Navigating the world of heat pump incentives and rebates in Colorado can feel like a daunting task, especially when you’re balancing everything else on your to-do list. Fortunately, we’re here to simplify the process! Great news? Starting January 1, 2025, Xcel Energy’s heat pump rebates have tripled, giving you even more opportunities to save on energy-efficient heating and cooling upgrades for your home.
In this blog post, we’ll walk you through how Xcel’s heat pump rebates work, which systems qualify, and what you need to do to take advantage of these savings. Let’s break it all down.
What Xcel Rebates Are Available in Colorado?
If you’re an Xcel Energy customer in Colorado, there are several heat pump rebate options available to you. The rebates apply to:
- Air Source Heat Pumps (ASHP)
- Ductless Mini Split Heat Pumps
- Ground Source Heat Pumps (GSHP)
Xcel recently updated the rebate structure from flat-rate amounts to rebates based on the heating or cooling load of the system. Rebates now range from $300 to $1,100 per ton depending on the unit’s efficiency. But starting in 2025, these rebate amounts will triple—making this a great time to upgrade your home’s HVAC system.
Air Source Heat Pump Rebates
Air Source Heat Pumps are similar to air conditioning systems but have the added benefit of heating your home as well. These systems typically use existing ductwork, making them a great option when replacing old AC units or gas-fired furnaces.
2025 Rebates for Air Source Heat Pumps:
- Non-Cold Climate ASHP: $900 per cooling ton (at 95°F)
- Cold Climate ASHP: $2,250 per heating ton (at 5°F)
Cold Climate Heat Pump Rebate Example
To help illustrate, let’s look at an example. Suppose you’re installing a Bosch IDS cold climate heat pump that has a heating capacity of 37,800 BTUs at 5°F (from the NEEP Cold Climate Heat Pump List). Here’s how the rebate works:
- Heating capacity: 37,800 BTUs ÷ 12,000 = 3.15 tons
- Rebate: 3.15 tons × $2,250 = $7,087.50, rounded up to $7,090
If you opt for a more powerful model (e.g., the Bosch IDS Ultra, which has 55,000 BTUs at 5°F), your rebate could be as high as $10,311.75.
Additionally, if you participate in Xcel’s Whole Home Efficiency (WHE) program, you could earn a 25% bonus on your rebate, which could increase your rebate by hundreds or even thousands of dollars.
Ductless Mini Split Heat Pump Rebates
What are Ductless Mini Splits? Ductless mini splits use the same technology as air source heat pumps but don’t require ducts to distribute heated or cooled air. Instead, they have individual air handlers installed in each room or zone, making them perfect for homes without existing ductwork. Mini splits are more efficient since they don’t lose heat through leaky ducts.
2025 Rebates for Ductless Mini Splits: While you can use any licensed HVAC contractor to install a mini split, you’ll still need to ensure the equipment meets Xcel’s efficiency requirements to qualify for rebates. This includes the SEER2, EER2, HSPF2, and capacity specifications.
Rebate Process: For mini splits, you’ll need to gather the following information:
- Manufacturer and model numbers
- Efficiency ratings (SEER2, EER2, HSPF2, etc.)
- Installation date
- Number of indoor units
- Verification of cold climate technical specifications (if applicable)
Ground Source Heat Pump Rebates
Ground Source Heat Pumps (GSHPs) are less common but offer the highest energy efficiency. These systems use the stable temperature of the earth to heat and cool your home, providing excellent performance year-round.
2025 Rebate for Ground Source Heat Pumps:
- Ground Source Heat Pump Rebate: $3,300 per heating ton
GSHP systems are the most expensive to install, but with this updated rebate, the cost is more manageable. As with other heat pump systems, you must use an Xcel-approved contractor for this type of installation.
When Will You Get Your Xcel Energy Rebate?
Rebates are typically processed within 6-8 weeks after the installation of your heat pump system. Depending on the agreement with your contractor, the rebate might be applied directly to your invoice, or you may receive a check from Xcel after the installation is completed.
Can You Get Xcel Heat Pump Rebates for Rental and Investment Properties?
Yes! Xcel’s heat pump rebates are available for both residential and rental properties. If you’re installing a heat pump in a rental or investment property, just follow the same process as you would for a primary residence.
Additional Rebates and Incentives
Aside from Xcel’s heat pump rebates, there are a number of other incentives available to help offset the cost of your new system:
- Colorado State Shared Tax Credit: This offers up to $1,500, shared between the installer and the customer.
- Federal IRA Heat Pump Tax Credit: Claim a 30% tax credit (up to $2,000) on your federal taxes for heat pump installations.
- Local Rebates: Cities like Denver and Boulder offer additional rebates that can stack with Xcel’s offers, bringing your total savings even higher.
Final Thoughts: Ready to Upgrade?
With the new 2025 rebate updates, now is the perfect time to consider upgrading to a heat pump system. Whether you’re interested in an air source heat pump, ductless mini split, or ground source heat pump, the savings from Xcel Energy’s rebates combined with other incentives can help make this energy-efficient upgrade much more affordable.
If you need help navigating the rebate process or selecting the right system for your home, don’t hesitate to reach out to Precision Plumbing and Air. We’re here to help you maximize your savings and ensure you get the best system for your needs. Give us a call at 720-464-4352. For more information on the rebates visit: How Xcel Energy Heat Pump Rebates Work in CO (2025 Update).
