As new clean energy incentives arrive, we will update this page including date-stamps within each updated section.
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2024 UPDATE
Clean Vehicle Tax Credits must be initiated and approved at the time of sale. The tax credit may be provided in the form of cash, down payment, or partial payment for the EV. Find details at IRS Transferring Clean Vehicle Tax Credits Information for Consumers [PDF].
NEW VEHICLES
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:
Find which new vehicles are eligible.
USED VEHICLE FEDERAL TAX CREDIT
You may qualify for a credit of up to $4,000 for qualified, previously-owned clean vehicles purchased in 2023 or after. Find which pre-owned vehicles are eligible.
MORE RESOURCES
The Department of Commerce created the Minnesota Electric Vehicle Rebate program which opened in February 2024. New electric vehicle owners/lessees may receive a rebate up to $2,500. Used electric vehicles owners may receive a rebate up to $600.
Drive Electric Minnesota developed a database of available and upcoming electric vehicle and charging station incentives.
The Department of Energy Savings Hub for Drivers offers information on clean vehicle incentives and eligibility.
Updated 3/5/2024
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 eligible 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 5/24/2024
Minnesota is currently designing its rebates programs and approaches. Guidance on how the rebates will be rolled out is expected later in 2024. Learn more about public engagement opportunities to share input on the program planning and design.
HOMES Rebates (Home Owner Managing Energy Savings) program is for energy saving improvements that impact the whole home or building. Households will be able to access $2,000-8,000 depending on amount of energy savings achieved and the household's income. Existing single-family homes and multifamily buildings will be eligible.
Home Electrification and Appliance Rebate Program (HEAR) will provide point-of-sales rebates to replace non-electric appliances with more efficient electric appliances, and to upgrade a home's electrical service to be ready for an increased electric demand. Up to $14,000 in rebates will be available to households with a total annual income less than 150% of the area median income. A few of the anticipated rebates include:
|
Electric Load Service Center upgrades/Breaker box - See the MN Residential Electrical Panel Grant Program for additional financial assistance. |
$4,000 |
| Electric Stove, Cooktop, Range, and/or Oven | $840 |
| Electric Wiring | $2,500 |
| Heat Pump Clothes Dryers | $840 |
|
Heat Pump Heating/Cooling - See the MN Residential Heat Pump Rebate Program for additional financial assistance. |
$8,000 |
| Heat Pump Water Heaters | $1,750 |
| Weatherization (Insulation, Air Sealing, Ventilation) | $1,600 |
MORE RESOURCES
Updated 6/17/2024
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. Find eligible heat pumps.
The Home Energy Rebates include a 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
In addition to the Home Energy Rebates, the Minnesota Residential Heat Pump Rebate Program will provide financial assistance to eligible applicants that purchase and install a heat pump for space heating and cooling in the applicants’ Minnesota residence.
Visit MN Air Source Heat Pump Collaborative to learn more about product eligibility for tax credits, plus a list of Minnesota utilities and any rebates they offer for heat pumps.
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 5/24/2024
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).
Additional grants will be available from MN's On-Site Energy Storage Systems Installation Incentives program.
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 12/15/2023
$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
Investment Tax Credit was bumped up to 30% in 2023, and applies to projects less than 1 MW, or projects more than 1 MW which meet the prevailing wage and apprenticeship requirements. If a >1 MW project does not meet those requirements, the base credit is 6%.
There are credit adders that can be stacked for additional benefit:
Note: in 2025 the Investment Tax Credit and Production Tax Credit become the "Clean Electricity Investment Credit" (a technology neutral incentive) and extends 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
In addition to federal incentives, many businesses in Minnesota also have access to Property Assessed Clean Energy (PACE) financing for solar projects.
Updated 5/23/2024
Prior to the IRA, a commercial building owner could get a tax deduction of $1.88/square foot if the renovation achieved 50% energy savings or the new construction was 50% more energy efficient over a standard energy benchmark.
The IRA lowered the required energy savings to 25% and set a sliding scale for the amount of the deduction available from $0.50/sq ft with 25% energy savings to $1/sq ft at 50% energy savings. If following prevailing wage and apprenticeship guidelines, the tax deduction can be up to $5/sq ft.
Updated 6/17/2024
Updated 6/16/2023
Updated 6/16/2023
5/21/2024 Direct Pay Tax Credits for Nonprofits webinar via the U.S. Department of Energy.
Direct (Elective) Pay Fact Sheet for Nonprofits | Clean Energy Group
Lawyers for Good Government Elective Pay resources:
Worksheets to help collect pre-filing info.
Searchable database and "Ask a Legal Question" form
Factsheets for identifying eligible projects and understanding adders/bonuses.
Clean Energy Tax Navigator helps with elective pay eligibility/requirements.
Updated 7/22/2024
Section 179D eligibility was expanded under the IRA to include buildings owned by tax-exempt organizations who can allocate the tax deduction to the building's architect, engineer, or contractor that does pay taxes, making it a negotiation point on the cost of the project and they benefit from ongoing reduced utility bills.
The required energy savings is 25% and a sliding scale sets the amount of the deduction available from $0.50/sq ft with 25% energy savings to $1/sq ft at 50% energy savings. If following prevailing wage and apprenticeship guidelines, the tax deduction can be up to $5/sq ft.
Nonprofits should get guidance from qualified professionals:
Updated 6/17/2024
Find the most recent news and updates to tax law.
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.
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.
Lists clean energy incentives based on your zip code, including utility rebates.
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.
