The One Big Beautiful Bill Act will end energy tax credits for electric vehicles, rooftop solar, air source heat pumps and more. St. Louis Park sustainability staff want to help you take advantage of these federal credits before they expire and can help you navigate the state, city and utility incentives that are still available.

Don’t hesitate to reach out directly to a sustainability specialist for all your energy project questions!

Rooftop solar

The change: After Dec. 31, 2025, residential rooftop solar installations will no longer be eligible for a 30% federal tax credit.

The good news: You can still qualify for a 5 – 15% reimbursement on your solar project through the city’s Climate Champions Solar Bonus after making energy efficiency home upgrades. With Xcel Energy’s Solar*Rewards®, you can also receive monthly payments in exchange for the Renewable Energy Credits (RECs) your solar panels produce. Plus, even without the tax credit, the average payback for solar panel installation in Minnesota is about 11 years (according to EnergySage), which is less than half the lifespan of most solar panels.

Get started: While city staff can’t recommend specific installers, you can use the solar directory from the Minnesota Clean Energy Resource Teams (CERTs) to find and support local installers. Staff also encourage you to get two to three quotes to compare bids and use the helpful list of questions to guide your conversations.

Electric vehicles

The change: After Sept. 30, 2025, new electric vehicles will no longer be eligible for a tax credit up to $7,500, and used electric vehicles will no longer be eligible for a tax credit up to $4,000. These credits are subject to income restrictions.

The good news: There are many new and used electric vehicle options available in Minnesota. While the tax credit is still available, Xcel Energy also offers an EV charger and wiring rebate.

Get started: Use Xcel Energy’s EV catalog tool to help you find new and used EVs that match your needs and lifestyle. All you need to do is enter your commute distance, budget, charger availability and any other preferences.

Home energy efficiency and electrification

The change: After Dec. 31, 2025, the Home Energy Efficiency Improvement Credit (25C) will be eliminated. This credit has different caps for different projects: up to $600 for an electric panel, $2,000 for an air source heat pump and $1,200 for insulation improvements, to list a few.

The good news:

• The State of Minnesota will be launching the Home Electrification and Appliance Rebate Program (HEAR) later this year which will provide up to $14,000 in rebates for income-qualified households for air source heat pumps, heat pump water heaters, induction stoves, electric panels, insulation/air sealing and more. Plus, the state will also be launching a separate electric panel upgrade grant program (up to $3,000) and a residential heat pump rebate program (up to $4,000). These programs have not launched, but they are expected to be available the same time as the HEAR program and work in tandem. You can sign up to receive email updates.
• Xcel Energy offers an electrical panel upgrade rebate as well as rebates for air source heat pumps and heat pump/hybrid water heaters.
• CenterPoint Energy offers rebates for air sealing and insulation as well as air source heat pumps.
• The City of St. Louis Park will match utility rebates for energy efficiency projects up to 150% through the Climate Champions for Homes program.

Get started: To qualify for Climate Champions for Homes, sign up for a Home Energy Squad “planner” visit. Energy experts will identify ways your home is losing energy, install things like LED lightbulbs on the spot. Residents of St. Louis Park qualify for a $50 visit (usually $100). Income qualified residents are eligible for free visits. Sign up online or call 651.328.6220 to get started.

Note about tax credits

The federal tax credits described here are “non-refundable,” so you can’t get back more than you pay in federal income taxes. If you are eligible for a tax credit of $600, but you only owe $300 in federal income taxes, you would receive a $300 tax credit.

Overwhelmed? Staff are here to help

Going solar, driving electric, weatherizing your home and installing electric appliances are all key to achieving our city’s Climate Action Plan goal. Staff can help you navigate projects and connect you with resources such as Electrify Everything MN, which offers a new personalized incentives calculator and free expert advice through their advisor service.

For a quick overview of all federal energy tax credit changes, visit Rewiring America.