Inflation Reduction Act FAQs

The Minnesota Department of Commerce will administer state and federal rebates under the Save Energy Minnesota umbrella. This will combine federal Home Electrification and Appliance Rebates (HEAR), Home Efficiency Rebates (HOMES), and state residential rebate programs for heat pumps and electrical panel upgrades. None of these programs are available yet.

The Home Electrification and Appliance Rebates (HEAR) program (formerly known as HEEHRA) will provide rebates to income-qualified households for electrification activities, like installing air source heat pumps and heat pump water heaters, and associated upgrades, like insulation and air sealing.

The Home Efficiency Rebate program (HOMES, formerly known as HER) will support whole-home efficiency upgrades, including weatherization and air sealing, in income-qualified households.

Eligibility will be determined by household size, income, and location. Households at or below 150% AMI are being prioritized for these programs, with households at or below 80% AMI being eligible for larger rebates. The Department of Commerce maintains an area median income (AMI) look-up table to help you understand if you qualify.

Currently, the Minnesota Department of Commerce expects these rebates to be available to homeowners in 2026. Once these programs are live, they’re expected to be available through 2031 or until all funds are used, whichever is earlier. To see a full breakdown of the rebate program timeline and stay up to date, you can visit the Department of Commerce website.

No energy efficiency tax credits are currently available. If you had a qualifying improvement installed on or before December 31, 2025, you have until the 2026 tax season to claim the energy efficient home improvement (25C) tax credit. You may not receive more credit than your tax liability. For more information, including qualifying expenses and other requirements, visit the IRS website.

Yes. The rebate programs will be available until 2031 or until all the funds are used. At this point, we cannot estimate how long the funds will last, so we recommend keeping an eye on the Department of Commerce website and contacting eligible contractors early if you believe you will qualify.

Home Electrification Appliance Rebates (HEAR): No. Rebates under the HEAR program will not be retroactive. Only items purchased after the program launch will be eligible, and projects must be installed with an approved contractor.

Home Efficiency Rebates (HOMES): HOMES rebates will be available for some eligible projects initiated on or after August 16, 2022, but the Department of Commerce cannot guarantee which projects will be eligible for retroactive rebates, so we recommend waiting until more information is available before beginning an upgrade.

Area median income (AMI) will be used to determine eligibility. AMI is the midpoint of a region’s income distribution as determined by the government. In this case, the Department of Commerce determines AMI annually using data from income ranges across the state. Rebates will be available to households at or below 150% AMI, with larger rebates available for households at or below 80% AMI. Your household size and county will factor into determining eligibility. For more information on the state’s 2025 AMI, visit the Department of Commerce website.

Yes, customers will be able to combine multiple rebates, including utility rebates or other rebates available in their area. Rewiring America offers a savings calculator that includes Minnesota-based rebates, which can be used to find incentives that may be available for your projects. Depending on your circumstances, you may also be eligible for one of CEE’s statewide or city-specific loans.

The Home Electrification and Appliance Rebates (HEAR) and Home Efficiency Rebate (HOMES) programs both have household maximums for projects based on income.

For HEAR, the maximum rebate amount per household will be $14,000 for households at or below 80% area median income (AMI) and $7,000 for households at or below 150% income.

For HOMES, maximum rebate amounts will be determined by AMI and modeled energy savings. If your home needs insulation or air sealing, we always recommend focusing on that improvement first. Ensuring your home is properly insulated and air sealed is a crucial first step for any electrification project, like installing a heat pump or heat pump water heater, as these measures ensure electrified systems run at maximum efficiency.

Homeowners can prepare for the incentives that are yet to come by getting an energy assessment. Energy assessments, sometimes called audits, can test your home’s efficiency and recommend energy-saving upgrades. Depending on your utility provider and location, you may have options for how to get your visit. CenterPoint Energy and Xcel Energy customers are eligible for Home Energy Squad® visits, and income-qualified customers may be eligible for free visits. Home Energy Squad visits are provided by CEE in Hennepin, Ramsey, and Washington Counties, as well as in Dakota County for customers without CenterPoint Energy gas. Those customers are eligible for free one-on-one guidance from our energy advisors. For customers outside that area or in Dakota County with CenterPoint Energy gas, ICF will provide your visit.

Please note: The Home Efficiency Rebate (HOMES) program will require an energy assessment from an approved contractor prior to making upgrades, so you may want to wait until the approved contractor list is available if you are concerned about costs or duplicate work. You may check the Department of Commerce website for a list of approved providers for that service.

In general, when thinking about energy upgrades, we recommend that homeowners weatherize their homes first. This includes insulation and air sealing. These projects will help you prepare for any electrification projects in the future, making sure they work as efficiently as possible once installed.

Updates on Minnesota’s Save Energy Minnesota program will be available from the Department of Commerce. That page will share timelines and other updates as they’re available, and you may subscribe on that page to receive email updates from the program. We recommend only turning to trusted sources for updates on this program, as scams are likely.

In 2023, the Minnesota Legislature approved additional state funding for home energy programs. The state will offer rebates to eligible households for air source heat pump installations. Applicants must meet eligibility requirements for the Home Electrification and Appliance Rate (HEAR) program and must have received a heat pump rebate through that program.

For more information on the heat pump rebates, visit the Department of Commerce website. The state will also provide rebates for electrical panel upgrades, which will have their own eligibility requirements. More information on electrical panel upgrades is available on the Department of Commerce website.

Deciding whether to complete a project now or wait for the rebate programs will vary for everyone. The main factors to consider are how quickly you need to make the upgrade, which incentives are available to you now, and whether or not you’ll meet income guidelines for the IRA rebates. If you’re not certain, you may want to consider a home energy assessment now to determine potential projects before the rebates are available.