Colorado Heat Pump Rebates in 2026 — What’s Actually Left
The federal credit expired. Colorado’s did not. Here is every incentive a Front Range homeowner can still claim this year, what each one is worth, and which ones we file on your behalf.
The federal 25C Energy Efficient Home Improvement Credit — the one worth up to $2,000 on a heat pump — expired on December 31, 2025. It was ended by the One Big Beautiful Bill Act in July 2025 and it does not apply to any system installed in 2026. If a quote you are comparing subtracts a federal credit, that quote is overstating your savings.
Every 2026 Colorado Incentive at a Glance
| Program | Heat pump | Water heater | Panel | Income limit? |
|---|---|---|---|---|
| Federal 25C | Expired | Expired | Expired | — |
| Colorado state tax credit | $1,000 air-source $2,000 ground-source | $250 | — | No |
| Xcel Energy | $750/heating ton (cold climate) $300/cooling ton (standard) | Varies | — | No |
| HEAR | Up to $8,000 | Up to $1,750 | Up to $4,000 | Yes — under 150% AMI |
| Power Ahead Colorado | Being finalized | Being finalized | — | Tiered |
| Longmont Power | Up to $4,000 | Varies | — | No |
| United Power | Up to $2,500 | Varies | — | No |
| Boulder County / Energy Smart | Up to $400 | Varies | — | No |
Program terms change. We verify current amounts against each program before your proposal goes out, and your written proposal lists exactly what we expect to secure for your job.
The Details
Colorado Heat Pump Tax Credit
$1,000The workhorse of Colorado heat pump incentives, and the one that requires the least effort from you. It is structured as a credit claimed by the contractor, who is required to pass a minimum discount through to the customer — so it shows up as a line item on your invoice, not as something you chase at tax time.
- Air-source heat pump: $1,000 credit, minimum $333 customer discount
- Ground-source / geothermal: $2,000 credit, minimum $667 customer discount
- Heat pump water heater: $250 credit, minimum $83 customer discount
To qualify: the equipment must be ENERGY STAR certified. Air-source systems must be AHRI-matched and sized to meet at least 80% of the home’s annual heating load — which is another reason the load calculation matters.
No paperwork for youNo income limitApplied on our invoiceXcel Energy Rebates
$300–$750 / tonXcel pays per ton of capacity, and the cold-climate rate is more than double the standard rate — which is a strong argument for specifying a true cold-climate system in Colorado even before you consider performance.
- Cold-climate air-source heat pump: $750 per heating ton
- Standard air-source heat pump: $300 per cooling ton
- Elevated amounts in designated mountain ZIP codes under the Mountain Energy Project
Xcel has stopped promoting these rebates prominently on its own website, which means a lot of homeowners never hear about them. We file the paperwork as part of the job.
We file itNo income limitXcel electric customersHEAR — Home Electrification & Appliance Rebates
Up to $14,000Income-qualified, point-of-sale, and by far the largest pot of money available. If your household is under 150% of area median income, this changes the entire economics of the project.
- Heat pump (space heating/cooling): up to $8,000
- Heat pump water heater: up to $1,750
- Electrical panel upgrade: up to $4,000
- Cap across all measures: $14,000
At or below 80% AMI: up to 100% of project cost covered. Between 80% and 150% AMI: up to 50% of project cost covered.
Income-qualifiedPoint of saleRegistered contractor requiredPower Ahead Colorado
$40M fundAdministered through the Denver Regional Council of Governments, launched in January 2026 with roughly $40 million earmarked for heat pump and heat pump water heater rebates, plus free installations for around 2,000 low-income households.
Final per-project amounts were still being set as of spring 2026. We track this one closely because it stacks with Xcel and with the state credit — call us for the current status before you commit to a project.
Amounts still firming upDenver regionStacks with XcelMunicipal & Co-op Utilities
$400–$4,000If you are not an Xcel customer, your own utility likely has its own program — and some of them are more generous.
- Longmont Power & Communications: up to $4,000
- United Power: up to $2,500
- Platte River Power Authority (Fort Collins, Loveland, Longmont, Estes Park): programs available through member utilities
- Boulder County / Energy Smart Colorado: up to $400
- Summit and other mountain counties: Energy Smart rebates
What This Looks Like on a Real Invoice
Two illustrative Denver examples. Your numbers depend on your home, your equipment, your utility, and your income bracket — these are shaped to show how the programs layer, not as a quote.
Example A — no income qualification
3-ton cold-climate ducted heat pump, dual-fuel with the existing furnace retained, Xcel territory.
| Colorado state credit | −$1,000 |
| Xcel cold-climate ($750 × 3) | −$2,250 |
| Federal 25C | $0 |
| Total reduction | −$3,250 |
Example B — income-qualified under 80% AMI
Same system, plus a heat pump water heater and a panel upgrade, household under 80% of area median income.
| HEAR — heat pump | up to −$8,000 |
| HEAR — water heater | up to −$1,750 |
| HEAR — panel upgrade | up to −$4,000 |
| HEAR cap applies | −$14,000 max |
Program rules govern how HEAR interacts with the state credit and utility rebates on the same measure. We work that out for your specific job before you sign.
How We Handle the Paperwork
- We confirm your utility and your eligibility
Which utility serves you determines which rebates apply. Income-qualified programs need documentation, and we tell you exactly what to gather.
- Equipment is selected to qualify
ENERGY STAR certification, AHRI matching, and cold-climate designation all affect which rebates you can claim. We pick equipment that qualifies for the most money, not just equipment that works.
- Your proposal itemizes every dollar
Gross price, each incentive on its own line, and a net number. Nothing vague, nothing assumed.
- Discounts apply at the invoice
The Colorado credit and point-of-sale programs reduce what you pay us. You are not floating the money and waiting.
- We file the utility rebates
Xcel and municipal utility submissions are ours to handle, including the AHRI documentation and invoices they ask for.
Rebate Questions
Is the federal heat pump tax credit really gone?
Can I stack the Colorado credit with Xcel rebates?
How do I know if I qualify for HEAR?
Do I need to do anything to get the Colorado credit?
What if the rebate does not come through after the install?
Find Out What You Actually Qualify For
Tell us your address, your utility, and roughly what you are trying to replace. We will come back with the specific programs that apply to your house and what they are worth.