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 have expired. As of December, 31 2025, the Energy Efficient Home Improvement (25C) tax credit is no longer available. If you completed an eligible upgrade before then, you may still claim the tax credit in the 2026 tax season, provided the upgrade meets all requirements and your tax liability is higher than the tax credit amount you intend to claim.
- Rebates are coming soon. We expect federal and state energy improvement rebates to be available in 2026. The Minnesota Department of Commerce is administering the rebates through the Save Energy Minnesota program. Several rebates will be available, including the Home Electrification and Appliance Rebates (HEAR) for electrification, the Home Efficiency Rebate Program (HOMES) for whole-home energy savings improvements, and state heat pump and electrical panel rebates.
- Rebates will be available to income-qualified households. Minnesota will be prioritizing rebates for income-qualified households using area median income (AMI). Rebates will be available for households at or below 150% AMI, with larger rebates available for households at or below 80% AMI. You may use this AMI look-up table to determine whether you qualify. In the meantime, we have several utility, local, and State incentives that are already available. You can find more information on current incentives here.
- 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.
- 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. Please note that some of the Home Efficiency Rebate Program (HOMES) will be retroactive through August 16, 2022 if the project fulfills all Department of Energy (DOE) and state requirements, but the Department of Commerce cannot yet guarantee which projects will be retroactive at this time.
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. The Home Efficiency Rebate Program (HOMES) will require an energy assessment by an approved contractor in order to model energy savings, which will determine rebate amounts. We do not have a list of approved contractors at this time, so please weigh your decision carefully if costs or duplicate work are concerns for you.
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 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.