Minnesota has a lot of nicknames. Officially, it’s the North Star State, based on its state motto “L’etoile du nord” (the star of the north). Popularly, it’s also known as the Land of 10,000 Lakes, the Gopher State, or the Bread and Butter State.
One name it doesn’t have, but perhaps should, is “The Green Energy State.” Minnesota was one of the first states in the country to pass laws promoting clean energy. Today, it gets more than half its electricity from carbon-free sources. And that number is rising fast.
Minnesota got an early start on clean energy. In the 1980s, it created its Conservation Improvement Program (CIP) to promote energy efficiency. The state also passed a law in 1983 requiring all utilities to offer net metering. This allows homes with solar panels to get credit from utility for energy they put into the grid.
In 2001, Minnesota created a Renewable Energy Objective (REO). This regulation encouraged utilities to get 10% of electricity sold from renewable sources by 2015. However, for most utilities, this was voluntary. In 2007, the state replaced the REO with a new Renewable Portfolio Standard (RPS). Under the RPS, all utilities were required to get at least 20% of their power from renewables by 2020, and further to 25% by 2025.
The same year, Minnesota passed the Next Generation Energy Act. This required the state to cut its greenhouse gas emissions to 80% below their 2005 level by 2050. It also set an energy efficiency resource standard, or EERS. It required utilities to reduce their average energy sales by 1.5% each year, starting in 2010. In 2021, that figure rose to a 2.5% reduction per year. The EERS also requires utilities to spend a certain portion of their annual revenue on efficiency and renewable energy.
Switching to renewable energy offers both economic and environmental benefits for everyone. It can save you money on your electric bill while also reducing your carbon footprint. But in Minnesota, it’s an even better deal. Various programs at the state and local level can help you save even more money.
If you have a grid-connected solar system, sometimes your solar panels produce more energy than you need. Net metering laws require your utility to pay you for the excess energy you put into the grid. Minnesota’s 1983 net metering law is one of the oldest in the country.
Under this law, when your panels produce extra energy, you receive a “solar credit” for it on your bill. You can use this credit to pay for the energy you use when your panels are not producing energy. The process of enrolling in net metering depends on your utility. Your solar installer can help you sign up.
Minnesota residents can take advantage of several tax exemptions and credits for renewable energy use:
Check out our deep-dive on Minnesota's solar incentives and tax credits if you're a resident or business owner looking to learn more.
Business owners in MN can finance the costs of energy improvements through MinnPace. This loan program covers 100% of the cost of new renewable energy or energy efficiency upgrades. Business owners pay back their loans through a special assessment on their property tax bill. Payments are made twice a year over a period of up to 20 years. For most users, the savings on their utility bills more than offset the loan payments.
Along with these statewide programs, many local utilities and municipalities offer additional incentives to go solar. Examples include:
This is only a partial list of solar incentives in the North Star State. Check with your local utility or municipal government for other incentives in your area.
Minnesota has already more than met its RPS goals. As of 2021, the state got 28% of its electricity from renewables and 52% from zero-carbon sources. Renewable energy accounts for over 80% of all new energy capacity added in the past decade.
Most of Minnesota’s renewable power generation comes from wind energy. It’s the eighth-largest wind-generating state in the nation, producing 3% of all U.S. wind power. In 2021, wind energy supplied 22% of all the state’s electricity. Solar power is a much smaller contributor but still produces 4% of all Minnesota’s electricity.
Wind and solar aren’t Minnesota’s only renewable energy sources. The state is also a major producer and user of biofuels. Across the state, there are 19 plants produce ethanol from the state’s ample corn crops. Another two plants produce biodiesel. A state law requires all diesel fuel sold in Minnesota to contain between 5% and 50% biodiesel. (The percentage varies based on the time of year.)
As Minnesota’s use of renewable energy has grown, its fossil fuel use has declined. According to the 2022 Minnesota Energy Factsheet, the state now gets just 21% of its power from natural gas. That percentage is more than one-third lower than the nation’s as a whole.
Coal power in Minnesota is declining even faster. In the past decade, the state built no new coal plants and retired 953 megawatts’ worth. By 2035, all its coal plants will be gone. These changes have helped Minnesota reduce its greenhouse gas emissions to 45% below their 2005 levels. Minnesota is tackling pollution in other ways, too.
In 2021, the clean energy sector employed nearly 58,000 Minnesotans. This figure includes jobs in:
In 2015, Minnesota’s new Building Energy Codes took effect. These codes set energy efficiency standards for construction, remodeling, and repair of residential and commercial buildings. They cover factors such as how much heat a building loses, climate control inside it, and lighting.
The North Star State updated its RPS in 2013 by adding a Solar Energy Standard (SES). The SES requires all utilities to get at least 1.5% of the electricity they sell from solar power by 2020. At the same time, the state set a goal to get 10% of its electricity from solar by 2030.
Reaching this goal could be a challenge for this northern state. As of 2021, just 4% of its power generation came from solar. More than 90% of that small amount came from large solar farms. To meet its goals, Minnesota may need to expand rooftop and community solar as well.