Minnesota Heat Pump Rebates and Tax Credits in 2026

Close-up of outdoor air conditioner condenser units

Heat pump incentives in Minnesota changed a lot in the past year. The federal tax credits many homeowners counted on have ended. The state's new rebate programs are still waiting to launch. Utility rebates remain the main incentive you can use today. This guide covers what we could confirm from official sources as of October 15, 2026. Programs change, so confirm your eligibility with each program before you buy.

Federal tax credits: ended after 2025

Two federal tax credits used to cover heat pumps. Both were shortened by Public Law 119-21, signed July 4, 2025. According to the IRS FAQs on the 2025 changes to Sections 25C and 25D:

Energy Efficient Home Improvement Credit (25C): covered air-source heat pumps. It is not allowed for any property placed in service after December 31, 2025.
Residential Clean Energy Credit (25D): covered geothermal heat pumps. It is not allowed for any expenditures made after December 31, 2025. The IRS treats an expenditure as made when the original installation is completed, so paying a deposit in 2025 does not qualify a 2026 installation.

If your heat pump was installed and in service during 2025, you may still claim the credit on your 2025 tax return. Talk to a tax professional about your situation. For any installation in 2026, these federal credits are not available.

Minnesota state rebates: not launched yet

Minnesota plans to offer federally funded home energy rebates (the HEAR and HOMES programs) under the name Save Energy Minnesota, along with a separate state Residential Heat Pump Rebate. As of an October 2026 update on the Minnesota Department of Commerce's Save Energy Minnesota page, the state says:

Save Energy Minnesota has not launched yet.
The state is waiting for formal approval from the U.S. Department of Energy.
There is no estimated launch date.

This timing matters. The Department of Commerce says federal guidelines do not allow retroactive rebates for items purchased before the program launches. Its heat pump rebate page also says you must be approved through HEAR before you buy the heat pump. If you buy now, you should not expect to receive these state rebates later. Planned eligibility is tied to household income, and the planned heat pump rebate calls for an ENERGY STAR certified cold-climate unit installed by an approved contractor.

Xcel Energy rebates

Xcel Energy's Minnesota 2024–2026 residential rebate summary lists rebates for several types of heat pumps:

Standard and cold-climate air-source (ducted) heat pumps, with a quality installation requirement.
Standard and cold-climate ductless mini-split heat pumps.
Ground-source (geothermal) heat pumps, with a quality installation requirement.
Heat pump water heaters.
A bonus when you complete qualifying insulation and air sealing and then install a qualifying heat pump within two years.

Rebate amounts depend on the equipment type, its efficiency ratings, and whether Xcel supplies only your electricity or both your electricity and gas. Cold-climate models must meet extra low-temperature performance criteria. Xcel's Minnesota HVAC rebate application asks for your contractor's Xcel Energy contractor ID, says mini-split heat pumps need a backup heat source, and says applications must be postmarked by September 30 of the year after installation. Xcel states programs may be cancelled or modified with 30 days' notice. The current rebate summary covers 2024–2026, and terms for 2027 installations had not been published when we checked.

CenterPoint Energy rebates

CenterPoint Energy supplies natural gas, but it offers a rebate for a ducted air-source heat pump paired with a gas furnace for Minnesota residential customers. Its 2026 program terms require:

Natural gas service from CenterPoint Energy at the installation address.
A natural gas furnace rated 92% AFUE or higher in the home.
A heat pump listed in the AHRI directory with an HSPF2 rating of 7.8 or higher.
A switchover temperature set at 40°F or lower, shown on the invoice.
Installation between January 1 and December 31, 2026, with the application submitted by December 31, 2026.

CenterPoint also offers 2026 rebates on high-efficiency gas furnaces, which can apply if you replace your furnace at the same time.

How to protect your rebate before you buy

Identify your utilities. Check your bills to see who supplies your electricity and your gas. Rebates depend on it.
Read the current terms. Download the rebate form and terms for the year you plan to install, not last year's version.
Confirm the equipment qualifies. Ask for the AHRI certificate number and confirm the model meets each program's efficiency requirements.
Ask about contractor requirements. Confirm your contractor is registered with the utility program if required.
Keep the final invoice. Utilities require a dated invoice with model numbers. Estimates and proposals are not accepted.
Watch the deadlines. Note the install-by and submit-by dates, especially for year-end installations.
Do not count on state rebates for a purchase made now. Check the Department of Commerce page for launch news.

When to call a professional

Talk to a heating contractor once you know which utilities serve your home and when you want to install. A contractor can confirm which models meet current rebate requirements, set the switchover temperature a program requires, and provide the invoice details the utility asks for. Krinkie's can walk you through heat pump installation and the paperwork. Always confirm your eligibility directly with each program before you buy.

Common questions

Is there a federal tax credit for heat pumps in 2026?

No. The IRS says the 25C credit is not allowed for property placed in service after December 31, 2025, and the 25D credit is not allowed for expenditures made after that date.

Can I get the Minnesota HEAR heat pump rebate now?

Not as of October 2026. The Minnesota Department of Commerce says Save Energy Minnesota has not launched and federal rules do not allow retroactive rebates for purchases made before launch.

Can I get both an Xcel Energy and a CenterPoint Energy rebate?

Possibly, if your home qualifies for each program separately. Read both programs' current terms and confirm your eligibility with each utility before you buy.

Minnesota Heat Pump Rebates and Incentives: What's Available