The Inflation Reduction Act (IRA) was a piece of landmark legislation passed in August 2022. Since then, we’ve received many questions about what it means for clean energy and energy efficiency projects. In this article, we provide a brief overview of the Act and its impacts. This article is an overview of the information available through these frequently asked questions and answers by Center for Energy and Environment (CEE).
What We Know About the IRA
When the IRA was passed, it created significant opportunities for financing and rebates for energy improvements. Though it was passed in 2022, many of the implementation activities began in 2023.
In Minnesota, we had additional funding approved in 2023 for further home energy rebate programs, putting us in a unique position to have utility, City, State, and federal incentives available for electrification and energy efficiency improvements.
The Minnesota Department of Commerce will be responsible for the administration of these programs and is an excellent source for the most up-to-date information on the implementation.
Details on Available and Potential Incentives
Much of the implementation of these programs is still to be determined. Here’s what we do know:
- Tax credits are available. As of early 2025, the 25C tax credit is available, and can help offset the cost of qualified energy efficiency upgrades, including some weatherization improvements, electric heating and cooling systems, and more. If you have more improvements to make than you can claim through the 25C tax credit, we recommend starting with any weatherization projects first, then finishing projects in priority order each tax year following. Start now to maximize your savings.
- Rebates are coming soon. We expect federal energy improvement rebates to be available in 2025. They will likely focus on high-efficiency upgrades made by low- to moderate-income families, and there will be a maximum rebate amount available by home. In the meantime, we have several utility, local, and State incentives that are already available. You can find more information on current electrification rebates here.
- Tax credits and rebates will be stackable. Like many of the currently available rebates and incentives, these rebates will be able to be combined, or stacked, for more savings. We recommend talking to an electrification advisor to learn more about how you can make the most of your savings opportunities.
- Tax credits will expire in 2032. Rebates will be first come, first served. We do expect rebates to last more than one year, but we will not know for sure how long they will last until the program has started and we know how quickly funds are being distributed.
How to Prepare
Though there are still details that are up in the air about IRA implementation, we recommend getting a home energy audit now to help you prepare. An energy audit will help you determine the improvements and upgrades that will have the largest impact on your home’s energy efficiency.
Twin Cities Metro
In the Twin Cities, CenterPoint Energy and Xcel Energy offer low-cost and no-cost Home Energy Squad® visits to their customers. If you live in Hennepin, Ramsey, or Washington Counties, or Dakota County without CenterPoint Energy gas, you can schedule your visit with CEE here. If you live in Dakota County with CenterPoint Energy gas or another Minnesota county, you can schedule your visit with ICF here.
Rochester Area
In the Rochester area, Rochester Public Utilities and Minnesota Energy Resources offer low-cost energy audits as part of the Neighborhood Energy Challenge program. You can find a workshop date to learn about energy savings and schedule your visit.
Maximize Your Electrification Savings with the IRA
We do our best to provide the most updated information to our communities, but we recommend going straight to federal and State websites for real-time updates. For more information on IRA tax credits, check the ENERGY STAR website and the IRS website. For more information on the IRA Rebate programs, check the Minnesota Department of Commerce website. We also recommend reading this IRA guide from our friends at Rewiring America, which provides details on the IRA in the context of electrification.