Lakefront MN City Uses Investment Tax Credit To Save Residents Money
Joining a municipal solar cohort and working with other small towns made it possible to apply for federal funding.
Funding Legislation
Inflation Reduction Act
Partner Organization
West Central Initiative
August 18, 2026
By Lisa Abelar
When Julie Bruhn retired and moved back to her hometown in Vergas, Minnesota, she wasn’t looking for a “job-job,” she said. But she wanted something that would offer a step down from the fast-paced career she had as a healthcare executive. So, she joined the Vergas City Council, and in 2019 was elected mayor, leaning into her family’s legacy.
Her dad had served as mayor for a time. Her brother, too.
“I didn’t want to go from 200 miles-per-hour to nothing,” Bruhn said.
Vergas is a small community of about 360 people. It’s surrounded by lakes, offering a landscape that is an outdoor lover’s dream in both the summer and winter months. It’s a place to slow down, and the city’s economy is dependent almost entirely on folks who decide to visit the quaint community known for having what once was the world’s largest loon.
“We’re just water everywhere. We live on tourists and visitors,” Bruhn said. “It’s rural but you don’t feel isolated or in the middle of nowhere because of the lakes. It’s very developed.”
As with many small communities, Vergas has a limited tax base, so funding for municipal projects can sometimes be tricky. After attending a conference in 2023 hosted by the League of Minnesota Cities, Bruhn came back to Vergas with new financial tools the city could use to bolster its energy infrastructure. Public entities, she learned, were now allowed to take advantage of federal tax incentives for clean energy projects.
“You hear this and you think, ‘Why not us?’” she said.
Two of the city’s municipal buildings needed weatherization updates. The former creamery, now used as the municipal liquor store and business space, was letting heated and air conditioned air out of its elevator shaft. And the insulation around the event center, a building that used to be a city school, didn’t secure the entire structure.
“It’s like, we know how much the climate impacts the buildings,” Bruhn said. “The terrible cold and the real heat and the winds. This could be a real win-win. We could improve infrastructure and save residents money by becoming more energy efficient.”
While navigating funding for those projects, Bruhn connected with West Central Initiative (WCI), a regional planning organization that had formed a 10-community municipal solar cohort. Joining the cohort allowed Bruhn to work with WCI to secure a solar array and battery backup system for the Vergas event center and pay for it largely with federal incentives and other rebates. WCI’s staff helped Bruhn and her team navigate the process and the organization offered the city a zero-interest bridge loan to cover the small gap in funding.
By trimming the cost of ongoing electrical expenses, Vergas will have more flexibility with its budget for other projects that benefit the community. Those living in Vergas are passionate about protecting the lakes and the environment, and by saving costs elsewhere it makes opportunities available for those types of initiatives.
“In the end, it isn’t a long-term fiscal investment. We’re going to be able to, with the energy savings, have a return on investment in a couple years,” Bruhn said. “If there is a disaster, we have a place for residents to go to charge phones and equipment. It becomes a great hub for us to sustain our community.”
The federal Investment Tax Credit that WCI is helping Vergas secure will cover about 30% of project costs, and a rebate from Otter Tail Power covered an additional 50% of the $104,000 total. Vergas only had to come up with about $6,000 for the project. As an environmentally-minded community, one that recently became a Minnesota GreenStep city, it made sense for Vergas to improve its energy efficiency and its resilience. Bruhn said WCI’s support was vital to completing the project, since the city only has five staff members.
Next, the community plans to work on a childcare initiative with WCI.
“I look at it and think I wouldn’t even know where to begin. Without their expertise and technical support, once we were on that whole journey, it’s been invaluable,” Bruhn said. “We don’t have all that knowledge. We don’t even have the capacity.”
