Xcel Energy CenterPoint Energy HVAC Rebates Minnesota 2026

The 2026 Rebate Landscape for Twin Cities Homeowners

The federal 25C tax credit is gone. Congress eliminated it at the end of 2025, and no replacement is on the books. For Twin Cities homeowners planning a heating or cooling upgrade in 2026, the question has shifted: what is actually available?

The answer is more than you might expect. Xcel Energy and CenterPoint Energy both run funded efficiency rebate programs under Minnesota law. Those programs are still active. They stack with each other. A qualifying project can put thousands of dollars back in your pocket, even without any federal credit.

This post shows exactly what is available, what stacks with what, and what the math looks like on a real install.

What Happened to the Federal 25C Tax Credit?

The credit is gone for 2026 installs. The One Big Beautiful Bill Act (P.L. 119-21), signed July 4, 2025, ended the 25C Energy Efficient Home Improvement Credit for equipment placed in service after December 31, 2025. If you installed qualifying equipment before that date, you can still claim the credit on your 2025 federal tax return.

Energy Star confirms the program ran from January 1, 2023, through December 31, 2025. Before expiration, it worked like this: 30% of cost, up to $2,000 for heat pumps. Up to $600 each for a qualifying central AC or furnace. A combined annual maximum of $3,200.

Any article still citing a “federal credit” on a 2026 heat pump purchase is outdated.

One nuance that caught homeowners off guard last year: the “placed in service” date controls eligibility, not the contract date. You signed in December 2025. Your system was installed in January 2026. You get zero federal credit. Installation must be complete within the tax year.

The 25C credit also had a sibling. The 25D Residential Clean Energy Credit covered geothermal heat pumps at 30% of cost. That credit is also gone for equipment placed in service after December 31, 2025.

This is a real change in the economics of a new HVAC system. But Xcel Energy and CenterPoint Energy rebates are unaffected by federal legislation. Minnesota’s Conservation Improvement Program law requires investor-owned utilities to fund efficiency programs. The rebates are structurally stable, not a one-year promotion.

What Does Xcel Energy Offer for HVAC Rebates in Minnesota?

Xcel offers up to $2,000 for a cold-climate heat pump, $400 for a qualifying central AC, $500 for a high-efficiency furnace, and $50 for a smart thermostat. A $600 bonus applies when the same project includes qualifying insulation or air sealing.

Xcel Energy serves the Twin Cities metro as both an electric and gas utility. Its service area covers Minneapolis, St. Paul, and most surrounding suburbs. The rebate structure below comes from the Xcel Energy rebate aggregator. Verify current amounts at xcelenergy.com/rebates before you sign a contract.

• Cold-climate air-source heat pump: up to $2,000
• Central AC: $400
• High-efficiency gas furnace: $500
• ENERGY STAR smart thermostat: $50
• Insulation/air-sealing bonus: $600, when done in the same project as a qualifying heat pump

The cold-climate designation matters in Minnesota. Twin Cities winters regularly drop below zero. Standard heat pumps lose heating capacity at those temperatures. Cold-climate models maintain rated output down to -13°F or colder. Xcel’s rebate specifically rewards the equipment that holds up through a Minnesota January.

Xcel also runs an AC Rewards demand-response program. Enroll a qualifying AC or heat pump and earn an additional $25 to $40 in annual bill credits. That program is stackable on top of the equipment rebate and runs separately.

All Xcel rebates are post-installation. You need the contractor invoice, the model number, and the serial number. Some contractors file the rebate application on your behalf. Ask about this when you get quotes.

What Does CenterPoint Energy Offer?

CenterPoint’s primary HVAC rebate is up to $1,100 for a dual-fuel heat pump paired with a high-efficiency gas furnace. A gas furnace alone earns $400 standard, or up to $1,200 for income-qualified households.

CenterPoint Energy is the primary gas utility for most of the Twin Cities. Most homes in the metro use Xcel for electricity and CenterPoint for natural gas. That dual-utility setup creates the stacking opportunity.

CenterPoint’s rebate structure, per a contractor source covering both utilities:

• Dual-fuel heat pump (existing home): up to $1,100
• Dual-fuel heat pump (new construction): $400
• High-efficiency gas furnace (standard): $400
• High-efficiency gas furnace (income-qualified): up to $1,200

One number to watch: some sources cite CenterPoint’s heat pump rebate at up to $1,500. Until CenterPoint’s own page confirms the higher figure, use $1,100 as the conservative estimate. Verify directly at centerpointenergy.com before you build a budget around either number.

The CenterPoint Dual-Fuel Rule: What It Means for You

This restriction catches homeowners off guard more than any other part of the rebate landscape.

CenterPoint does not rebate standalone electric heat pumps. If your goal is to leave gas behind entirely and run a fully electric heat pump system, CenterPoint will not contribute a rebate. Homeenergybasics.com’s Minnesota coverage confirms CenterPoint does not rebate mini-splits, ground-source systems, or any heat pump that replaces gas heating entirely.

To qualify for CenterPoint’s heat pump rebate, the system must be:

• A heat pump set up in dual-fuel configuration
• Paired with a gas furnace rated at 92%+ AFUE as the backup heat source
• Configured to switch to the gas furnace at or below 40°F

This setup makes practical sense for Minnesota winters. On a day well below zero, the gas furnace carries the load efficiently. During fall and spring, the heat pump handles heating at a lower energy cost. The two systems work together rather than one replacing the other.

The dual-fuel restriction is not a design compromise. For many Twin Cities homes, it is the better long-term choice. Our winters go well below the temperature range where a standalone heat pump earns most of its efficiency advantage.

If you are weighing whether a heat pump is the right move for your home, our post on heat pumps in Minnesota covers the honest tradeoffs, including the low-temperature performance question.

How Do You Stack Xcel Energy and CenterPoint Energy HVAC Rebates?

A Twin Cities homeowner with Xcel for electricity and CenterPoint for gas can stack both rebates on a qualifying dual-fuel heat pump project. That combination yields up to $3,100 from both utilities. Add the Xcel insulation bonus and the total reaches $3,700.

The math on a typical Twin Cities dual-fuel heat pump install:

• Xcel Energy cold-climate heat pump rebate: $2,000
• CenterPoint dual-fuel heat pump rebate: $1,100
• Combined utility rebates: $3,100
• Xcel insulation/air-sealing bonus (if included): $600
• Total with insulation bonus: $3,700

A new dual-fuel heat pump system can run $12,000 to $18,000 installed. The range depends on home size and equipment tier. A $3,700 rebate stack covers a meaningful slice of that cost.

This money arrives after installation. It is not a tax credit that waits until April. That timing matters if you are managing cash flow on a larger project.

The two rebates come from separate applications filed with each utility. Your contractor should know which forms to use and whether they handle submission as part of their standard service.

For a sense of what a new system costs before rebates are applied, our furnace replacement cost guide for Twin Cities homeowners has current installation ranges by system type and home size.

What About Minneapolis? The Green Cost Share Program

Minneapolis homeowners with 1-4 unit residential properties can access the Green Cost Share program on top of utility rebates. The program covers up to $5,000 for non-Green Zone properties, or up to $14,000 in Green Zone neighborhoods, administered by the Center for Energy and Environment (CEE).

These funds stack on top of Xcel and CenterPoint rebates. A Minneapolis homeowner in a Green Zone doing a dual-fuel heat pump install with insulation could reach up to $17,700 in combined utility and city rebates. That is before any state programs enter the picture.

The program is first-come, first-served. Funding does not run indefinitely. Verify current availability and application requirements at minneapolismn.gov/government/programs-initiatives/environmental-programs/green-cost-share/ before you start the project.

Homeowners in Blaine, Maple Grove, Plymouth, Brooklyn Park, Woodbury, or Bloomington do not have access to the Minneapolis program. All the Xcel and CenterPoint rebates in this post still apply to those areas.

Are Minnesota State HVAC Rebates (HEAR and HOMES) Available Yet?

The honest answer: it is unclear. Published sources from mid-2026 conflict on whether Minnesota’s state rebate programs are open and funded. Do not count on them when building your project budget. Verify the current status at mn.gov/commerce before signing a contract.

Minnesota’s Save Energy Minnesota umbrella includes three programs with significant potential amounts:

• HEAR (High-Efficiency Electric Home Rebate Act): up to $8,000 for income-qualified households
• HOMES: up to $8,000 based on whole-home efficiency improvements
• State heat pump rebate: up to $4,000

Income tiers for HEAR: below 80% of Area Median Income (AMI) means up to 100% of project cost covered. At 80-150% AMI, up to 50% of project cost. Above 150% AMI is not eligible for HEAR.

The conflict in the sources: J Smith HVAC’s May 2026 contractor guide describes the programs as active and in full swing. Homeenergybasics.com, updated July 2026, reports no confirmed launch date. We cannot resolve that discrepancy from published sources alone.

If the programs are live when you plan your project, the combined stack for income-qualified households gets very large. A Minneapolis Green Zone homeowner who qualifies for HEAR could stack utility rebates, city Green Cost Share funds, and state HEAR funds together. That combination could cover most of the project cost.

Treat the state programs as a possible bonus until mn.gov/commerce confirms they are open.

What Efficiency Ratings Does Your Equipment Need?

Furnaces need 92-97%+ AFUE. For the CenterPoint dual-fuel heat pump rebate, target SEER2 15.2+ and HSPF2 7.8+. Xcel’s central AC rebate requires SEER2 16+. Xcel’s heat pump rebate requires a cold-climate designation on the unit.

Breaking it down by category:

Furnaces:

• Xcel furnace rebate: 92%+ AFUE minimum
• CenterPoint furnace rebate: 95%+ AFUE for the standard $400 rebate
• CenterPoint dual-fuel config backup furnace: 92%+ AFUE required

Heat pumps:

• Xcel cold-climate ASHP: cold-climate designation required. Your contractor will know which models on the approved list qualify.
• CenterPoint dual-fuel heat pump: SEER2 15.2+ and HSPF2 7.8+

Central AC:

• Xcel AC rebate: SEER2 16+ for the $400 tier

These ratings appear on the yellow Energy Guide label on qualifying equipment. Your installer verifies eligibility before filing the rebate application. When collecting quotes, ask each contractor to confirm which specific models meet the thresholds for both utility programs, not just one.

Missing a threshold is a hard disqualification. On the heat pump side, the difference between a qualifying cold-climate model and a standard one can mean $2,000 in Xcel rebates or zero. It is worth confirming before you sign a purchase agreement.

How to Claim Your Rebates

Rebates are post-installation. The money arrives after the equipment is in and running, not before. The typical process:

1. Get quotes on rebate-eligible equipment. Ask specifically about cold-climate ASHP certification and AFUE ratings on every quote. A contractor who handles rebate paperwork as part of their service saves you time and reduces the chance of a missed form.
2. Save all installation documentation. You need the contractor invoice, the model number, and the serial number for every piece of equipment.
3. File separately with Xcel and CenterPoint. They use different application forms and have different processing timelines. One submission does not cover both utilities.
4. Allow 6-8 weeks for Xcel processing. CenterPoint’s timeline varies by program.
5. Apply for the Minneapolis Green Cost Share through CEE if you own 1-4 unit residential property in Minneapolis and the program has open funding.
6. Check mn.gov/commerce for HEAR/HOMES status if your household falls below 150% AMI and you want to pursue state programs.

There is often a gap between the installation invoice date and when rebate checks arrive. Financing can bridge that window cleanly. Our HVAC financing guide covers what to ask for, including promotional interest-free periods that can span a full rebate processing cycle.

Ready to Put These Savings to Work?

Xcel Energy and CenterPoint Energy HVAC rebates in Minnesota add up faster than most homeowners realize. The federal 25C credit is gone, but the utility rebate stack is real and meaningful. Knowing what you qualify for before you buy is the difference between capturing several thousand dollars in rebates and leaving them unclaimed.

If you are thinking through a switch from a gas system to a heat pump, or want to understand what a dual-fuel setup would cost and earn in rebates for your specific home, our team can walk you through it.

Northern One Hour is locally owned and operated in Ramsey, MN. We serve homeowners across Minneapolis, St. Paul, Blaine, Maple Grove, Plymouth, Brooklyn Park, Woodbury, and Bloomington. We know which equipment qualifies for which programs, and we can help you see the real net cost before you commit.

Call us at (763) 260-6662 or book online to schedule your estimate. “Always On Time… Or You Don’t Pay a Dime!(R)”