Minnesota utility rebates are the real incentive on a 2026 furnace or air conditioner replacement. The federal 25C tax credit that used to sit alongside them expired for equipment placed in service after December 31, 2025, so for a 2026 installation the utility rebate is what is left — and it is worth more than the old federal credit was for most gas furnaces.
Gas Furnace Rebates by Utility
Minnesota gas rebates are tiered by AFUE. Higher efficiency, bigger rebate:
- Xcel Energy: $200 at 95% AFUE, $300 at 96%, $400 at 97%
- CenterPoint Energy: $300 at 94–95.9% AFUE, $400 at 96% or higher
- Minnesota Energy Resources: $300, rising to $500 at 97% AFUE
An 80% AFUE furnace qualifies for $0 anywhere in Minnesota. Every gas rebate in the state starts at 95% AFUE. If a rebate is part of your budget, that decides your unit.
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Air Conditioner Rebates Come From Your Electric Utility
This trips people up constantly: CenterPoint is a natural gas utility and rebates nothing on a cooling-only air conditioner. AC rebates come from whoever supplies your electricity.
- Xcel Energy: $450 at 13.4 SEER2 or better, with an AHRI reference number on the application
- Connexus Energy: $25 at 13.8 SEER2, $150 at 17.2 SEER2 — a 13.4 SEER2 unit earns nothing
- Dakota Electric: $300 at 15.2 SEER2 — again, a standard 13.4 unit earns nothing
A standard-efficiency air conditioner clears Xcel's floor comfortably but misses most co-op floors. Much of the metro's outer ring is served by co-ops rather than Xcel, so confirm your electric provider before you assume the $450 is coming.
Other Rebates Worth Claiming
- Smart thermostat: $50 from Xcel for a qualifying ENERGY STAR connected thermostat
- Water heater (CenterPoint): $75 tank, $250 tankless
- Ducted dual-fuel heat pump paired with a gas furnace (CenterPoint): $1,100
File every measure that applies. On a furnace-plus-AC job with a thermostat, the rebates stack across both utilities.
Propane Homes
CenterPoint rebates require natural gas service, so a propane furnace earns $0 no matter how efficient it is. Read the data plate's "equipped for use with" field before promising yourself a rebate. This matters most on mobile homes, which are commonly on LP even inside CenterPoint's metro footprint. Note also that a furnace bought for an LP home ships set for natural gas and needs an LP conversion kit as a separate line item.
How to File
- Identify your gas utility and your electric utility separately.
- Confirm the AFUE or SEER2 rating clears that utility's floor before purchase.
- Save the invoice, model and serial numbers, AHRI reference number, and install date.
- Submit after installation through the utility's rebate application. Deadlines are real — CenterPoint requires paperwork by December 31 of the install year.
The Bigger Lever
A $300–$400 rebate is worth claiming, but it is not where the money is. The larger difference is equipment cost: buying the same Goodman or Whirlpool unit factory-direct instead of through a contractor's markup. Furnace Direct shows live pricing for your ZIP code, ships nationwide, and you either use our install network or hire your own licensed installer.
Related: the full Minnesota rebate guide and Xcel vs CenterPoint rebate detail.
Rebate amounts and program terms change. Verify current amounts with your utility before purchasing. This is general information, not tax advice.
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