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U.S. Department of Energy Energy Efficiency and Renewable Energy

Energy Incentive Programs, Minnesota

Updated November 2011

What public-purpose-funded energy efficiency programs are available in my state?

Minnesota has no public-purpose-funded energy efficiency programs.

What utility energy efficiency programs are available to me?

State law requires regulated electric utilities to invest 1.5% (2% for Xcel) of their in-state revenues in the Conservation Improvement Program (CIP). Regulated gas utilities and cooperative and municipal utilities are required to invest 0.5%. Each utility develops its own CIP programs, and the cost of the programs is charged to customers of the utility via a bill surcharge. Over $150 million was budgeted in 2010 for energy efficiency under these programs (including low-income and residential offerings).

Xcel Energy offers rebates and incentives for a broad range of high-efficiency equipment, including lighting, air-conditioning systems and components, motors, adjustable speed drives, roofing, refrigeration, compressed air systems, and natural gas-fired boilers and furnaces, as well as for data centers and energy management systems. A custom measure option is available, too.

Minnesota Power (MP) offers the PowerGrant program, in which incentives are available for energy-efficient equipment, including lighting, air conditioning, motors, energy management systems, refrigeration, and electric cooking equipment. Rebate amounts are either based on the kW or kWh saved over the lifetime of the equipment, and are limited to $50,000 per customer for facilities with average peak monthly demand over 300 kW, and $25,000 for those between 100 and 300 kW.

Otter Tail Power Company provides the following incentives:

  • Rebates are available for a variety of energy-efficient equipment, including lighting, motors, air- and ground-source heat pumps, refrigeration, thermal storage technologies, and electric cooking equipment.

  • Grants are available through a competitive bidding process for commercial and industrial customers to undertake energy efficiency projects.

In addition Otter Tail provides plan review and design assistance for new construction of buildings over 20,000 square feet. CenterPoint Energy offers rebates for efficient natural gas-fired equipment, including heating systems and components (new and retrofit), boiler tune-ups, water heaters, steam traps, infrared heaters, food service equipment, and natural gas-fired process equipment. Custom rebates are also available.

Minnesota Energy Resources offers the following programs:

  • The Energy-Saving Audits program provides no-cost building energy audits for government customers, up to $500 for a Level 1 (walk-through) audit and $800 for a Level 2.

  • The Energy-Saving Rebates program covers heating, HVAC systems, and water heating equipment. Custom rebates are based on incremental cost as well as peak load and annual energy savings. Prescriptive rebates vary by equipment measure.

Alliant Energy (Interstate Power and Light) provides rebates for various energy efficiency upgrades, ranging from windows to lighting to furnaces, through its Minnesota Business Incentive Programs. Alliant also offers the Shared Savings program, an on-bill financing scheme, in which the company's efficiency improvements are paid out of customers' utility bills over five years.

The Dakota Electric Association offers rebates for motors, adjustable speed drives, various lighting and air-conditioning equipment, and vending machine controls. Custom rebates are also available.

Numerous municipal utilities and electric cooperatives in Minnesota offer incentive programs targeted to commercial and industrial customers. The Database of State Incentives for Renewables and Efficiency (DSIRE) web site provides summaries of these programs.

What load management/demand response options are available to me?

Xcel Energy offers several demand response programs that may be of interest to federal customers:

  • The Electric Rate Savings programs are for customers willing to curtail load (by as little as 50 kW) at Xcel's request. The June-September discount is $5.29-$7.23 per kW of controllable load, and the October-May discount is $1.95-$3.89 per kW. The ranges relate to the number of hours the customer is willing to be curtailed.

  • The Saver's Switch program remunerates customers for allowing Xcel to adjust the customer's air conditioner so it cycles off and on at 15- to 20-minute intervals. Saver's Switch pays a monthly discount of $5 per ton of enrolled air conditioning from June through September.

  • Xcel also offers numerous interruptible rates and riders, such as their Peak Controlled Tiered Service rate, in which customers willing to cut 50 kW of load or greater at the company's request can qualify for decreased electric rates.

Otter Tail Power Company various demand response options:

  • The Released Energy Rider pays large customers (500 kW minimum peak load) for load curtailments. When Otter Tail expects high market prices, it will alert program participants of its desire for released energy. Customers who wish to participate reply with a commitment to curtail a specific amount of power at the required time. Remuneration is based on a negotiated percentage (up to 90%) of Otter Tail's cost to buy power in the market.

  • Various direct load control options allow rate cuts in exchange for allowing Otter Tail Power to control specific equipment (such as domestic water heating or thermal storage) on their system during on-peak times.

  • A Real Time Pricing Rider is available to a limited number of customers with at least 200 kW of permanent load. Customers pay at the company's real-time rate for usage above and below a historically determined "customer baseline load."

Minnesota Power offers its Commercial Dual Fuel program. This direct load control program is designed for any electric load where a non-electric backup source of energy (e.g., natural gas as an alternative to electric heat) is able to be used during periods of peak demand. The incentive is roughly 5 cents per curtailed kWh.

Dakota Electric Service offers the Controlled Interruptible Service Rate and several variants, available to customers that have qualifying interruptible loads. A credit is applied to the monthly bill for all energy (kWh) consumed.

Alliant (Interstate Power and Light) provides its Minnesota Interruptible Program, by which customers receive reduced electric rates in exchange for their commitment to curtail usage (by as little as 50 kW) during peak periods, generally with two hours notice.

The Central Minnesota Municipal Power Authority, http://www.minnkota.com, and http://www.dairynet.com/, generation and transmission utilities serving municipal and cooperative utilities in Minnesota, offer their members various direct load control and interruptible demand response programs. CMMPA also offers a load bidding option.

Utilities in the footprint of MISO (formerly the Midwest Independent System Operator) may enroll interested customers in any of MISO's various demand response offerings, from which they can receive payments for reducing load. Federal customers should contact their local utility representative to inquire about participation.

What distributed energy resource options are available to me?

The Database of State Incentives for Renewables and Efficiency (DSIRE) provides information on programs that offer incentives for renewable distributed generation. The following programs may be of interest to federal customers:

  • Minnesota Power's Power Grant program offers $200/kW grants for various renewables installations of up to $10,000 for 0-100 kW systems, $25,000 for 101-300 kW systems, and $50,000 for systems over 300 kW.

  • Xcel Energy's Renewable Development Fund provides grants periodically through a request for proposals process. Renewable energy technologies eligible for funding typically include wind, biomass, solar, hydroelectric, and fuel cells. Funding is generally split between new development projects that result in the production of renewable energy, and research and development. The program is currently (Fall, 2011) on hold in Minnesota pending consideration by the state legislature, but may resume after July, 2012.

  • Xcel's Solar* Rewards program offers $2.25/watt (DC) for solar PV systems up to 40 kW. Systems must meet Xcel's qualifications, including having conducted an energy audit with the utility.

Numerous municipal and cooperative utilities in Minnesota also offer renewables incentives programs, which can be researched on the DSIRE site, above.

Are there energy efficiency programs sponsored by state government?

The Minnesota Department of Commerce administers a variety of energy efficiency programs. However, no state-sponsored energy efficiency programs are currently available to federal customers.

What additional opportunities are available to me?

Federal customers whose utilities have area-wide contracts through GSA (e.g., Aquila and CenterPoint), may be able to take advantage of 3rd-party financed energy efficiency projects called utility energy services contracts (UESCs). Information is available on GSA's Energy Center of Expertise Library Page. Federal facilities should contact their account executive to determine the level of each utility's participation.

NOTE: Energy efficiency funds and demand response programs are updated at least annually. Please contact the FEMP webmaster if changes are needed between updates.