The federal “Big Beautiful Bill” brought sweeping changes to renewable energy incentives. Long standing tax credits for residential, commercial, and utility scale projects were eliminated, with rooftop solar taking the biggest hit. Utility scale wind and solar projects now face higher costs as well. These changes will make renewable projects more expensive and could lead to higher electricity rates. Minnesota’s 100 percent carbon free electricity law remains in place, but meeting it will require more state level investment and careful planning to protect ratepayers.

Minnesota’s clean energy workforce continued to expand, reaching almost 64,000 jobs statewide. Solar installation, wind maintenance, and grid modernization roles grew faster than the overall labor market. Rural communities saw significant benefits from new construction and technical positions. Clean energy is now a major economic driver for the state. However, uncertainty at the federal level could slow future growth, especially for small businesses that depend on stable incentives. Minnesota’s long term clean electricity goals may help provide some stability during this transition.

State regulators approved the 6.2 billion dollar sale of Allete, the parent company of Minnesota Power, to Global Infrastructure Partners and the Canada Pension Plan Investment Board. Regulators determined that the new owners could supply the capital needed for major grid and generation investments. Minnesota Power faces significant upgrades in the coming years, including coal retirements and new renewable projects. Private equity ownership brings access to funding but also raises questions about long term accountability and rate impacts. This decision reflects a growing national trend of financial firms entering the utility sector.

Minnesota utilities made major strides in battery storage deployment in 2025. New installations at the Sherco site and across the state signaled a turning point in how utilities plan for reliability. Storage is no longer a pilot project or a side experiment. It is becoming a core part of the grid. Batteries are helping replace gas peaker plants, smooth out wind and solar production, and reduce the need for costly transmission upgrades. As electricity demand grows, storage is proving to be one of the most flexible and reliable tools available.

Xcel Energy advanced major solar and storage plans at the Sherco site, including 600 megawatts of battery storage and nearly a gigawatt of solar. Additional battery installations are planned across the state, creating a distributed network of storage resources. The Sherco build out is becoming one of the largest solar plus storage hubs in the Midwest. It represents a clear shift away from coal and shows how utilities are reshaping their portfolios around renewable energy and flexible storage technologies.

The Midcontinent Independent System Operator received more than 6 gigawatts of new project requests through its expedited interconnection process. Natural gas plants made up most of the proposals, but battery storage projects also represented a significant share. Minnesota’s clean energy progress is closely tied to regional grid decisions. The influx of gas proposals highlights ongoing concerns about reliability and the pace of renewable integration. At the same time, the growth in battery projects shows that storage is becoming a mainstream option for developers.

Electric cooperatives continued to scale up programs that manage devices like air conditioners, water heaters, and smart thermostats to reduce peak demand. Nearly 400,000 devices are now enrolled statewide, providing about 200 megawatts of flexible capacity. Federal funding is helping expand these programs even further. Virtual power plants are becoming one of the most cost effective ways to improve grid reliability. By reducing peak demand, they help lower wholesale power costs and reduce the need for new fossil fuel generation. They also support growing electricity use from electric vehicles, heat pumps, and data centers.

State agencies, researchers, and industry partners made meaningful progress toward building a sustainable aviation fuel sector. Minnesota’s agricultural strengths and climate smart farming practices position the state well to produce SAF feedstocks at scale. Aviation is one of the most difficult sectors to decarbonize. Developing a homegrown SAF industry could reduce emissions, create new markets for farmers, and establish Minnesota as a national leader in low carbon fuels. It also broadens the state’s clean energy portfolio beyond electricity.

Several major geothermal heating and cooling projects advanced in St. Paul, including systems at Como Zoo, The Heights redevelopment, and the Hamline Midway Library. Geothermal tax credits survived federal budget cuts, allowing these projects to continue. Geothermal systems offer long term, low carbon heating and cooling for buildings and district scale networks. With other incentives eliminated, geothermal stands out as one of the few technologies with stable federal support. These projects help St. Paul continue making progress toward its climate goals.

Minneota Public Schools celebrated a major milestone this year as new rooftop solar panels began delivering clear financial and educational benefits. The district reports lower electricity costs and greater budget stability, along with new learning opportunities for students who can now track real time energy production and explore clean energy careers. The project is part of a growing wave of school based solar installations across Minnesota that help districts save money while supporting the state’s clean energy goals. Minneota’s early success shows how local investments in solar can strengthen communities, reduce operating costs, and inspire the next generation of clean energy leaders.