Colorado Heat Pump Rebates
Stackable incentives available to Colorado homeowners installing a qualifying heat pump in 2026.
Rebate data is re-verified against primary sources every two months.
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, and Xcel has told trade partners its gas-customer bonus steps down on October 1, 2026 (cold-climate from $2,250/ton to $1,500/ton), so installs invoiced before that date get the larger rebate. The state tax credit stepped down from $1,500 to $1,000 for 2026 air-source installs under SB23-016, with $2,000 for ground/water-source and $250 for heat pump water heaters. The federally funded CO HEAR program is now closed for single-family projects statewide: Region 1 (Front Range) stopped reviewing applications after April 27, 2026, and Region 2 (Western Slope, Eastern Plains/San Luis Valley, Mountain Communities) accepted applications only through August 1, 2026. Denver-metro homeowners have a new option in DRCOG's Power Ahead Colorado $1,500 cold-climate heat pump rebate, launched July 2026; Denver's own Climate Action Rebate (CARe) heat pump program exhausted its funding in 2025 and has not reopened.
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 closed as of 2026-09-07 — funding fully exhausted.
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 through September 30, 2026, stepping down to $1,500/ton for installs on or after October 1, 2026, 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 as of August 2026: CO HEAR is effectively finished for single-family projects statewide. Region 1 (Front Range) closed on April 27, 2026 — the Colorado Energy Office says applications submitted after that date will not be reviewed — and Region 2 (Western Slope, Eastern Plains, San Luis Valley, Mountain Communities) accepted applications only through August 1, 2026. Denver-metro homeowners have a new alternative: DRCOG launched the Power Ahead Colorado $1,500 cold-climate heat pump rebate in July 2026 (contractor preapproval is required before work begins). 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
Xcel Energy Heat Pump Rebate
$9,000Cold-climate ASHP rebate paid per heating ton at 5°F: $2,250/ton for cold-climate-certified systems (NEEP-listed, ≥70% capacity at 5°F vs 47°F, 18 SEER2 / 11.7 EER2 / 8.1 HSPF2 / 1.75 COP@5°F) for systems installed and invoiced before 2026-10-01 (application due by 2026-10-15); standard ASHPs get $900/cooling ton. Xcel told trade partners the gas-customer bonus steps down on 2026-10-01 to $1,500/ton cold-climate and $600/ton standard, so a 3–4 ton install drops from $6,750–$9,000 to $4,500–$6,000. Requires Xcel gas service (gas-only or combined gas+electric); electric-only customers are not eligible for the cold-climate ASHP tier.
Colorado Heat Pump Tax Credit
$1,000State income tax credit administered as a point-of-sale discount through registered contractors. Amount varies by equipment: $1,000 for an air-source heat pump (minimum $333 customer discount), $2,000 for ground-, water-, or combined-source heat pumps (minimum $667 discount), and $250 for a heat pump water heater (minimum $83 discount). The Colorado Energy Office states the credit may be combined with HEAR or HER rebates when the contractor is registered with both programs; HEAR and HER may not be combined with other federal grants for the same single upgrade. A further step-down is scheduled for tax year 2029.
CO HEEHRA (income-qualified)
$8,000CLOSED. The Colorado Energy Office closed HEAR single-family Region 1 (Front Range) to new applications after 2026-04-27, and Region 2 (Western Slope, Eastern Plains/San Luis Valley, Mountain Communities) accepted applications only until 2026-08-01 unless funding was reserved sooner — both deadlines have now passed. Households are not guaranteed a rebate until they and a registered contractor receive a formal reservation notice.
Black Hills Energy CO Electric Residential Heat Pump Rebate
$2,500$1,500 for qualifying air-source heat pumps (≥15.20 SEER2 / 11.9 EER2 / 8.1 HSPF2) or ductless mini-split heat pumps; a higher $2,500 tier applies to cold-climate ASHPs (geothermal $1,700, HPWH $500). Black Hills Energy electric customers in southern Colorado; rebate applications for 2026 work due by 2027-01-31.
Colorado Springs Utilities Heat Pump Rebate
$3,000$1,500 electric bill credit for ENERGY STAR heat pumps under 3 tons; $3,000 for NEEP cold-climate heat pumps 3 tons and over. CSU natural gas customers only. Equipment must be purchased and installed Jan 1 – Dec 31, 2026; applications due by Jan 31, 2027.
Holy Cross Energy Heat Pump Rebate
$3,500$3,500 for all members; $7,000 for income-qualified households (≤150% AMI). Covers cold-climate air-source (ducted/ductless), ground-source, air-to-water, and split-hydronic systems. Requires HSPF2 ≥9 (ducted) or ≥10 (ductless). HCE members in Aspen/Glenwood Springs/Eagle Valley territory. Up to $5,000 total rebates per account per year ($10,000 income-qualified).
Power Ahead Colorado Heat Pump Rebate (DRCOG)
$1,500$1,500 rebate for ENERGY STAR cold-climate air-source heat pumps installed in existing homes, multifamily and commercial buildings in DRCOG member cities and counties (Denver metro), launched in July 2026 as a Front Range option now that HEAR Region 1 is closed. No income test; new construction and geothermal are not eligible. Work must be done by a contractor on the Power Ahead Colorado Contractor Finder, and the contractor must submit the project for preapproval before work begins. DRCOG says it stacks with utility and local rebates and the state tax credit; funded by a four-year $40 million program.
7 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
- Budgeting a 2026 project around CO HEAR. Both HEAR single-family regions have now closed. Region 1 (Front Range / Denver / Boulder / Colorado Springs) stopped accepting applications after April 27, 2026 — the Colorado Energy Office states applications submitted after that date will not be reviewed and will be denied — and Region 2 (Western Slope, Eastern Plains, San Luis Valley, Mountain Communities) ran only through August 1, 2026. Don't build a 2026 budget around HEAR. Denver-metro homeowners should look at DRCOG's Power Ahead Colorado $1,500 cold-climate heat pump rebate instead (the contractor must submit the project for preapproval before work starts), and everyone can still use the state heat pump tax credit plus their utility rebate.
- Missing the Xcel cold-climate certification. Xcel's cold-climate tier ($2,250/ton for systems invoiced before October 1, 2026, $1,500/ton after) 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
Used to determine HEEHRA eligibility (under 80% area median income).
- Xcel Energy Heat Pump Rebate−$9,000
- Holy Cross Energy Heat Pump Rebate−$3,500
- Colorado Springs Utilities Heat Pump Rebate−$3,000
- Black Hills Energy CO Electric Residential Heat Pump Rebate−$2,500
- Power Ahead Colorado Heat Pump Rebate (DRCOG)−$1,500
- Colorado Heat Pump Tax Credit−$1,000
Estimate only. Includes only programs accepting applications today — waitlisted or closed programs are excluded. Mutually exclusive programs (e.g. HEEHRA vs HOMES) and project-cost caps are applied per current program rules; confirm with your installer and utility before signing.
How to claim each rebate
- Get pre-approved (where required). Some utility programs require approval before install. Check program details before signing a contract.
- 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.
- Save documentation. AHRI certificate, model numbers, and itemized invoice are required for most utility rebates.
- 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.
If you can't afford a replacement in Colorado
Rebates lower the price, but they still assume you can pay the rest. If your heating system is unsafe or has failed and a new one is out of reach, these programs repair or replace equipment at low or no cost for income-qualified households. Heat Pump Pricing Index is an independent information site — we don't fund, discount, or install equipment — so these are the doors to knock on first:
- Weatherization Assistance Program (WAP). Free energy and health-and-safety repairs — an unsafe furnace is exactly the kind of problem it fixes — for households at or near 200% of the poverty line. Apply through your local community action agency: how to apply (energy.gov).
- LIHEAP. Heating-bill help plus, in most states, a crisis component for broken or dangerous heating equipment. Same local agency; Colorado LIHEAP contacts.
- USDA Section 504 Home Repair. For homeowners outside cities: 1% loans up to $40,000, and grants up to $10,000 for homeowners 62 and older to remove health and safety hazards. Program page and state offices (rd.usda.gov).
- Your utility and 211. Most electric and gas utilities run an income-qualified assistance fund — call the number on your bill and ask. Dialing 211 reaches a local specialist who knows which agencies in Colorado currently have funds.
Safety first: if a technician has told you a heat exchanger is cracked, stop using the furnace and make sure you have a working carbon monoxide detector before anything else.