As new clean energy incentives arrive, we will update this page including date-stamps within each updated section.
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We created slides, handouts, and other resources to help you spread the word about the clean energy incentives within the Inflation Reduction Act. Sign up to be an ambassador and you'll receive updates about rebates, tax credits, and new tools you can share.
NEW VEHICLE FEDERAL TAX CREDIT
You may qualify for a credit up to $7,500 if you buy a new, qualified plug-in EV or fuel cell electric vehicle. Your modified adjusted gross income may not exceed:
April 2023 Update: new critical mineral and battery component requirements must be met in order to qualify for the full $7,500:
Find which new vehicles are eligible.
USED VEHICLE FEDERAL TAX CREDIT
You may qualify for the Used Clean Vehicle Credit, a tax credit up to $4,000 for qualified, previously-owned clean vehicles purchased on or after January 1, 2023.
Find which pre-owned vehicles are eligible.
MORE RESOURCES
The Department of Commerce created the Minnesota Electric Vehicle Rebate program web page to feature updates when the program is ready.
Visit the Department of Energy Savings Hub for Drivers for more information on clean vehicle incentives and eligibility.
Updated 7/11/2023
Households can capture a 30% tax credit, of up to $150 for a home energy audit.
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.
NOTE to receive Residential Energy Tax Credits you'll submit IRS Form 5695 when filling your 2023-2032 taxes, if you meet the requirements detailed on IRS.gov.
Learn more about Energy Audits and Benchmarking
Updated 5/1/2023
Beginning now, in 2023 through 2032: The overall total limit for an efficiency tax credit in one year is $3,200.
This breaks down to an annual limit of $1,200 for any combination of home envelope improvements (windows/doors/skylights, insulation, electrical) plus eligible furnaces, boilers and central air conditioners.
Any combination of heat pumps, heat pump water heaters, and biomass stoves/boilers are subject to an annual total limit of $2,000.
NOTE to receive Residential Energy Tax Credits you'll submit IRS Form 5695 when filling your 2023-2032 taxes, if you meet the requirements detailed on IRS.gov.
MORE TAX CREDIT RESOURCES
Updated 5/1/2023
Guidance on how home energy rebates will be implemented isn't expected until 2024.
Home Efficiency Rebates (also called 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 energy updates, and will be doubled for households with low income.
Home Electrification and Appliance Rebate (also called HEAR, formerly HEEHRA) will provide point-of-sales 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/Breaker box | $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 |
| Weatherization (Insulation, Air Sealing, Ventilation) | $1,600 |
Visit ENERGY STAR's rebate finder for current rebates.
Updated 8/7/2023
Tax credit of up to 30% of the cost for purchase (between Jan. 1, 2023 and Dec. 31, 2032) and installation of a heat pump, up to $2000.
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.
MORE RESOURCES
The Department of Commerce created the Minnesota Residential Heat Pump Rebate program web page to feature updates when the program is ready.
Visit MN Air Source Heat Pump Collaborative to learn more about product eligibility for tax credits.
Visit the ENERGY STAR Rebate Finder.
NOTE to receive Residential Energy Tax Credits you'll submit IRS Form 5695 when filling your 2023-2032 taxes, if you meet the requirements detailed on IRS.gov.
Updated 8/7/2023
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.
As of 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.)
NOTE to receive Residential Energy Tax Credits you'll submit IRS Form 5695 when filling your 2023-2032 taxes, if you meet the requirements detailed on IRS.gov.
Visit CERTs guide to Solar Energy
Updated 5/1/2023
$2,500 available for ENERGY STAR certified manufactured homes meeting the most recent ENERGY STAR Manufactured New Homes program requirements (currently Version 2, with Version 2.1 currently proposed to be implemented in May 2023).
Visit CERTs Energy Guide for Manufactured Homes
Updated 1/9/2023
REAP is undergoing big changes due to new funds from the IRA.
REAP will host six quarterly competitions throughout the remainder of FY 2023 and FY 2024 to distribute the allocated funding ($1.05 billion):
Now 50% grants for rural businesses, farms and agricultural producers, with the maximum grant size increased to $500,000 for energy efficiency projects and to $1 million for renewable energy systems!
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.
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).
Get the latest criteria and program updates.
Updated 5/9/2023
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.
Coming 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:
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
View IRS Credits and Deductions Under the Inflation Reduction Act
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.
Updated 5/9/2023
Updated 6/16/2023
Updated 6/16/2023
Updated 7/11/2023
Find the most recent news and updates to tax law.
Find IRA tax credits or rebates by activity, as well as incentives coming in 2023.
Tax credit and rebates listed for each appliance, EV, and home improvement option.
Federal income tax credits and incentives for energy efficiency for home owners, builders, and commercial building owners.
Insight for Minnesotans on new state funding for energy opportunities and programs, including details on the new rebates, grants and other programs as they are developed by Commerce.
Free tool to estimate how much money you could save with the IRA.
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.
