Renewable Energy Production Incentive (Minnesota)

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Last modified on December 17, 2014.

Financial Incentive Program

Place Minnesota

Name Renewable Energy Production Incentive
Incentive Type Performance-Based Incentive
Applicable Sector Commercial, Industrial, Residential, Nonprofit, Agricultural, Tribal Councils
Eligible Technologies Biomass, Anaerobic Digestion
Active Incentive Yes
Implementing Sector State/Territory
Energy Category Renewable Energy Incentive Programs
Amount 1.5¢/kWh

1.0¢/kWh for certain hydro facilities in need of repair

Eligible System Size Wind: 2 MW or less

Funding Source Xcel Renewable Development Fund (RDF)

Maximum Incentive None
Ownership of Renewable Energy Credits Not specified

Program Budget Total: up to $10.9 million annually

Wind (existing, no new applications): $9.4 million
Hydro, Anaerobic Digesters: $1.5 million

Terms 10-year payment period
Program Administrator Minnesota Department of Commerce

References DSIREDatabase of State Incentives for Renewables and Efficiency[1]


Supported by the state's Renewable Development Fund, Minnesota offers a payment of 1.5¢ per kilowatt-hour (kWh) for on-farm biogas facilities. Previously, this incentive also offered payments to wind and hydroelectric facilities, but no new incentives are being offered for these technologies.

Hydro Facility Eligibility

Generally, the incentive is available to hydro facilities located at the site of a dam, if the dam was in existence as of March 31, 1994, and begins generating electricity after July 1, 1994 or generates electricity after substantial refurbishing of a facility that begins after July 1, 2001. In order to receive payments, qualifying hydro facilities must begin operation by December 31, 2011. The payment period for hydroelectric facilities may not extend beyond December 31, 2021.

On-Farm Biogas Facility Eligibility

On-farm biogas recovery facilities must be located at the site of an agricultural operation. Payments may be made for electricity generated from on-farm biogas recovery facilities that are operational between July 1, 2001 and December 31, 2017, though no payments may be made on electricity generated after December 31, 2015. Note that in May 2007, the Renewable Energy Production Incentive was amended to make the actual gas produced by on farm anaerobic digesters eligible to receive the incentive beginning July 1, 2007. In other words, it is no longer required that the gas be used to produce electricity. Payments may be made for gas generated from on-farm biogas recovery facilities for facilities that are operational between July 1, 2007 and December 31, 2017.

Wind Facility Eligibility

Minnesota also issues a payment of 1.5¢/kWh for electricity generated by new wind-energy projects less than two megawatts (MW) in capacity. However, the program was closed to new applicants on January 1, 2005 and the in-service deadline for wind incentives expired January 1, 2008. Approximately 225 MW of small wind facilities are subscribed in the program. No payments may be made to these facilities for electricity generated after December 31, 2015.

Incentive Contact

Contact Name Energy Information Center
Department Minnesota Department of Commerce
Division Division of Energy Resources
Address 85 7th Place East
Address 2 Suite 500
Place St. Paul, Minnesota
Zip/Postal Code 55101-2198
Phone (800) 657-3710


Authorities (Please contact the if there are any file problems.)

Authority 1: Minn. Stat. § 216C.41
Date Effective 07/01/1994 (hydro) 07/01/2001 (digesters-electric); 07/01/2007 (digesters-gas)
Date Enacted 05/16/1994 (subsequently amended)
Expiration Date 12/31/2021 (hydro); 12/31/2017 (digesters)

  • Incentive and policy data are reviewed and approved by the N.C. Solar Center's DSIRE project staff.[1]


  1. 1.0 1.1  "Database of State Incentives for Renewables and Efficiency" Cite error: Invalid <ref> tag; name "DSIRE" defined multiple times with different content