How to Start a Solar Installation Business in Minnesota: The Residential Contractor License Rule Since 2023

If you want to sell and install solar panels on homes in Minnesota, do not start by ordering panels or filing paperwork. Since July 1, 2023, a company that contracts with a homeowner to install solar photovoltaic (PV) systems on a home must hold a Minnesota Department of Labor and Industry (DLI) residential building contractor or remodeler license. That rule is the gate. Your entity filing, your tax registration and your electrical subcontracting all fit around it.

This guide covers the steps in the order most new solar companies need them, with the fees we could verify and clear notes where you must confirm a number with the agency. It is informational content, not legal or tax advice. Solar contracts raise lien, warranty, tax and utility questions that depend on your exact setup, so talk to a Minnesota attorney and a CPA before you sign your first customer contract.

What you need before you start

Gather these items before you file anything:

• A business name you have checked against Secretary of State records (see the name rules in Step 1).
• A Minnesota street address for your registered office. A PO box alone is not accepted.
• A federal Employer Identification Number (EIN) from the IRS.
• A qualifying person who will take and pass the DLI exam and who will stand behind your license.
• A Minnesota-licensed electrical contractor, either as a partner you subcontract to or as your own licensed electrical arm.
• Budget for the DLI license fee, the Contractor Recovery Fund fee, the $50 exam fee, the Secretary of State filing fee, and local permit fees on every job.
• Your utility's interconnection application forms and the Minnesota Public Utilities Commission rules that apply to your utility.

Step 1: Choose and file your business entity

Most solar installers form a limited liability company (LLC). You file Articles of Organization with the Minnesota Secretary of State under Minnesota Statutes, Chapter 322C. The filing fee is $155 if you file online or in person, which the Secretary of State treats as expedited service. A mail filing costs $135 and is not expedited. File through Business Filings Online at mblsportal.sos.mn.gov/Business/Search.

Name rules matter for solar companies because the name goes on contracts, trucks and permit applications. Your name must contain the words limited liability company or the abbreviation LLC. It may not contain corporation, incorporated or their abbreviations. It must be distinguishable on Secretary of State records from every domestic LLC, LLP, corporation and limited partnership on file, authorized, registered or reserved in Minnesota (Minn. Stat. 322C.0108). If you need time to decide, a name reservation costs $55 and lasts 12 months, renewable in 12 month periods.

Minnesota requires a registered office, which must be a Minnesota street address. It does not have to be your main office. A registered agent is optional for a Minnesota LLC, so you can name one or serve as your own. An LLC has no publication requirement.

Your entity's tax treatment also matters. An LLC taxed as a partnership or disregarded entity passes its income to the owners, who pay the individual income tax at rates of 5.35 to 9.85 percent. An LLC that files federally as a C corporation pays the 9.8 percent corporation franchise tax, plus the minimum fee under Minn. Stat. 290.0922. Choosing between these is a tax decision, so confirm it with a CPA.

Step 2: Register with the Department of Revenue

Minnesota has no general statewide business license. Filing your entity with the Secretary of State is a filing, not a license. The Department of Revenue registration is also a tax registration, not a license. You still must register before you make taxable sales. Apply for a Minnesota Tax ID and a Sales and Use Tax account through the Department of Revenue's new business registration page at mndor.state.mn.us.

The state sales tax rate is 6.875 percent, and local sales taxes are added on top. Whether a particular equipment sale, installation charge or service fee is taxable depends on how your contract is written. Confirm that treatment with the Department of Revenue or a CPA before you publish prices.

Step 3: Confirm the DLI residential license requirement

Since July 1, 2023, a company contracting with homeowners to install solar PV on homes must hold a DLI residential building contractor or remodeler license. The rule has two effects you need to plan around. First, the homeowner who signs your contract is covered by the Contractor Recovery Fund, which is the state fund homeowners can turn to in certain cases where a licensed contractor causes a loss. Second, the license is the condition for selling the job, so you cannot treat it as something to add after the first contract is signed.

The license carries a Contractor Recovery Fund fee of $320 to $520, set by your gross receipts, and it is added to the license fee you pay DLI (Minn. Stat. 326B.89). Confirm which gross receipts band applies to your first year of projected sales with DLI, because the band can change what you pay at the start.

Step 4: Qualify a person and pass the DLI exam

Your license is tied to a qualifying person who passes the DLI exam. The exam costs $50. The exam has no experience prerequisite, so a newer company can sit for it. Start studying as soon as you choose your qualifying person, so you are ready when it is time to sit for the exam.

After the exam, complete the license application and pay the license fee and the Recovery Fund fee. DLI sets the license fee and application requirements, and those figures can change, so check the current amounts and the application forms on the DLI website at dli.mn.gov before you budget. This guide does not publish a processing time for DLI. Ask the agency directly, and plan for a gap before your first sales appointment.

Step 5: Put a licensed electrical contractor on the electrical work

The PV installation itself must be done by a Minnesota-licensed electrical contractor. A residential license alone does not let your crew do the electrical work. You have two practical paths. You can employ a licensed electrical contractor, or you can subcontract the electrical work to one. The rule does not change how a licensed residential contractor subcontracts to a licensed electrical contractor, so a subcontracting arrangement works within it.

Put the subcontract in writing. It should name the electrical contractor's license, state who pulls each electrical permit, and say who is responsible for the work to the homeowner if something fails.

Step 6: Map roof and racking work to your license specialties

Solar work splits into two kinds of trade work with different license treatment. Penetrating the roof covering to attach PV counts as roofing. Assembling the PV support system counts as a general installation specialty. In practice, the racking and the roof attachments are not the same scope, and your license has to cover both before you sell them.

Write your scope of work with each line item tagged to its specialty. Then confirm with DLI that the license you apply for covers every line. A gap here can leave you selling work you are not authorized to perform, and that is one of the most expensive mistakes a new solar company can make.

Step 7: Plan for local permits and zoning

Minnesota has 87 counties, about 853 cities and about 1,780 townships. Local government controls building permits, zoning and, in many places, business licenses by category. Minneapolis and St. Paul each license by category, and neither issues a general business license. Expect to pull permits on each job, and confirm the exact permit and inspection requirements with the building official for the city, county or township where the building sits.

Because local rules vary, build permit fees and inspection timing into each quote instead of treating them as an afterthought. If you serve more than one jurisdiction, keep a table of local requirements and check it before every new project.

Step 8: Work through net metering and interconnection

Most residential solar systems connect to the grid, and the utility must approve that connection. Check with the Minnesota Public Utilities Commission and with each utility you serve on the current interconnection application, net metering terms and any required studies. Do not quote a customer a savings figure until you have confirmed how that utility credits exported power.

Build the utility steps into your project schedule. Ask the utility when interconnection approval is issued relative to installation, and tell customers plainly in your contract what timeline to expect.

Step 9: File a trade name only if you need one

If you operate under a name other than your registered LLC name, file a Certificate of Assumed Name with the Secretary of State's Business Services office. The fee is $50 online or in person and $30 by mail. Assumed names must be published for two consecutive issues in the legal notices section of a qualified legal newspaper in the county of your principal place of business. Failure to publish may render the certificate invalid. The certificate must be renewed each year, at no charge. Start at sos.mn.gov.

Step 10: Calendar your recurring obligations

Compliance is what keeps a solar company in business after the first year. Put these dates on a shared calendar:

• LLC Annual Renewal: due December 31 every year. The fee is $0 if the LLC is active and in good standing. Missing the deadline results in termination of the LLC without further notice.
• Sales and use tax filings: follow the filing schedule the Department of Revenue assigns to your account.
• Assumed name renewal: annual, at no charge, if you use a trade name.
• DLI license renewal and Recovery Fund fee: confirm the renewal cycle and current amounts on dli.mn.gov.

Where to confirm each number

Item	Agency	Where to confirm
Articles of Organization ($155 online or in person, $135 by mail)	Minnesota Secretary of State	mblsportal.sos.mn.gov/Business/Search
Minnesota Tax ID and sales tax account (state rate 6.875 percent)	Minnesota Department of Revenue	revenue.state.mn.us
Residential license, exam ($50), Recovery Fund fee ($320 to $520)	Department of Labor and Industry	dli.mn.gov
Net metering and interconnection	Minnesota Public Utilities Commission and your utility	Your utility's interconnection page and the PUC
Local permits and business licenses	City, county or township	The local building or licensing office
Small business help	Minnesota Small Business Development Center Network	mn.gov/deed/business/help/sbdc/

Common mistakes to avoid

• Signing a homeowner contract before the license is issued. This is the mistake the rule targets. Confirm with DLI and an attorney what you may do before the license is issued.
• Treating the LLC filing as a license. The Secretary of State filing creates your entity. It does not authorize you to contract for solar installation.
• Assuming an electrical subcontractor covers everything. The electrical work can be subcontracted, but your residential license and specialties still have to cover the rest of the scope.
• Leaving roof penetrations off the scope. Roof attachments count as roofing, so a racking-only license description leaves a gap.
• Quoting savings before checking net metering. The utility and the PUC control how exported power is credited, not your sales deck.
• Using a PO box as the registered office. The Secretary of State requires a Minnesota street address.
• Missing the December 31 renewal. A missed LLC renewal terminates the entity without further notice, and reinstatement costs money and time.
• Publishing the wrong notice for an LLC. LLC and corporation formation needs no publication. Only an assumed name certificate does.

Expected results

A company that completes these steps in order may be able to sell and install residential solar in compliance with the 2023 rule. Results vary with your staffing, your local permitting, your utility's interconnection queue and how quickly your qualifying person passes the exam. This guide does not promise a launch date or a sales figure. Plan for the licensing step to take as long as DLI takes to process it, and for the utility step to take as long as your utility takes to approve interconnection.

When the setup is complete, you should be able to show a homeowner a valid DLI license, a licensed electrical contractor on the job, a scope that matches your license specialties, a permit plan for the jurisdiction and a written interconnection timeline. Those documents are what a careful homeowner and a careful lender will ask for.

Next steps and a professional check

Start with the DLI license, because it controls when you can sign your first customer. File your LLC and register with the Department of Revenue in parallel. Then confirm the local permit and utility requirements for the first territory you plan to serve.

This article is informational content, not legal or tax advice. Fees and processing details change, so confirm every figure on the agency page before you rely on it. A Minnesota attorney can review your contracts, your licensing structure and your lien and warranty terms. A CPA can advise on entity choice, sales tax and the franchise tax minimum fee. Use both before you take deposits.