Residential Heat Pump Rebate Program

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Overview

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. Heat pumps for clothes drying or water heating are excluded from this state rebate program.

Eligibility

The eligibility requirements of the Minnesota Residential Heat Pump Rebate Program are set forth in Minn.Stat.Sec.216.46.

Eligibility – Individuals 

• The applicant has met eligibility requirements and received/applied for a heat pump rebate available from the U.S. Department of Energy under the Inflation Reduction Act of 2022 (Home Energy Rebates). Note that this program is still under development. Minnesota will align requirements for the federal and state rebate programs when possible.
• The applicant owns the Minnesota residence where the heat pump will be installed.
• The applicant has had an energy audit conducted within the last 18 months by a certified Building Analyst Technician issued by the Building Performance Institute, or an allowable certification that is announced at the launch of the program.
• Either:
  • The applicant has installed in the applicant’s residence the amount of insulation and the air sealing measures recommended by the auditor, or 
  • The auditor has otherwise determined that the amount of insulation and air sealing measures in the residence are sufficient to enable effective heat pump performance.
• Any other requirements set forth in the federal Home Energy Rebate Program. Visit the Home Energy Rebates page to learn more.

Eligibility – Multifamily buildings

The statute requires that the heat pump be installed in the applicant’s Minnesota residence. The eligible applicant must own and reside in the home or multi-family unit where the heat pump is installed. Multi-family housing units where the owner does not reside is not eligible for the program. 

Eligibility – Equipment

"Heat pump" means a cold climate rated air-source heat pump composed of:

• A mechanism that heats and cools indoor air by transferring heat from outdoor or indoor air using a fan
• A refrigerant-filled heat exchanger
• An inverter-driven compressor that varies the pressure of the refrigerant to warm or cool the refrigerant vapor

Further requirements:

• The applicant has purchased a heat pump of the capacity recommended by the auditor or contractor AND also is on the Approved Product List (to be determined)
• The heat pump has been installed by a contractor on the qualified contractor list (to be determined)

Below is a list of technologies which are not eligible for the state rebate program but allowed under the federal program:

• Air-to-water heat pumps
• Ground source heat pumps
• Heat pump dryers
• Heat pump water heaters

Rebate amounts

The rebate amount will be the lesser of:

• $4,000, or
• The total cost to purchase and install the heat pump MINUS rebate amount from the federal Home Energy Rebate and other rebate programs.

Timeline

This program will begin at the same time, or after the launch of the federal Home Energy Rebate Program, which has not yet launched. Visit Minnesota’s Home Energy Rebates page to learn more about projected timelines of these federal programs, referred to as HOMES and HEAR. 

For those installing heat pumps before the program launch, the Department of Commerce does not recommend delaying necessary repairs. However, to be eligible for the State Residential Heat Pump Rebate Program, individuals must first be approved for one of the federal HOMES or HEAR rebates for a heat pump. The HEAR program will not approve retroactive rebates. Federal guidelines allow the HOMES program to consider retroactive rebates for projects initiated on or after the date the Inflation Reduction Act passed (August 16, 2022), but funding is not available yet. Until program design is complete for the HOMES rebate, we cannot guarantee who will qualify for a retroactive rebate when we begin providing rebates. 

What can you do now?

• Learn more about the Federal High-Efficiency Electric Home Rebate Act that the Minnesota program is tied to here: The Inflation Reduction Act: what you need to know (Clean Energy Resource Teams).
• Learn about heat pump technology.
• Learn about Area Median Income: eligibility and rebate amounts vary based on an applicant’s total household income. Check if your total household income is at or below 80% or 150% of Area Median Income (AMI) for your county by using the Commerce-provided Area Median Income Look-Up Table (.pdf) that references county and household size.

Contact Residential.Rebates.COMM@state.mn.us with questions.

*NOTICE: The Minnesota Department of Commerce is asking you to provide your email address for notification purposes regarding Division of Energy Resources programs. The data will be shared with those employees within Commerce and its contractors whose work assignment requires access the data. You are not required, and may refuse, to provide your email address. If you refuse, Commerce will be unable to provide you with upcoming information about Division of Energy Resources programs. If you supply your email address, Commerce may send you updates via your email. The data you provide may be shared as authorized by law or if a court orders that it be produced.