Green Driver State Incentives in Minnesota

Minnesota's green-minded drivers enjoy a handful of money-saving incentives. Whether you currently drive an electric car, hybrid, or an alternative fuel vehicle—or are in the market to buy a fuel-efficient vehicle—read on for perks designed to encourage MN residents to adopt eco-friendly driving habits.

As Minnesota more heavily focuses on environmental issues, the incentives below might change, as well as the laws specific to protecting the environment. Keep pace by also consulting your local Minnesota Driver and Vehicle Services branch and the Alternative Fuels Data Center.

Minnesota Vehicle Emissions Testing

At this time, the MN Driver and Vehicle Services does not test emissions for the purposes of first-time vehicle registration and registration renewal. Therefore, there are currently no inspection exemption incentives for fuel-efficient vehicles. However, you can still do your part by adopting ways to reduce pollution from vehicle emissions.

MN Auto Insurance Discounts for Eco-Friendly Driving and Green Vehicles

Get a break on what you pay for your car insurance for having green driving habits and/or driving a fuel-efficient vehicle. Consult your car insurance company about potential green vehicle auto insurance discounts such as:

  • Pay as you drive discounts.
  • Economy car discounts.
  • Hybrid auto discounts.
  • Alternative fuel vehicle (AFV) discounts.
  • Low-mileage discounts.

Not all auto insurance providers offer the same discounts. What's more, your specific circumstances might also vary how much you save. Combined discounts can offer big savings. Most plans offer a discount for yearly low mileage. Add that to a 10% discount on car insurance for owning or leasing a hybrid car and you are looking at big savings.

It's important to compare auto insurance rates online to make sure you get the best savings.

Federal Tax Credits for Going Green

The Internal Revenue Service (IRS) gives eco-friendly drivers a tax break for buying fuel-efficient vehicles such as:

  • Electric cars (EV).
  • Hybrids.
  • Plug-in hybrids (PHEV).
  • Diesels.
  • Alternative fuel vehicles (AFV).

Get the specifics at

For help on taking advantage of these federal tax credits, consider consulting a tax professional or your local IRS Taxpayer Assistance Center.

Reduced Charging Rates for MN Plug-In Hybrid Electric Vehicles (PHEV)

Dakota Electric Association offers reduced rates for customers with plug-in hybrid electric vehicles through a pilot program called ChargeWise. To be eligible for the discount, members must use a ChargeWise circuit to charge their PHEV batteries during low-demand hours (11 p.m. and 7 a.m.). For more info, call (651) 463-6243.

Minnesota Idle Reduction Technology Incentives

Minnesota encourages drivers to reduce fuel use and emissions by offering two incentives involving the use of idle-reduction technology: a weight credit and a loan program. Check out the sections below for more.

Idle- and Emissions-Reduction Technology Weight Exemption

MN allows motor vehicles equipped with idle- and emissions-reduction technology to exceed maximum gross vehicle weight limits and axle weight limits by up to 550 lbs to make up for the added weight of having such technology. To take advantage of the weight credit, vehicle operators must prove their vehicles have this type of technology—via documentation or demonstration—either to the MN Department of Transportation or the Department of Public Safety.

For full details, refer to Minnesota Statutes 169.824.

Small Business Environmental Improvement Loan

The Minnesota Pollution Control Agency offers the Small Business Environmental Improvement Loan Program to help financially support small businesses—driving-related and otherwise—in their efforts to go green. Particularly, long-haul truck drivers can apply for aide to purchase auxiliary equipment to reduce idling.

The agency designed the loan program to help offset the initial financial impact small businesses experience when trying to buy equipment either to meet or exceed regulatory obligations for protecting the environment. A variety of businesses can apply for the loan as long as they:

  • Are either an existing small business corporation, sole proprietorship, partnership, or association.
  • Can prove they're capable of repaying the loan.
  • Have a net worth that is less than $500,000.
  • Have less than 100 employees (full-time).
  • Generate an after-tax profit of less than $500,000.

To be eligible for funds used for auxiliary power units (APU), your diesel truck engine must meet certain requirements. First check the EPA's resource on Verified Idling Reduction Technologies (select the Idling Reduction tab once the page loads), and then consult the Small Business Environmental Improvement Loan Program.

Propane Vehicle Rebate

The Minnesota Propane Association (MPA) offers a rebate to customers who purchase new propane vehicles* or convert existing vehicles to propane vehicles. To qualify, the vehicle must be:

  • Registered in Minnesota.
  • Converted using systems certified by the U.S. Environmental Protection Agency.

* For new vehicles, the rebate may cover only the additional cost of the propane vehicle over a regular gasoline vehicle.

For more information, contact the Minnesota Propane Association at (736) 633-4271.

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