Electrification Incentives
If you’ve ever considered purchasing an electric vehicle, installing solar, or switching to a heat pump, now’s the time to do it !
With the passage of the so-called "One Big, Beautiful Bill" in July of 2025, many popular clean energy incentives that American households and businesses have used to save thousands of dollars will soon expire.
These can be big ticket items and not everyone can afford them. For those who can, using federal incentives now means you’ll save real money upfront – and save on utility, maintenance, and transportation costs for years.
A nice summary can be found here. Additional details can be found on the CERTs and Fresh Energy websites.
​TABLE OF CONTENTS
This webpage provides an overview of:
Tax credits, rebates and incentives to reduce carbon emissions, improve comfort, protect health and save you money!
Last updated July 25, 2025.
Note: This document does not constitute professional tax advice, nor should it be used as the only source of information when making decisions. This document was pieced together from various government documents, articles and webinars, and is subject to revision. Hopefully it will provide you with enough information to get started. While we believe it to be accurate, we cannot guarantee its accuracy. Consult with your tax experts, for IRS guidance.
Here is a brief recap of the Tax Credits for Households which are about to expire:
Tax Credits
Thanks to the Inflation Reduction Act, 30% of the cost of solar panels, battery storage, geothermal heat pumps and more can be deducted from your federal taxes. There are also tax credits for energy efficient windows, doors, insulation and more. Act now, before the tax credits expire.​​​​​
Electric Vehicle Incentives
The Inflation Reduction Act provides a tax credit that can significantly reduce the cost of a new, used or leased electric vehicle. Save up to $7,500 on a new EV, or $4,000 on a used EV!
​Details as to which electric and plug-in hybrid vehicles are eligible for the tax credit can be found at dealers and at: https://fueleconomy.gov/feg/tax2023.shtml
To compare of the actual prices and features of the various models, visit:
https://www.shift2electric.com/evinfolist/
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Zero Emission Volkswagen ID.4
Zero Emission Tesla Model 3
​​​​​​Rebates are often available as well:
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Note that there are also utility, manufacturer, municipal, county, and even state rebates for some items. Check with your store or contractor and/or search online. For example: https://mn.my.xcelenergy.com/s/residential/home-rebates
​As of July 25, 2025, most of the State of Minnesota’s Energy Rebates have yet to launch. The original proposal was that they would include items such as an Electric Panel Upgrade, Electric Wiring, Air Source Heat Pump, Ground Source Heat Pump, Heat Pump Dryer, Induction Cooktop, Heat Pump Water Heater, Insulation and Air Sealing Materials, and more. Indications towards the end of 2024 were that the initial focus would be on weatherization. However, with the federal changes, it has been unclear as to where things stand. For updates, visit the Minnesota Department of Commerce website by clicking here. ​​​
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Plan your next step!
Although the tax credits will soon expire, note that you don’t have to do everything at once.
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Start with an energy audit. (See the next section.) Then complete the audit's recommendations..
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If you have gas appliances that are nearing end of life, or a car that needs replaced, explore the available options now.
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Have an electrician check your breaker box for capacity. Perhaps you need to upgrade your electric service before you get that electric car or heat pump.
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Before replacing your furnace, it makes sense to make sure that your home is adequately weatherized.
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Perhaps you need to replace your roof before adding solar panels.
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If you want, start small, perhaps adding insulation or obtaining a heat pump water heater.
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Energy Audits
Energy efficiency is the cheapest and fastest way to reduce your energy use (saving you money, while reducing emissions). Make sure that your home is well insulated and weatherized before installing a heat pump system. An easy way to get started is to schedule a home energy audit.
Many utilities offer this service. For example, Xcel Energy and CenterPoint Energy customers can schedule a home energy audit through the Home Energy Squad, a program that the Center for Energy and Environment administers for the utilities. They currently charge $70 for a newer home, and $100 for a home built before 2000. Further details can be found at: https://www.mncee.org/home-energy-squad.
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Depending on your location and income, some households will qualify for free or lower cost energy audits. In addition, in many cases, 30% of the cost (up to $150) can be taken as a federal tax credit. However that tax credit now expires on 12/31/2025.
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Additional Resources: (*** = A great place to start)
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Center for Energy and Environment (Energy Audits)
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Clean Energy Resource Teams: *** The Inflation Reduction Act: What you need to know
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(Enter Zip. Includes project costs, Federal Tax Credits, and even Utility Rebates)
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Xcel Energy's Renewable*Connect Program Get your electricity from the Sun & wind​