Home / Heat Pumps / Minnesota
Minnesota Heat Pump Rebates 2026: What's Actually Available
There are no federal residential heat pump tax credits in 2026. Here's what Minnesota homeowners can actually use right now — and what's coming.
Last updated: March 16, 2026
Minnesota
Open
Minnesota utility heat pump rebates are active and available now. Xcel Energy, CenterPoint Energy, Minnesota Power, and electric co-ops all offer rebates through their CIP programs. Several cities offer additional stacking rebates. Federal tax credits (25C/25D) ended December 31, 2025. The state HEAR/HOMES program has not launched.
Minnesota heat pump rebates in 2026 are primarily coming from utilities, not the federal government. Xcel Energy currently offers the broadest utility rebate program, CenterPoint Energy offers a narrower dual-fuel rebate, and Minnesota's income-based state rebate programs have not yet launched.
Last verified: March 16, 2026
Minnesota Heat Pump Rebates at a Glance
Minnesota homeowners installing a heat pump in 2026 may qualify for utility rebates and, when available, future state rebates:
- •Up to $2,000 from Xcel Energy — cold-climate air-source heat pumps receive the highest rebates
- •$1,100 from CenterPoint Energy — for ducted heat pumps paired with a high-efficiency gas furnace
- •Pending state programs — the Minnesota HEAR program has not yet launched as of March 16, 2026
Federal Heat Pump Tax Credit
The IRS states that the Energy Efficient Home Improvement Credit (Section 25C) applies to qualifying improvements placed in service between January 1, 2023 and December 31, 2025. Qualifying heat pumps were eligible for a credit equal to 30% of project cost, up to $2,000 per year.
For heat pumps installed in 2026 or later, the IRS does not list the credit as available. The IRS's One, Big, Beautiful Bill provisions page confirms: the 25C credit is "not allowed for any property placed in service after Dec. 31, 2025."
The Residential Clean Energy Credit (Section 25D), which previously applied to geothermal heat pumps, is also not available for expenditures made after December 31, 2025, according to the current IRS guidance.
Sources: IRS — Energy Efficient Home Improvement Credit | IRS — Residential Clean Energy Credit | IRS — One, Big, Beautiful Bill Provisions
Xcel Energy Heat Pump Rebates (Minnesota)
Xcel Energy offers Minnesota's broadest utility heat pump rebate program, covering ducted systems, ductless mini-splits, and ground-source heat pumps. Rebate amounts depend on equipment type and your fuel relationship with Xcel.
Rebate Amounts
| Equipment | Combo / Gas Customer | Electric Only |
|---|---|---|
| Central air-source heat pump | $1,600 | $1,100 |
| Cold-climate air-source heat pump | $2,000 | $1,500 |
| Ductless mini-split | $1,600 | |
| Cold-climate mini-split | $2,000 | |
| Ground-source (geothermal) | $500 per heating ton | |
| Heat pump water heater | $400 (ENERGY STAR) / $500 (with Demand Mgmt) | |
"Combo" customers have both Xcel electric and Xcel gas service. "Electric Only" customers have Xcel electric service but use a non-Xcel fuel source (propane, fuel oil, etc.) for heating. Xcel offers higher rebate amounts for Combo / Gas customers than for Electric Only customers.
Insulation bonus: Xcel offers a $600 bonus if you install qualifying insulation and air sealing followed by a qualifying heat pump within two years. The bonus is applied automatically when you submit the heat pump rebate application.
Eligibility
- ✓Must have residential electric service from Xcel Energy (for heat pump rebates) or residential gas service (for furnace rebates)
- ✓Single-family homes, duplexes, and four-plexes
- ✓Central ASHP and ground-source rebates require Quality Installation by an Xcel participating contractor
- ✓Mini-split rebates do not require a participating contractor
Equipment Requirements
All equipment must be listed on the AHRI directory. Cold-climate heat pumps must additionally appear on the NEEP cold-climate product list and meet cold-climate specifications: COP ≥ 1.75 at 5°F, with maximum capacity at 5°F at least 70% of capacity at 47°F.
How to Apply
- 1. Install a qualifying system. For central and ground-source heat pumps, use an Xcel participating contractor.
- 2. Submit a rebate application through Xcel's digital application portal (approximately 14 minutes) or mail form 24-01-506.
- 3. Applications must be postmarked by September 30 of the year following installation.
- 4. Processing takes up to 8 weeks. Rebates are paid by check, bill credit, or direct deposit.
Source: Xcel Energy Minnesota 2024–2026 Residential Rebate Summary (PDF)
CenterPoint Energy Heat Pump Rebates (Minnesota)
CenterPoint Energy is a natural gas utility, and its rebate program reflects that. CenterPoint offers one heat pump rebate — for ducted air-source heat pumps installed alongside a high-efficiency gas furnace as a dual-fuel system.
Important: CenterPoint does not rebate mini-splits, ground-source systems, or any heat pump that replaces gas heating entirely. The heat pump must be programmed to switch to the gas furnace at 40°F or lower.
Rebate Amounts
| Scenario | Rebate | Requirements |
|---|---|---|
| Existing home | $1,100 | HSPF2 ≥ 7.8; paired with ≥ 92% AFUE gas furnace |
| New construction | $400 | Same efficiency requirements; paired with new gas furnace |
Eligibility
- ✓Active Minnesota residential natural gas account with CenterPoint
- ✓Single-family homes, townhomes, and two- to four-plexes
- ✓Heat pump and furnace must be listed as a system on the AHRI directory
- ✓No specific contractor certification required
How to Apply
- 1. Install a qualifying ducted ASHP paired with a qualifying gas furnace.
- 2. Your heating dealer typically submits the rebate through CenterPoint's dealer portal or by mailing form CNP-1375 (PDF).
- 3. Applications must be submitted by December 31 of the installation year.
- 4. Processing takes 8–10 weeks. The rebate check expires 90 days from issuance.
Source: CenterPoint Energy — MN Ducted Air Source Heat Pump Rebate
Minnesota State Heat Pump Rebates (HEAR Program)
Not yet available
As of the Minnesota Department of Commerce's February 2, 2026 update: "Save Energy Minnesota has not launched yet. Minnesota is waiting for formal approval from US Department of Energy to launch the program. There is no estimated program launch date."
When launched, HEAR eligibility and rebate amounts will vary based on household income relative to area median income (AMI). Minnesota has also approved a separate state Residential Heat Pump Rebate program that is structured to work alongside HEAR, subject to final program rules.
Important: The Minnesota Department of Commerce states that federal guidelines do not allow retroactive rebates. Installations completed before the program launches will not qualify for HEAR. The Department does not recommend delaying necessary repairs, but homeowners planning ahead should be aware of this limitation.
If you may be income-qualified and can wait, monitoring the HEAR launch could save significant money. If you need a system now, utility rebates from Xcel Energy and CenterPoint Energy are available today.
Can Minnesota Heat Pump Rebates Be Combined?
In many cases, yes. Here's how the available incentives can potentially stack for Minnesota homeowners.
Xcel Electric + CenterPoint Gas Customers
Homeowners with both Xcel electric and CenterPoint gas service can potentially stack both utility rebates on a qualifying dual-fuel cold-climate heat pump system:
- Xcel Energy cold-climate ASHP rebate$2,000
- CenterPoint dual-fuel rebate$1,100
- Combined utility rebates$3,100
The system must meet both programs' requirements: Xcel's cold-climate specs (NEEP listed, COP ≥ 1.75 at 5°F) and CenterPoint's dual-fuel requirement (paired with ≥ 92% AFUE gas furnace, switchover at 40°F or lower). Final eligibility depends on meeting both utilities' equipment and application requirements.
What About Future State Programs?
CenterPoint's program terms state that their rebate is "independent of any state, electric utility, or co-op rebate offers." The Minnesota Department of Commerce has indicated that the state Residential Heat Pump Rebate is "designed to be stacked with the federal rebates." When the HEAR program launches, combining state and utility rebates may be possible, but specific stacking rules have not been finalized.
We will update this section when the program launches and stacking rules are confirmed.
How to Apply for Heat Pump Rebates in Minnesota
The process depends on your utility provider. Here are the key steps and links for each program.
Xcel Energy Customers
- 1. Find a participating contractor at HVACree.net/Xcel (required for central and ground-source systems)
- 2. Install qualifying equipment
- 3. Apply online at xcelenergy.com/digital_application
- 4. Deadline: September 30 of the year after installation
No pre-approval needed. Processing: ~8 weeks.
CenterPoint Energy Customers
- 1. Install qualifying ducted ASHP + gas furnace system
- 2. Your dealer submits the rebate via form CNP-1375
- 3. Deadline: December 31 of the installation year
Processing: 8–10 weeks. Rebate check expires 90 days from issuance.
Frequently Asked Questions
What heat pump rebates are available in Minnesota in 2026?
Utility rebates are the primary incentive. Xcel Energy offers up to $2,000 for cold-climate air-source heat pumps. CenterPoint offers $1,100 for ducted heat pumps paired with a gas furnace. The federal Section 25C and 25D tax credits are not available for property placed in service after December 31, 2025, according to current IRS guidance.
Can I combine Xcel and CenterPoint heat pump rebates?
If you have Xcel electric service and CenterPoint gas service, you can potentially stack both rebates on a qualifying dual-fuel system — up to $3,100 combined. The system must meet both programs' requirements, including CenterPoint's dual-fuel pairing with a high-efficiency gas furnace. Final eligibility depends on meeting both utilities' equipment and application requirements.
Does CenterPoint rebate heat pumps that replace gas heating?
No. CenterPoint's sole heat pump rebate requires the heat pump to be paired with a high-efficiency gas furnace as a dual-fuel system. The heat pump must switch to the gas furnace at 40°F or lower. Mini-splits, ground-source systems, and full-electric replacements are not eligible.
Are federal heat pump tax credits available in 2026?
The IRS states that the Energy Efficient Home Improvement Credit (Section 25C) applies to qualifying improvements placed in service through December 31, 2025. The Residential Clean Energy Credit (Section 25D), which covered geothermal heat pumps, is also not available for expenditures made after December 31, 2025. For 2026 installations, no federal heat pump tax credit is currently listed as available by the IRS.
Are geothermal heat pump tax credits still available?
The IRS currently states that the Residential Clean Energy Credit (Section 25D) is not available for property placed in service after December 31, 2025. This means the 30% geothermal tax credit is no longer available for new installations in 2026.
Has Minnesota's HEAR rebate program launched?
No. As of the Minnesota Department of Commerce's February 2, 2026 update, Save Energy Minnesota has not launched yet, the state is waiting for formal DOE approval, and there is no estimated launch date. Federal guidelines do not allow retroactive rebates for installations completed before the program launches.
What is the Xcel Energy insulation bonus?
Xcel offers a $600 bonus if you install qualifying insulation and air sealing followed by a qualifying heat pump within two years. The bonus is applied automatically when you submit your heat pump rebate application.
What is a cold-climate heat pump?
A cold-climate heat pump is designed to maintain heating capacity at low temperatures. For Xcel's rebate, it must appear on the NEEP cold-climate product list, have a COP of at least 1.75 at 5°F, and maintain at least 70% of its rated capacity at 5°F compared to 47°F.
Sources: IRS.gov (25C, 25D, OBBB provisions), Xcel Energy MN 2024–2026 Rebate Summary, CenterPoint Energy MN Ducted ASHP Rebate page, Minnesota Department of Commerce HEAR program page. All information verified as of March 16, 2026. Rebate programs can change without notice — verify current terms with your utility before purchasing equipment.