Paying for it

Utility Rebates & Tax Incentives

Ask your utility about efficiency rebates, which might include:

Several Utilities in Minnesota offer rebates or incentives for the installation of solar PV systems, listed below.

Some utilities may also cover other renewable energy options, like solar thermal, geothermal, or biomass.

Federal Tax Credits

Federal Residential Renewable Energy Tax Credit:

30% tax credit for any project advanced in 2022 and will apply to projects through 2032. Standalone residential energy storage systems >3kW in capacity also qualify for a 30% tax credit (they do not need to be connected to/powered by solar). 

For residents considering a solar energy system (PV or hot water), small wind system, ground source heat pump, or other eligible systems, now is a great time to install it. The current tax credit means a taxpayer may claim a credit of 30% of qualified expenditures for a system that serves a dwelling unit located in the United States that is owned and used as a residence by the taxpayer. 

Business Energy Investment Tax Credit (ITC):

Currently: 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: 

  • 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.

Beginning in 2023 through 2032: The overall total limit for an efficiency tax credit in one year is $3,200. 

This breaks down to a total limit of $1,200 for any combination of home envelope improvements (windows/doors/skylights, insulation, electrical) plus 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.

Visit our Guide to the Inflation Reduction Act for more details on tax credits and rebates.