It’s been a busy (and hot) summer in Colorado, and things are starting to cool off a bit. But not so in the heat pump world.
As we fall (pun intended) into sweater season, there have been many recent changes in some rebates and incentives for heatpumps, and we wanted to send you the most recent updates so you can potentially plan ahead.
Here’s a short list of recent updates that pertain mainly to the Denver Metro / Front Range area.
And fear not! The incentives still add up to a potentially incredible amount, but we don’t know how long these will last.
Latest Heat Pump Incentive Updates (Largely For The Front Range):
Xcel Energy Heat Pump Rebate Updates:
If you currently heat your home with natural gas and have a furnace or boiler, there are no rebate changes! If you switch to a qualified cold climate heat pump system, there is still $2,250/ton. For most heat pump systems that we install, the average Xcel rebate is between $6,000 and $9,000.
Also for projects installed and invoiced after November 16, 2025 and per Xcel’s latest update email to us heat pump contractors in the rebate program:
- Bonus rebates will not apply to rebates for heat pumpequipment that replaces existing electric heating, such as electric baseboard resistance heat, an electric furnace or an electric water heater.
- Xcel Energy retail customers may be eligible for bonuses even if their electricity or gas is provided by a different utility.
- Xcel Energy will continue to offer standard heat pump rebates for energy efficient HVAC improvements that provide electric energy savings. Currently these rebates are $300 per cooling ton at 95 F for qualifying Air Source Heat Pump systems, $750 per heating ton at 5 F for qualifying Cold Climate Air Source Heat Pump systems and $750 for a Heat Pump Water Heater.
If you have questions about what rebates you may or may not qualify for, feel free to call us at 303.525.HEAT or email us here.
Federal Heat Pump Tax Credit:
Per the recent One Big Beautiful Bill (OBBB) passing, the heatpump tax credits and electrical branch circuit tax credit now expire December 31, 2025. You can still get $2,000 for the heat pump and up to $600 for electrical upgrades through 12/31/2025.
This is true for heat pump water heaters as well, as the 25C combines both HVAC and water heating into one in terms of the tax credit per our understanding (speak to your CPA or tax professional to confirm).
City of Boulder:
As of September 8th, the City of Boulder funding has been exhausted for 2025. They are still accepting applications to go onto their waitlist, but the good news is that Boulder County and AMI-based Income Qualified homeowners are still able to receive rebates.
City of Denver:
Heat pump and home electrification rebates have been allocated and exhausted since the spring of this year.
State of Colorado:
The State heat pump tax credits are available through the end of 2025 (as we understand) and are still a total of $1,500 per home with a qualified heat pump installation.
UPDATE: As of October 13, 2025, the 2026 State of Colorado heat pump HVAC tax credits will be lowered to $1,000 in total. For heat pump water heaters will be lowered to $250.
Shared directly from the recent email from the Colorado Energy Office [CEO] we got:
Change to tax credit values
The following changes are required to take effect in 2026 per Tax Policy that Advances Decarbonization (HB23-1272) and Implement State Climate Goals(HB24-214):
| Heat Pump Type | 2026 Tax Credit Amount Per Heat Pump Unit | Customer Discount (33%) | Contractor Share |
|---|---|---|---|
| Air-source | $1,000 | $333 | $667 |
| Ground-source | $2,000 | $667 | $1,333 |
| Water heater | $250 | $83 | $167 |
The same program policies are still in place. As a reminder, for all eligible equipment you plan to claim a tax credit for, you must pass a minimum discount of 33% of the credit (see amounts above) to your customer in the form of a line-item on the invoice. Â
Between the Federal and State tax credits now going away, you’ll be eligible for at least $2,500 less in total tax credits given the changes if we assume all other utility, city, county, and other incentives for heat pumps stay the same.
Are you curious about what rebates and tax credits you might get for your own home? You can Contact Us here to learn more and to see what incentives you might be able to maximize before year’s end.
