Minnesota Heat Pump Rebates & Incentives (2026)
Federal heat pump tax credits ended December 31, 2025. Utility rebates from Xcel Energy (up to $2,600 with insulation bonus), CenterPoint ($1,100 dual-fuel), and Minnesota Power ($400) are what's available now, plus up to $14,000 in Minneapolis city rebates. Save Energy Minnesota (HEAR + a $4,000 state rebate) has not launched. This guide covers all major Minnesota heat pump incentives available in 2026, including Xcel Energy, CenterPoint Energy, Minnesota Power, Minneapolis Green Cost Share, and the pending Save Energy Minnesota program. Here's what's actually available.
Last verified: March 22, 2026
Rates and program availability may change after this date.
Minnesota
Open
Xcel Energy offers up to $2,000 for cold-climate heat pumps (plus $600 insulation bonus). CenterPoint adds $1,100 for dual-fuel systems. Minnesota Power offers $400 for ducted ASHP. Minneapolis Green Cost Share stacks up to $14,000. Federal 25C/25D expired Dec 31, 2025. Save Energy Minnesota (HEAR + $4,000 state HP rebate) has not launched — no date set.
Sources:
The Short Version
✓ Xcel Energy rebates
Up to $2,000 for cold-climate heat pumps + $600 insulation bonus. $400–$500 for heat pump water heaters.
✓ CenterPoint + Minneapolis
CenterPoint adds $1,100 for dual-fuel systems. Minneapolis Green Cost Share stacks up to $14,000 for Green Zone homes.
✓ Total potential savings
$2,000–$3,100 (above 150% AMI) to $14,100+ (below 80% AMI, after HEAR launches). Full electrification packages with Minneapolis rebates can reach ~$17,000+ total incentives.
✗ Federal tax credits expired
Both Section 25C ($2,000) and Section 25D (30% geothermal) ended December 31, 2025. No replacement exists.
⚠ HEAR + state heat pump rebate not launched
Save Energy Minnesota (up to $8,000 HEAR + $4,000 state rebate) has no launch date. Projects completed before launch will not qualify for retroactive rebates. Utility rebates are the only option today.
Federal Tax Credits: Gone for 2026
The Section 25C Energy Efficient Home Improvement Credit and Section 25D Residential Clean Energy Credit apply only to qualifying property placed in service through December 31, 2025. The One Big Beautiful Bill Act (signed July 4, 2025) accelerated their expiration by nine years. Equipment purchased in 2025 but not installed until 2026 does not qualify. See our federal heat pump tax credit explainer for full details.
Before expiration, Minnesota homeowners could claim $2,000 for a heat pump or 30% of geothermal system costs under Section 25D. Those credits are now zero for any installation completed in 2026 or later.
Save Energy Minnesota: Not Yet Launched
As of the Minnesota Department of Commerce's February 2, 2026 update, Save Energy Minnesota has not launched. The state is waiting for formal DOE approval. There is no estimated program launch date. When it does launch, two programs will be available.
Home Electrification and Appliance Rebates (HEAR)
HEAR will provide point-of-sale rebates for heat pumps, heat pump water heaters, electric stoves, and electrical panel upgrades. Heat pump rebates will reach up to $8,000 per unit.
| Income Tier | HP Rebate Cap | Household Cap |
|---|---|---|
| Below 80% AMI | Up to $8,000 | $14,000 |
| 80–150% AMI | Up to $8,000 | $7,000 |
| Above 150% AMI | — | Not eligible |
MN Residential Heat Pump Rebate
A separate state-funded rebate of up to $4,000 for cold-climate air-source heat pumps. This is designed to stack with HEAR. You must qualify for HEAR first. Like HEAR, this program has not launched.
⚠ No retroactive rebates
Federal guidelines do not allow retroactive rebates. Any heat pump installed before Save Energy Minnesota officially launches will not qualify for HEAR or the state HP rebate. The Department of Commerce does not recommend delaying necessary repairs, but if your system still works and you may qualify by income, waiting could save $11,000–$12,000.
Utility Rebates — Available Now
Utility rebates are the primary incentive available to Minnesota homeowners today. Your electric utility (Xcel Energy, Minnesota Power, or a co-op) and gas utility (CenterPoint, Xcel Gas, or propane) determine which rebates you can access.
Xcel Energy — Statewide (Electric Service Areas)
Xcel Energy offers Minnesota's broadest utility heat pump rebate program, covering ducted systems, ductless mini-splits, ground-source, and heat pump water heaters. Rebate amounts depend on equipment type and your fuel relationship with Xcel.
| Equipment | Combo / Gas Customer | Electric Only |
|---|---|---|
| Central ASHP | $1,600 | $1,100 |
| Cold-climate ASHP | $2,000 | $1,500 |
| Ductless mini-split | $1,600 | |
| Cold-climate mini-split | $2,000 | |
| Ground-source (geothermal) | $500/heating ton | |
| Heat pump water heater | $400 (ENERGY STAR) / $500 (with Demand Mgmt) | |
"Combo" customers have both Xcel electric and Xcel gas. "Electric Only" customers have Xcel electric but heat with propane, fuel oil, or another non-Xcel fuel. Combo/Gas customers receive higher rebates. Central ASHP and ground-source rebates require installation by an Xcel participating contractor. Mini-split rebates do not require a participating contractor.
Insulation bonus: $600 extra
Xcel offers a $600 bonus if you install qualifying insulation and air sealing followed by a qualifying heat pump within two years. Applied automatically when you submit the heat pump rebate. That brings a cold-climate ASHP to $2,600 total for Combo/Gas customers.
All equipment must be listed on the AHRI directory. Cold-climate systems must also appear on the NEEP cold-climate product list with COP ≥ 1.75 at 5°F and capacity at 5°F ≥ 70% of 47°F rated capacity.
CenterPoint Energy — Dual-Fuel Only
CenterPoint is a natural gas utility, and its rebate reflects that. CenterPoint offers one heat pump rebate: $1,100 for ducted air-source heat pumps installed alongside a high-efficiency gas furnace as a dual-fuel system.
⚠ Common mistake: assuming CenterPoint covers full replacement
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. The gas furnace must be 92%+ AFUE. If you're going full-electric, CenterPoint's rebate does not apply.
| 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 |
Minnesota Power — Northeastern MN
Minnesota Power serves northeastern Minnesota (Duluth, Iron Range, Grand Rapids). Their rebate program covers ducted ASHP, geothermal, and heat pump water heaters. All require a participating contractor and ENERGY STAR certification. Rebates cannot exceed 75% of project cost.
| Equipment | Rebate | Notes |
|---|---|---|
| Ducted ASHP | $400 | ENERGY STAR certified; participating contractor required |
| Ground-source (geothermal) | $800–$1,000/ton | Must replace electric heat or new construction |
| Heat pump water heater | $300 | Must replace electric water heater |
Minneapolis Green Cost Share
Minneapolis offers bonus rebates through the Green Cost Share program that stack on top of Xcel and CenterPoint utility rebates. These are administered through the Center for Energy and Environment (CEE). Only 1–4 unit residential properties in Minneapolis qualify. Funds are first come, first served.
| Location | Max City Rebate | Requirements |
|---|---|---|
| Minneapolis — Green Zone | Up to $14,000 | Must qualify for Xcel or CenterPoint rebate first |
| Minneapolis — non-Green Zone | Up to $5,000 | Same — must qualify for utility rebate first |
Combined city + utility rebate cannot exceed total project cost. Check if you're in a Green Zone at minneapolismn.gov.
How Programs Stack
Most Minnesota homeowners outside Minneapolis will see $2,000–$3,700 in utility rebates today (depending on Xcel insulation bonus eligibility). If Save Energy Minnesota launches, income-qualifying households could see $10,000–$15,000+. Minneapolis residents can stack city rebates on top of everything. Below are realistic scenarios for a 3-ton cold-climate ducted system at $15,000 installed cost in Xcel + CenterPoint territory.
Above 150% AMI — Utilities Only (Available Now)
- Xcel cold-climate ASHP (Combo/Gas): $2,000
- CenterPoint dual-fuel: $1,100
- Xcel insulation bonus (if eligible): $600
- Federal tax credit: $0
- HEAR / state HP rebate: not eligible above 150% AMI
Realistic maximum: ~$3,700
80–150% AMI — After HEAR Launches (Not Yet Available)
- Xcel cold-climate ASHP (Combo/Gas): $2,000
- CenterPoint dual-fuel: $1,100
- HEAR (capped at $7,000 household): up to $7,000
- MN State HP Rebate: up to $4,000
Realistic maximum: ~$14,100
Below 80% AMI — After HEAR Launches (Not Yet Available)
- Xcel cold-climate ASHP (Combo/Gas): $2,000
- CenterPoint dual-fuel: $1,100
- HEAR (up to $8,000 per HP, $14,000 household cap): up to $8,000
- MN State HP Rebate: up to $4,000
Realistic maximum: ~$15,100
What you'll actually pay
On a $15,000 installed system: $11,300 to $11,900 out of pocket with today's utility rebates. If HEAR launches and you qualify at 80–150% Area Median Income (AMI), that drops to roughly $900. Below 80% AMI, the system could be free or near-free. Minneapolis Green Zone residents can stack an additional $5,000–$14,000 on top of any scenario above.
Final stacking rules between HEAR, the state HP rebate, and utility rebates have not been confirmed. The state program is "designed to be stacked" per the Department of Commerce, but specific rules depend on final DOE approval. No state loan program or state tax credit for heat pumps exists in Minnesota.
✓ Best candidates for installing now
Homeowners with failed or failing HVAC systems who can't wait for HEAR. Minneapolis residents who can stack Green Cost Share ($5,000–$14,000) with Xcel/CenterPoint. Xcel Combo/Gas customers switching to dual-fuel who also qualify for the insulation bonus ($3,700 available today). Propane or fuel oil users in Minnesota Power territory where operating cost savings are highest.
Weatherization Assistance
Minnesota's Weatherization Assistance Program (WAP) provides free energy upgrades — insulation, air sealing, and sometimes heating system repairs — for income-qualifying households. WAP is administered through local community action agencies and does not need to be repaid.
Eligibility is generally at or below 200% of the federal poverty level. Contact your local community action agency or call the Minnesota Department of Commerce energy helpline. Weatherization improvements can reduce heating costs and improve comfort, making a future heat pump installation more effective. If you pair WAP upgrades with a heat pump later, the combined savings are significant — especially in Minnesota's cold climate where proper insulation and air sealing directly affect heat pump performance.
Climate Context: Cold-Climate Territory
Minnesota is one of the coldest states in the lower 48, making cold-climate heat pump specifications essential. About 66% of Minnesota homes heat with natural gas, with propane and fuel oil significant in rural areas outside the gas pipeline network. This is why the dual-fuel approach (heat pump + gas furnace) is particularly popular and why CenterPoint's program specifically targets this configuration.
| Location | Design Temp (99%) | Climate Zone |
|---|---|---|
| Minneapolis–St. Paul | -12°F | 6A (Cold, Moist) |
| Duluth | -21°F | 7 (Very Cold) |
| International Falls | -31°F | 7 (Very Cold) |
Cold-climate heat pumps qualifying for Xcel's top-tier rebate must have a COP ≥ 1.75 at 5°F — but Minnesota's design temperatures go well below that. Backup heat (typically a gas furnace in a dual-fuel setup) remains essential for reliable comfort during the coldest stretches.
For homeowners considering battery storage alongside a heat pump, see our guide to home batteries in 2026.
How to Apply
Identify your utilities
Your electric utility (Xcel Energy, Minnesota Power, or a co-op) and gas utility (CenterPoint, Xcel Gas, or propane) determine which rebates you can access.
For Xcel central/ground-source: use a participating contractor
Find one at HVACree.net/Xcel. Mini-split rebates do not require a participating contractor.
Confirm cold-climate specs for top-tier rebate
For the $2,000 rebate, verify your system is on the NEEP cold-climate product list with COP ≥ 1.75 at 5°F.
Submit rebates after installation
Xcel: apply at xcelenergy.com/digital_application (deadline: Sept 30 of the following year). CenterPoint: dealer submits via form CNP-1375 (deadline: Dec 31 of installation year). Minnesota Power: contractor files on your behalf (8–10 weeks processing).
Minneapolis residents: apply through CEE for city bonus
The Green Cost Share bonus is applied after your utility rebate qualifies. Contact CEE at mncee.org.
What to Watch
Save Energy Minnesota launch
No date set as of February 2, 2026. Monitor mn.gov/commerce for the official announcement. Projects before launch don't qualify for HEAR.
MN Residential Heat Pump Rebate ($4,000)
Designed to stack with HEAR. Expected to launch at the same time or shortly after Save Energy Minnesota goes live.
IRA funding runway
Federal HEAR and HOMES funding was appropriated under the IRA. If political conditions change or funding is redirected, programs that have not yet launched could be affected. Monitor federal developments alongside state announcements.
Minneapolis Green Cost Share funding
Funds are first come, first served. If you're in Minneapolis, check availability before committing to a project timeline.
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 (plus a $600 insulation bonus). CenterPoint offers $1,100 for ducted heat pumps paired with a gas furnace. Minnesota Power offers $400 for ducted systems. Minneapolis residents can stack up to $14,000 in additional city rebates. Federal 25C/25D tax credits ended December 31, 2025. The state HEAR program and MN Residential Heat Pump Rebate ($4,000) have not launched.
Can I combine Xcel and CenterPoint heat pump rebates in Minnesota?
Yes — if you have Xcel electric service and CenterPoint gas service, you can stack both utility rebates on a qualifying dual-fuel system for up to $3,100 combined. The system must meet both programs' requirements, including CenterPoint's dual-fuel pairing with a 92%+ AFUE gas furnace with switchover at 40°F or lower.
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. The state is waiting for formal DOE approval. There is no estimated launch date. Federal guidelines do not allow retroactive rebates for installations before launch. A separate state Residential Heat Pump Rebate of up to $4,000 is designed to stack with HEAR but also has not launched.
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.
What is the Minneapolis Green Cost Share program?
Minneapolis offers bonus rebates through the Green Cost Share program that stack on top of Xcel and CenterPoint utility rebates. Homes in a designated Green Zone can receive up to $14,000 for energy improvements. Homes outside a Green Zone can receive up to $5,000. Projects must qualify for a CenterPoint or Xcel rebate first. Only 1-4 unit residential properties in Minneapolis qualify.
Who administers Minnesota's heat pump rebate programs?
Utility rebates are administered directly by Xcel Energy, CenterPoint Energy, and Minnesota Power. Minneapolis city rebates are administered through the Center for Energy and Environment (CEE). The pending Save Energy Minnesota program (HEAR + state HP rebate) will be administered by the Minnesota Department of Commerce. Weatherization assistance is coordinated through local community action agencies.
Sources
Disclaimer: This page covers the main statewide, utility, and IRA heat pump incentives available to Minnesota homeowners in 2026. It does not calculate savings, guarantee eligibility, or represent any incentive program. Co-op rebates (e.g., Dakota Electric, Lake Region Electric) vary and are not individually listed. We verify status regularly but programs can change without notice. Always confirm current amounts and eligibility with your utility, the Minnesota Department of Commerce, and your contractor before making decisions.
See how this state compares → Heat Pump Rebates by State (2026)