Skip to content

Energy Tax Credits


Overview

Energy tax credits help consumers overcome the sometimes high initial investment costs of energy-related equipment and products, including energy efficiency improvements and renewable energy systems. These credits were recently extended through federal legislation and will be included as part of the Federal Income Tax program. Further information is available from the Internal Revenue Service (IRS).

Energy Efficiency Credits

Residential

Credits are available for qualifying energy-related improvements to existing homes. Homeowners can claim purchase and installation costs, up to $500, for improvements placed in service during 2011. Equipment and products eligible for credits includes:

  • Heating, ventilation and air conditioning (HVAC) systems

  • Insulation

  • Roofs

  • Windows and doors

Note: These credits were amended and extended through December 31, 2011. Not all products in these categories will qualify for the tax credit. See the below websites for further details.

Business

Credits are also available for qualifying energy-related improvements at businesses to existing and new buildings for improvements placed in service by the end of 2013. Eligible products and equipment includes: building envelope (10%), lighting (20%) and heating and cooling systems (20%).

To find out more, visit the websites listed in the "For More Information" section at the bottom of the page.

Renewable Energy Credits

Residential

Credits are available for the installation of qualifying renewable energy systems in existing homes and new construction at 30% (no maximum) of the cost for equipment and products placed in service on or before December 31, 2016. Equipment eligible for credits includes:

  • Small wind systems

  • Fuel cells

  • Solar panels

  • Solar water heaters

(Note: not all products in these categories will qualify for the tax credit. See the below websites for further details.)

Business

Credits are also available for qualifying renewable energy systems installed at businesses: 30% for solar, fuel cells and small wind and 10% for geothermal, microturbines and CHP. These apply to systems placed in service by 2016. There is also a production tax credit (PTC), which varies by resource and type. It is a per kilowatt-hour credit for electricity generated by a qualified renewable energy facility and sold by the taxpayer to another party. Finally, a Modified Accelerated Depreciation System (MADS) allows businesses to recover investments in certain types of property, mainly equipment and structures. 

To find out more, visit the websites listed in the "For More Information" section.

For More Information

To learn more, visit the websites listed below.

Tax Incentives Assistance Project
Energy Star Tax Credits
Database of Incentives for Renewables and Efficiency
Internal Revenue Service (IRS)

Utility Rebates


Minnesota electric and natural gas utilities are required to offer rebates and other incentives for their customers to make energy-related improvements to their homes and businesses as part of the Conservation Improvement Program (CIP). Each utility tailors specific programs offered to their residential and business customers.

Residential customer rebates may include:

  • High efficiency air conditioners, furnaces, boilers and water heaters

  • High efficiency lighting products such as compact fluorescents (CFLs)

  • Whole house performance-related incentives

  • Payments to homeowners to allow services to pick and recycle old, working refrigerators and freezers

Business customer rebates may include:

  • Refrigeration system tune-ups and improvements

  • Compressed air system audits and improvements

  • High efficiency lighting retrofits

  • High efficiency chillers and other cooling equipment

  • High efficiency motors and variable speed drives

  • Custom rebates for manufacturing process improvements

Contact your local utility to learn about the latest programs or check the database of efficiency incentives.