Minnesota Heat Pump Rebates

Minnesota heat pump rebates that are open right now pay as much as $1,040 per ton with Otter Tail Power, or up to $2,000 from Xcel Energy. The exact amount, and the rules you follow to claim your payment, come from your electric or natural gas utility.

Find the Minnesota rebates for your ZIP code

Free, no sign-up. Nobody will contact you unless you ask for installer quotes.

If JavaScript is off, look for your state in the programs table.

Cold-climate heat pump outdoor unit on a wall bracket beside a clapboard house in light snow, the kind of install Minnesota heat pump rebates help pay for
Top standard rebate available
$2,000 Xcel Energy Minnesota Heat Pump Rebates, for Northern States Power Co - Minnesota customers
HEAR appliance rebates
Has not launched Run by Minnesota Department of Commerce. Official page
HOMES whole-home rebates
Not open yet Paid on the energy saved by a whole-home upgrade. Official page
The 25C federal tax credit
Ended No credit for heat pumps installed after 31 December 2025

Minnesota heat pump rebates

Check which utility serves your home with electricity or natural gas, then match programs to it to see what you can claim today.

ProgramWho can get itCentral heat pumpDuctless mini-splitHeat pump water heaterStatusApply
Xcel Energy logoXcel Energy Minnesota Heat Pump RebatesServed by Northern States Power Co - MinnesotaCombo and Natural Gas Only customers get $2,000; Electric Only customers get $1,500$2,000$400; it rises to $500 if you are eligible to enroll in Demand ManagementOpenOfficial page
Rebates from Minnesota Power for Air Source Heat Pumps and Heat Pump Water HeatersServed by ALLETE, Inc.$1000 Rebate$1000 Rebate$300OpenOfficial page
Otter Tail Power Minnesota Heat Pump RebatesServed by Otter Tail Power Co$800 per ton; with Quality installation and a controlled rate, the total potential reaches $1,040 per ton$600 per ton; total potential $840 per tonNoneOpenOfficial page
Rebate from Lake Country Power for Central Air Source Heat PumpsServed by Lake Country Power$1000 rebateNoneNoneOpenOfficial page
Air Source Heat Pump Rebate from Connexus Energy (Residential Quality Installation Program)Served by Connexus EnergyUp to $1,000NoneNoneOpenOfficial page
Rebate for a Ducted Air Source Heat Pump, from CenterPoint Energy in MinnesotaCenterPoint Energy gas customersUp to $1,100NoneNoneOpenOfficial page
Minnesota Residential Heat Pump Rebate Program (state)Everyone in the stateThe lesser of $4,000 or the cost after federal and other rebates (income-qualified)NoneNonePausedOfficial page

Claiming Your Utility Minnesota Heat Pump Rebates

Most utilities make you follow their contractor rules before work starts, or you can lose your payment.

  • Verify your electric or natural gas service through Xcel Energy, Otter Tail Power, or your own local cooperative.
  • Xcel ducted units call for a Trade Partner Network contractor; for $2,000, you can instead install a cold-climate mini-split yourself, and it heats rooms without ducts.
  • Otter Tail Power pays up to $1,040 per ton if you use a Quality installation contractor plus a controlled rate.
  • Your Xcel installation must be complete by December 31, 2026; the contractor then files by September 30, 2027, and payment arrives within eight weeks.

Tons are how heating capacity is measured; a typical Minnesota home runs on three to five tons. After installation, Otter Tail customers send their own 2026 rebate form by email or mail and receive a check within six to eight weeks.

Are Minnesota Home Energy Rebates Open for Income-Qualified Households?

No. When the state posted its October 12, 2026 update, the Save Energy Minnesota programs had still not launched, and no launch date is set. Federal approval is still pending, so any equipment bought before opening day will not receive a retroactive payment. Updated federal rules also bar the program from paying to replace heating appliances that are not electric.

When it opens, the HEAR heat pump program will pay as much as $8,000 to households making less than 80% of area median income. Here, area median income means the middle household income in your specific county for your family size. At 80% to 150% of that limit, households get up to $4,000; the state bonus program pays up to $4,000 more. HOMES, a companion whole-home program, will offer as much as $12,000 for projects where insulation and air sealing come first.

Minnesota Heating Rules, Free Weatherization, and Dual-Fuel Rates

Natural gas heats two out of three Minnesota households, and electricity heats one in five. Electric utilities must hit 100% carbon-free electricity by 2040 under state law, so they reward dual-fuel heating. If your existing home has a qualifying gas furnace paired with a heat pump, CenterPoint Energy will pay up to $1,100. Most electric cooperatives have a dual fuel rate: heat pumps get a lower electric price when they are controlled during peak winter hours.

If your household is under 50% of state median income, you can apply for free air sealing via the Minnesota Weatherization Assistance Program. Income-qualified customers can also get a free Home Energy Squad visit from Xcel Energy. The federal 25C tax credit has ended, so it does not cover any installation placed in service after December 31, 2025.

Common Questions About Minnesota Heat Pump Rebates

Which heat pump rebates can you get in Minnesota?

In Minnesota, utility heat pump rebates run from $50 to $2,200 based on system type and size. On top of unit rebates, Xcel Energy offers a $600 bonus for qualifying insulation work, plus as much as $1,500 for a panel upgrade. Lake Country Power and Connexus Energy are among the electric cooperatives that also pay up to $1,000.

Are heat pump tax credits available in 2026?

No heat pump installed in 2026 qualifies for the federal Section 25C tax credit. The credit was ended early by Congress under Public Law 119-21, and the Internal Revenue Service confirmed this on August 21, 2025. To qualify, the heat pump needed to be in service by December 31, 2025.

Which rebates does Minnesota Power offer for 2026?

For 2026, Minnesota Power gives $1,000 toward a cold-climate heat pump, ducted or ductless, and $400 toward a standard unit. The heat pump rebate form is filed for you by the participating contractor you must hire. An ENERGY STAR heat pump water heater can also earn you $300 if claimed by January 15, 2027. Rebate checks take eight to ten weeks to reach you.

Get Minnesota installer quotes with the rebates taken off

Most rebates on this page are paid through the installer or need the installer's paperwork, so the quote is where the money is settled. Tell us the ZIP code and what you want installed, and installers who work with these programs send a written price with the rebates taken off.

You consent to up to three heat pump installers, or one firm that pairs homeowners with installers, in your ZIP code reaching you about this project by call, text or email at the number and address you entered when you send this request, and those calls and texts may be placed with automated dialing technology. Agreeing is not a condition of any purchase or rebate.