWh up to a total maximum of $15,000 per project. The remaining non-Xcel funds stand at $1.975,875, according to the Department.

Funds are limited for both incentive programs and will be administered on a first come, first served basis.

The Department of Commerce says it will have approximately $2,160,000 available for incentives and is additionally collaborating with the Tribal Advisory Council on Energy to develop a program specific for Tribal Nations.