With heat pump systems replacing traditional furnaces, boilers, and air conditioners at a rapid pace, it can be confusing just to figure out what they are, how much it might cost, and what exactly you can get for rebates and tax credits.
In this article, I wanted to share quickly what the excitement is about heat pumps installs going in around Arvada, and perhaps most importantly, what rebates and incentives you can get.
What Is A Heat Pump?
To start off – what’s a heat pump anyway? Well, it’s actually much like regular air conditioner technology. Heat pumps uses refrigeration to cool your indoor air, but they are called heat pumps specifically because they can reverse the refrigeration cycle.
This means they can heat your space too, allowing for the replacement of older gas or electric heating technology. So when you upgrade to a heat pump, you can have one unit that heats and cools your home year round. Here is a quick list of old systems that heat pumps are a great replacement for –
- Boilers
- Electric or Gas Baseboard Heat
- Furnaces
- Older Air Conditioners (lower efficiency)
- Electric Resistance
- Propane or Oil Heating Systems
What Incentives Are Available in Arvada?
Heat pumps can be confusing, but figuring out rebates and incentives and can really confusing. Not to worry though, I’m going to list out what’s currently available if your home is in Arvada.
Xcel Energy’s Heat Pump Rebate
Xcel Energy has a $1,700 to $2,200 rebate for heat pump installations. You have to meet certain efficiency standards in order to get this. And to qualify for the full $2,200, you must get a cold-climate heat pump version (which we always like to install for customers anyway).
There is a lot of documentation that we have to submit with this rebate in terms of correct heat pump design, home energy modeling, specific equipment documentation, and more.
We submit it on your behalf and it takes a bit of time. The good news is, these strict requirements mean you get a great cold-climate system to heat and cool your home for the next 15-20 years.
You can read more about Xcel’s rebate on their website here.
Colorado State’s Shared Tax Credit
While it’s still a bit convoluted at the moment, this is a total of $1,500, with a minimum $499.95 shared with the homeowner as an up-front invoice-based discount.
The tax credit is then submitted at the end of the year at tax time by the heat pump installation contractor. The equipment standards are similar to Xcel Energy’s in terms of quality and efficiency, so we make sure the heat pump qualifies across all rebates.
Check out more on this tax credit on the official state website here.
Federal IRA Heat Pump Tax Credit
This is another great tax credit, and one you can get every year! It’s specifically for 30% of the project cost up to $2,000 maximum amount for heat pumps.
You have to meet similar strict and verified equipment specifications that are similar to the above. One other thing to watch out for is to know that if you are doing a heat pump water heater and a new heat pump HVAC system at the same time, both of those count towards the same heat pump tax credit.
Some of our customers like doing our heat pump HVAC install the first year, for instance, and then doing the heat pump water heater the next year, or vice versa. This would allow you to get up to $2,000 each year for the projects, and up to $4,000 total.
You can read more about this federal incentive here.
An Example of a Heat Pump Project in Arvada With Rebates
Just for a quick example, let’s assume you need a new 4 ton cold climate heat pump to replace your old furnace and air conditioning system.
Every home is different, but let’s say this system is a total install cost of $22,000. Here is what the net cost could look like if all rebates were accepted by the representing organizations mentioned above:
| Install Price: | $22,000 |
| Xcel Cold Climate Rebate: | – $2,200 |
| Colorado State Mandated Discount: | – $499.95 |
| Federal IRA Heat Pump Tax Credit: | – $2,000 |
| Net Cost: | $17,300.05 |
So that’s pretty much it! There’s a lot of work on the back end, but we just wanted to quickly explain the incentives available in Arvada.
We do the install and take care of the incentives paperwork as well. If you’re interested in getting a quote or exploring a new heat pump for your own home, feel free to contact us here!
I hope this was helpful and good luck on your heat pump journey!
