Clean Energy Incentives

The Inflation Reduction Act: what you need to know

Updated 11/15/2022

Resources to save you money and energy

At CERTs we share tools and resources to keep you informed on how to save energy and money with energy efficiency methods and renewable energy options. The Inflation Reduction Act of 2022 will make it easier than ever before to save money and energy, and we want to help you navigate the incentives. 

As new clean energy incentives arrive, we will update this page and include notices on our News page as well as in our Energy Stories newsletter

Questions? Feedback? Let us know!

Note: We're sharing resources to assist Minnesotans who are seeking information about federal funding opportunities. These resources are based on preliminary information released by the federal government. Program information may change as more guidance is provided by federal and state governments. For specific information on federal funding, please visit the relevant U.S. Government websites and consult with tax professionals regarding tax incentives that apply to you. 

Residential Incentives: What you need to know about...

Beginning in 2023: The energy efficient home credit for new manufactured homes will be increased to $2,500 or $5,000 if the home meets Energy Star requirements

Visit CERTs Energy Guide for Manufactured Homes

Currently: You can receive a tax credit of up to $7,500 for purchasing a new electric vehicle that is assembled in North America. It must be purchased and delivered on or before 12/31/2022. Find details at IRS.gov.

Beginning in 2023: Income-qualified households — single people making < $150,000 and married couples making < $300,000 — can receive an EV tax credit up to $7,500 if: 

  1.  The vehicle is assembled in North America. 
  2.  50% of the battery's components are manufactured or assembled in North America (increasing by 10% each year after 2023, to 100% in 2028). 
  3.  The vehicle's price complies: <$80,000 for SUVs, pickup trucks, and vans; <$55,000 for other vehicles. 

In addition, income-qualified households can receive a tax credit of up to $4,000 for previously-owned electric vehicles. The vehicle must be at least 2 years old and cost <$25,000.

Great Plains Institute has a more detailed break down.

Visit CERTs Guide to EVs

Currently: depending upon your local utility, Minnesotans can access a few different energy assessments. CenterPoint Energy and Xcel Energy customers can work with Home Energy Squad for an assessment. Income-eligible households can get these assessments for free.

In addition, if you are a Minnesota Energy Resources natural gas customer, you can request a whole home audit

Beginning in 2023: households will be able to capture a credit of up to $150 for a home energy audit. 

Beginning in 2023: 

Homeowner and Occupant Monetary Encouragement and Stability or HOMES rebate program that low- and moderate-income households will be able to access for rebates. These will be based on the estimated energy savings from retrofits and will be available for both single family and multi-family homes. 

High Efficiency Electric Home Rebate Program will provide rebates for qualified electrification projects for low- or moderate-income households. Up to $14,000 in rebates per household will be available. Rebates anticipated include:

 Electric Load Service Center upgrades  $4,000
 Electric Stove, Cooktop, Range, and/or Oven  $840
 Electric Wiring  $2,500
 Heat Pump Clothes Dryers  $840
 Heat Pump Heating/Cooling  $8,000
 Heat Pump Water Heaters  $1,750
 Insulation and Air Sealing  $1,600

 

In addition, there will be state level programs coming in 2023 to offer low- and moderate- income households rebates (instead of tax credits) for heat pumps. 

Currently: You may be eligible for a 10% tax credit of costs up to $500 (the amount varies depending on the equipment). This is true through the end of 2022 and applies to improvements on your principal residence. There had been a lifetime cap of $500. More details at EnergyStar.gov.

Beginning January 1, 2023 through 2032: The tax credit can cover up to 30% of the project. Additionally, the lifetime cap is now an annual cap of up to $1,200, or specifically for heat pumps and heat pump water heaters, up to $2,000.  

 Doors  $250/door, up to $500 total
 Insulation/Weatherization  $1,200
 Water Heaters  $600
 Windows  $600

Beginning in 2023: Tax credit of up to 30% of the cost for purchase and installation of a heat pump, up to $2000. Additionally, there are tax credits available for electric panel upgrades, which folks might need as they add more electric equipment to their homes. 

In addition, there will be a new point-of-sale rebate for people earning up to 150% of area median income that will apply to heat pumps, heat pump water heaters, and heat pump clothes dryers. The rebate has a $14,000 cap.

Visit CERTs guide to Heat Pumps

Currently: 30% tax credit for any project advanced in 2022 and will apply to projects through 2032. Projects with battery storage connected to and powered by solar also qualify.

Coming in 2023: Standalone residential energy storage systems >3kW in capacity will also qualify for a 30% tax credit (they do not need to be connected to/powered by solar). 

Visit the Homeowner's Guide to the Federal Tax Credit for Solar Photovoltaics via Energy.gov (Vea esta página web en Español.)

Visit CERTs guide to Solar Energy

Commercial Incentives: What you need to know about...

Currently: 25% grants for rural businesses and agricultural producers.

Businesses must be located in rural areas with populations of 50,000 residents or less. Agricultural producers may be in rural or non-rural areas, must have at least 50% of their gross income coming from agricultural operations.

Fiscal year 2023 application deadlines are October 31, 2022 and March 31, 2023.
More details from the USDA

Coming in 2023: 50% grants for rural businesses, farms and agricultural producers!

Eligible projects include renewable energy (e.g., solar, wind, biomass) and energy efficiency upgrades (e.g., high efficiency HVAC, insulation, refrigeration, switching from diesel to electric irrigation motors).

Currently: The current 26% Commercial Solar Investment Tax Credit is increased to 30% and extended through 2024; the 30% applies to solar projects placed in service during or after 2022.

Beginning in 2023: The base credit applies to projects <1 MW or that meet prevailing wage and apprenticeship requirements. If a project is >1 MW and does not meet those requirements, the base credit is 6%

There will also new credit adders that can be stacked for additional benefit: 

  • Up to 10% for projects that are located in "energy communities" (defined as brownfield sites, communities with high fossil fuel employment and high unemployment, and/or communities with closed coal mines or coal-fired power plants).
  • Up to 10% for solar projects <5MW located in low-income communities; applications will be required.
  • Up to 20% for solar projects < 5MW and built as part of an affordable housing project or to benefit low-income households; applications will be required.
  • Up to 10% for using US-manufactured solar products and construction material. 
  • Energy storage facilities are also eligible. 

In 2025: this provision becomes the "Clean Electricity Investment Credit"; extended through 2032 or until emission targets are reached. 

Visit Solar Energy Industries Association (SEIA) for a review of the Investment Tax Credit Extension (Section 1302), Production Tax Credit Addition (Section 1301), and Transition to New Technology Neutral Credit (Sections 13701 and 13702).

View Federal Solar Tax Credits for Businesses via Energy.gov

Note: This provision also allows a direct pay option for tax-exempt entities. More to come on this!

In addition to federal incentives, many businesses in Minnesota also have access to Property Assessed Clean Energy (PACE) financing for solar projects. 

Learn more about PACE

Local Government: What you need to know about...

Coming soon!

Hydrogen incentives and more

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