2023 Legislative Session Recap

July 25, 2023
On May 22, the Minnesota Legislature adjourned a historic legislative session that included a massive bonding bill, increased education funding as well as a never before seen level of new funding for energy investments and programs.

CEEM’s Legislative Work

Clean Energy Economy MN (CEEM) develops and supports public policy that promotes the growth of energy efficiency and clean energy jobs and the economic opportunities provided by clean, affordable and reliable energy. Working with the Walz-Flanagan Administration, state legislature and before the Minnesota Public Utilities Commission (PUC), CEEM provides the business voice of clean energy to influence policy decisions and grow equitable and inclusive clean energy market opportunities. Learn more about our work at the Capitol.

2023 Top Priorities

  • Federal Funds – Creation of the State Competitiveness Fund with a total of $190M appropriated
  • 100% Clean Energy by 2040 – Signed into law by Governor Walz in early February
  • Workforce and Innovation – Creation and funding of the Minnesota Energy Alley initiative
  • Decarbonization of Buildings and Transportation – Updates to commercial codes and key investments in Electric Vehicle (EV) infrastructure as well as rebates for EVs passed into law

Setting the stage

There were many big wins in clean energy policy during the 2023 legislative session. The 100% Clean Energy by 2040 bill was passed early on in the session and paved the way for the passage of other notable clean energy bills. Following the passage of the 100% bill came the passage of Matching Funds/State Competitiveness Fund initially in the amount of $115M and increased to a total of $190M later on in session through the Jobs and Labor Omnibus Bill. The State Competitiveness Fund allows Minnesota to compete for federal dollars for clean energy projects and investments in Minnesota.

The Environment and Energy Omnibus bill, HF2310, contained large investments in clean energy. A few notable clean energy investments include:

  • A $15M grant for a High Voltage Transmission line between North Dakota and Minnesota. This will be used for the state portion of a federal IIJA grant application.
  • $13M total for an electric school bus program
  • $45M for the Minnesota Climate Innovation Finance Authority to finance clean energy projects
Minnesota Utility Scale Solar Sylvan Minnesota

Solar and Energy Storage

Solar and energy storage received a big spotlight this session with investments to improve programs through the Renewable Development Account (RDA) and/or the General Fund, such as the Solar*Rewards Program ($12.5M), Solar on Schools ($29.3M), Solar on Public Buildings ($5M), and the Energy Storage Incentive Program ($4M). The Solar*Rewards Program did not receive the full funding requested which will likely result in the program “selling out” early in the year.

The Community Solar Garden (CSG) Program also reached a new deal that will update the program and preserve the subscriber-based model. The subscriber-based model will now allow inclusion for projects up to 5MW. Modernization of the CSG Program also includes a new Distributed Generation (DG) standard up to 10MW in size and requires all utilities to meet a new percentage of solar development through a non-subscriber model.

Another important solar policy passed this session was the adoption of language that restricts the ability of HOAs to ban residential solar. This bipartisan-led policy opens doors for more homeowners to opt into rooftop solar without HOAs shutting down a project.

Energy Efficiency

Within the Jobs and Labor Omnibus, SF3035, contained language to update the commercial building energy codes. The language requires code to incrementally reach an 80 percent reduction in net energy consumption from a 2004 baseline.

There were also two rebate programs established for residential upgrades. The Electrical Panel Rebate Program received $6.5M in appropriations. The Heat Pump Rebate Program received $13M in appropriations. Both programs will alleviate cost burdens on much-needed home energy efficiency upgrades for homeowners.

electric vehicle charging


Electrical Vehicles (EV) and EV infrastructure made breakthroughs in the transportation sector this session. The biggest EV infrastructure investment was a $68M appropriation to implement the National Electrical Vehicle Infrastructure (NEVI) Program.

The legislature also established a new electric vehicle rebate program for consumers through the Department of Commerce. The rebate allows for new EVs to qualify for up to a $2,500 state rebate and used EVs to qualify for up to a $600 state rebate. In addition to the rebate program, there is an EV state-fleet preference for Minnesota state agencies in purchasing new fleet vehicles.

There was also a policy adopted to allow for the right-of-way on highways for the expansion of electric transmission lines and infrastructure. This will be beneficial in transforming transmission infrastructure as the state moves toward achieving its 100% Clean Energy by 2040 goal.

An effort to push a statewide Clean Transportation Standard was also pursued this session, however, was not passed. Instead, a Clean Transportation Fuel Standard Working Group was established to further explore the implementation of a Clean Transportation Standard with performance-based incentives to decarbonize the transportation sector.

clean energy worker installing solar panels

Workforce and innovation

This session, CEEM’s proposal to build MN Energy Alley was awarded $3M to invest in Minnesota’s clean energy technology start-up market. MN Energy Alley will nurture and support clean energy entrepreneurs and emerging businesses to develop the next generation of clean energy technologies.

The University of St. Thomas Center for Microgrid Research will receive $3M in funding for Fiscal Year (FY) 2024 and $400K in FY 2025. The Center will also receive $4.1M for capacity building and federal matching for 2024.

Additionally, there was a policy to enhance manufacturing incentives through the State Competitiveness Fund and the Department of Employment and Economic Development (DEED).


The AGRI Bioincentive Program established by the legislature in 2015 encouraging commercial-scale production of bioenergy will receive $5.75M in funding over the next biennium with a decrease to $3M after. This was not the full funding requested for the AGRI Bioincentive Program and more efforts will be pushed in the future.

Additionally, efforts to mitigate wood waste from the infestation of the Emerald Ash Borer (EAB) was a prevalent issue during the session. The District Energy St. Paul Cogeneration Facility received $16.6M for the EAB Response Grant Program. The program was not adequately funded as District Energy’s request was $37M to get through the peak of the EAB infestation in Minnesota. Koda Energy, a CEEM-member located in Shakopee, also received $3M for a wood dehydrator to help process wood-waste at their facility.

Missed opportunities

Despite a great deal of support from the clean energy community and bipartisan support in the Senate for an Advanced Nuclear Study, it was left out of the final deal in the Conference Committee Report. This is expected to be a continuing conversation for next session.

With the passage of the 100% Clean Energy by 2040 bill, we will need a tremendous buildout of transmission and long-term fixes to interconnection issues – both of which were slight misses this session. While some progress was made, extensive further investment in solving the interconnection issues and transmission constraints on our system will be required.

What's next?

Implementation of all the clean energy policies will be in full gear. In preparation for next session, CEEM’s Policy Team is already planning for legislator site visit tours with our business members and drafting Legislative Priorities for 2024. CEEM is currently working on our regulatory action strategy at the Minnesota Public Utilities Commission (PUC) and leading an effort to improve the Guaranteed Energy Savings Program and Energy Service Performance Contracting with the Department of Commerce and the Walz Administration. The team is looking forward to prioritizing implementation, interconnection, and transmission for next session.

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