While Minnesota is making progress reducing emissions in its electricity and transportation sectors, there’s one sector that’s getting much worse: buildings. The way we heat our homes and businesses is the fastest-growing source of emissions in the North Star state, and unlike other sectors, emissions from buildings are expected to grow by nearly 50% over the upcoming decade. As Minnesota takes significant steps toward meeting its greenhouse gas (GHG) reduction targets, it’s time for a bold policy solution to address building emissions through a Minnesota Heat Standard.
Fresh Energy has helped Minnesota adopt forward-looking policies to reduce emissions for over 30 years. We made historic progress during the 2023 legislative session when the Minnesota Legislature passed the 100% clean electricity law, ensuring Minnesotans will receive 100% carbon-free electricity to power their lives by 2040. Already, the electricity sector has reduced emissions by 50% since 2005 thanks to important policies Minnesota has passed. We know ambitious policy works, and we can’t afford to slow down: We need all sectors to rapidly decarbonize.
Minnesota is known for its cold winters. It’s also known as a Midwestern climate leader. A Minnesota Heat Standard would cost-effectively, equitably transition how we heat our buildings to be carbon-free. Keep reading to learn how it works.
How the Minnesota Heat Standard would work
The Minnesota Heat Standard (MHS) is a market-based program and policy that reduces greenhouse gas emissions by creating financial incentives for installing cleaner, more sustainable heating technologies than burning imported fossil fuels.
To do this, the MHS would establish time-bound targets for increasing the number of projects converting fossil fuel-based heating systems to clean energy technologies. It would identify fossil fuel utilities and providers as those responsible for ensuring the energy transition happens at the scale and pace needed to reduce GHG emissions.
Similar to our successful clean electricity law, the MHS would create a market-based mechanism that rewards the adoption of clean heating technologies while setting declining caps on carbon-intensive heating methods.
The Minnesota Heat Standard would decrease building emissions by:
- Setting a timeline for switching to clean energy heating systems: The MHS would establish clear targets and deadlines for transitioning away from fossil fuel heating.
- Making fossil fuel utilities and providers responsible: These entities would be responsible for meeting the established timelines and targets.
- Supporting clean technologies: The MHS would provide incentives for technologies like heat pumps, networked geothermal systems, and induction heating.
- Encouraging neighborhood-scale projects: By incentivizing utilities and energy providers to deploy clean energy technologies at a neighborhood scale, the MHS would achieve more significant impacts.
- Rethinking business as usual: The MHS would help utilities move away from continued investment in gas infrastructure that locks ratepayers into higher costs and emissions for decades.
This market-based mechanism would generate credits for clean energy technology through fossil fuel to clean energy conversion projects. These credits create a financial incentive that helps reduce the upfront costs of transitioning to clean heating systems and passes on savings to customers.
A Minnesota Heat Standard would benefit all Minnesotans
Implementing the MHS would not only reduce climate emissions from how we heat our homes and buildings but would also provide numerous other benefits:
- Environmental benefits: The MHS would significantly reduce GHG emissions, helping to mitigate climate change and improve air quality in Minnesota communities.
- Economic benefits: By fostering a market for clean heating technologies, the MHS would drive job creation in the manufacturing, installation, and maintenance of clean thermal systems across the state.
- Financial resilience: More diverse thermal energy sources would reduce dependence on volatile fossil fuel markets and reduce the dollars Minnesota sends out of state to import fossil fuels. This would insulate customers from national and international price surges, especially during extreme cold weather events.
- Consistent funding via ongoing marketplace: The MHS would provide consistent funding for clean energy projects by establishing an ongoing financial marketplace for credit exchange.
- Support for under-resourced communities: The MHS provides greater incentives or leverages MHS-generated funding to support clean heating projects among under-resourced communities, embedding equity into the program.
Other states are already benefitting from clean heat standards
Minnesota isn’t the first state to recognize the benefit of a heat standard, often called Clean Heat Standards (CHS) in other states. Other cold-weather states like Colorado, Vermont, and Massachusetts are already proving that electrification and energy efficiency work in cold climates — and save customers money.
These states have implemented similar policies that are accelerating the transition to clean heating technologies, creating jobs, and reducing GHG emissions. Their success shows that Minnesota can also benefit from a well-designed heat standard that takes into account our unique climate and energy needs.
By joining these states in implementing a heat standard, Minnesota would continue positioning itself as a leader in the Midwest in homegrown heating solutions, creating jobs, and reducing reliance on imported fossil fuels.
What’s next?
Fresh Energy is working with partners to conduct research, engage stakeholders, and gather diverse perspectives to shape a policy that delivers the most cost-effective and equitable impact for Minnesota.
The MHS represents a critical opportunity to address our state’s fastest-growing source of emissions. By implementing this policy, Minnesota can build on the success of our 100% clean electricity standard and take another significant step in creating an equitable carbon-neutral economy.
Stay tuned as Fresh Energy supports the MHS in the Legislature. To stay up to date on Fresh Energy’s latest policy initiatives and news, be sure to sign up for our monthly Powering Progress newsletter as we build an equitable, decarbonized Minnesota.
