Colorado Heat Pump Rebates

What's available in Colorado

Colorado stacks utility rebates (Xcel for most of the Front Range, Black Hills Energy in the south, Colorado Springs Utilities, Holy Cross Energy co-op in the mountains, plus other muni/co-op programs) on top of a statewide heat pump tax credit. Cold-climate certification is required for the maximum Xcel tier; the state tax credit stepped down from $1,500 to $1,000 for 2026 installs under SB23-016. Federal HEEHRA-funded rebates (CO HEAR) ran out of Front Range / Region 1 funding in April 2026 — new Region 1 applications are being denied while Western Slope, Eastern Plains/San Luis Valley, and Mountain Communities regions may still have headroom (confirmed still the case as of June 2026).

HEEHRA in Colorado

HEEHRA rebate: Point-of-sale rebate up to $8,000 for households at or below 80% of area median income. Funded by the IRA, administered by each state. Colorado HEEHRA is fully reserved as of 2026-04-28 — new applications go on a waitlist for any returned funds.

How heat pump rebates work in Colorado

Colorado's 2026 incentive picture has three layers that homeowners stack: a statewide tax credit ($1,000 in 2026, stepping down per SB23-016 through 2032), utility rebates (Xcel Energy is by far the largest at up to $9,000 for cold-climate ASHPs at $2,250/ton, Black Hills Energy at $1,500 in the south, Colorado Springs Utilities at up to $3,000 for cold-climate units, and Holy Cross Energy at $3,500 in mountain communities), and the federally-funded CO HEAR program for income-qualified households (up to $8,000 for ≤80% AMI, $4,000 for 80-150% AMI). The catch in spring 2026: Front Range / HEAR Region 1 funding was fully reserved as of April 28, 2026, and new project proposals in Region 1 are being denied per a CEO contractor notice. Western Slope and Eastern Plains / San Luis Valley / Mountain Communities regions may still have funding. The state heat pump tax credit is delivered as a point-of-sale discount through a CEO-registered contractor (the contractor retains up to two-thirds of the credit value, the homeowner sees the remainder as an invoice discount), and it stacks freely with utility rebates.

Colorado rebate programs

6 utility-specific programs not shown here. Enter your ZIP in the calculator to filter to just your utility.

A worked example: cold-climate heat pump in Denver

Priya owns a 2,000 sq ft home in north Denver served by Xcel Energy (combined gas + electric service). Her 22-year-old gas furnace is failing. She gets quotes for a 3-ton cold-climate ducted heat pump (Mitsubishi Hyper Heat H2i, NEEP cold-climate certified, 19 SEER2 / 10.5 HSPF2, ≥70% capacity at 5°F vs 47°F) installed alongside the existing gas furnace as a dual-fuel system. Installed cost: $15,800. Because Xcel pays $2,250/ton for cold-climate-certified ASHPs and she's a combined gas+electric Xcel customer, she qualifies for the full Xcel rebate at $2,250 × 3 = $6,750. The Colorado state heat pump tax credit at $1,000 for 2026 is delivered as a point-of-sale discount through her CEO-registered contractor — she sees roughly $333 (the homeowner share after the contractor retention) on her invoice. Her household income is approximately 95% of Denver's AMI — above the 80% threshold for CO HEAR's full-cost tier but eligible for the 80-150% AMI tier at $4,000 (if Front Range funding is still available; as of April 2026 it was fully reserved). For this scenario assume HEAR Region 1 funding is exhausted and Priya gets $0 from HEAR. Combined stack: $6,750 + $333 = $7,083 against $15,800. Net out-of-pocket: $8,717.

Choosing a contractor in Colorado

Colorado licenses HVAC contractors at the municipal level (Denver, Aurora, Colorado Springs, etc.) rather than statewide. Verify your contractor's local license through the city building department where the install will happen. For the state heat pump tax credit, the contractor must be registered with the Colorado Energy Office — verify at energyoffice.colorado.gov/hptc. For the Xcel cold-climate tier ($2,250/ton), the equipment must appear on the NEEP cold-climate heat pump list (ashp.neep.org) with ≥70% capacity retention at 5°F. Ask your contractor for the AHRI certificate AND the NEEP listing screenshot at the quote stage — both are required for the Xcel rebate.

Common pitfalls for Colorado homeowners

• Assuming you qualify for CO HEAR Front Range / Region 1 funding. As of April 28, 2026 per a CEO contractor notice, new Region 1 (Front Range / Denver / Boulder / Colorado Springs) HEAR project proposals are being denied because funding is fully reserved. Western Slope, Eastern Plains, San Luis Valley, and Mountain Communities regions may still have headroom. Check the live CEO HEAR status before factoring HEAR into your project budget.
• Missing the Xcel cold-climate certification. Xcel's $2,250/ton tier requires NEEP cold-climate certification with ≥70% capacity retention at 5°F, plus 18 SEER2 / 11.7 EER2 / 8.1 HSPF2 / 1.75 COP@5°F. Non-cold-climate equipment qualifies for a much smaller standard tier. Equipment that meets SEER2 but not the cold-climate capacity retention will be rejected at processing.

Estimate your net cost

How to claim each rebate

1. Get pre-approved (where required). Some utility programs require approval before install. Check program details before signing a contract.
2. Use a participating contractor. Many programs require a licensed installer from an approved contractor list — especially HEEHRA, which routes through CEC-approved contractors who process the rebate at point of sale.
3. Save documentation. AHRI certificate, model numbers, and itemized invoice are required for most utility rebates.
4. Submit utility rebate within 60–90 days of install. Some programs are first-come first-served and close mid-year — funding can run out before the calendar year does.

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