A new heat pump to replace your older furnace, boiler, or electric resistance heater is the latest tech to cut your carbon footprint, get off of natural and boost your energy efficiency in one go (with the right design and installation).
We live in exciting times, because the push for decarbonization and inversely, electrification, makes Boulder, CO one of the best markets in the country in terms of heat pump incentives.
Now in 2025 and more than ever before, Boulder homeowners can take advantage of substantial rebates and tax incentives to help bring down the cost of a new heat pump.
This includes many different entities, ranging from Federal all the way down to State, County, City, and local utilities.
Below, we explain how Boulder’s heat pump rebates work to make sure you get all the savings you’re qualified for, how to make sure to get them, and more.
There are a few different categories of heat pump rebates, so I want to mention that we’re mainly talking about air-to-air cold climate heat pumps for this article and for homeowners largely within the city and county of Boulder itself. Stay tuned for future ones on the other types. Let’s dive in!
Who is Providing Heat Pump Incentives in Boulder?
To give some resources and references to start off, there’s a good list of entities all providing heat pump incentives if you live in Boulder. Perhaps the best news of all – you can stack these rebates on top of each other, receiving the benefits of many or all for the same installation.
You can check out each one separately by clicking the link –
- Federal Tax Credit 25C – Up to $2,000 per year for heat pumps
- Colorado State Heat Pump Tax Credits – up to $1,500 for a cold climate heat pump
- Boulder County – up to $400 for a cold climate heat pump or
- Boulder County Income-Qualified – up to 70% of the program costs up to $4,000 per year.
- City of Boulder – up to $900 for a cold climate heat pump
- Xcel Energy – up to almost $10,000 for a cold climate heat pump (depending on specific calculations)
Yes, you read that right. There are incredible incentives out there to cut the gas line and to go electric, and you can work towards collecting them all! These numbers are even higher for income-qualified homeowners as well.
*Caveat: You must install a very efficient (known as cold-climate rated) heat pump in order to maximize all of these incentives.
Many of the rebate programs are very strict on the equipment you install, which will ensure you gain all the benefits from heat pumps, even down to those frigid nights, where the temperature can creep below zero. I’ll expand on the requirements below, including giving some details on each program.
Some Heat Pump Advice From a Heat Pump Installer
Before we start with the incentives, I wanted to quickly add just a few thoughts as a heat pump installer ourselves, who are in this on a daily basis, and who are also listed as approved heat pump contractors in these local rebate programs. The comment is not to gloat, but instead to offer a word of caution –
There are thousands of heat pump units (equipment) out there, and the rebate requirements are incredibly strict in terms of which ones qualify for rebates. Unfortunately, many on the shelves and being offered still do not qualify.
The requirements additionally flow into everything else, including by not limited to correct design, sizing, correct (professional) installation, licenses, and everything else.
Perhaps the most strict program is Xcel Energy’s. They audit us on a random/round robin basis, and their installation requirements and equipment specifications are incredibly strict in order to stay in as an approved contractor.
There’s much more, but I would just offer to make sure you find a contractor who is an expert in, comfortable with, and a proponent of cold climate heat pumps in the Front Range area.
This will avoid a lot of heartache, broken promises, high energy bills, and uncomfortable homes into the future, and is really what my comments are trying to convey in the end.
I hope that all makes sense. OK, now on to the rebates!
Boulder County Heat Pump Rebates
This rebate is available to all Boulder County residents. Here’s a look at the rebates for different types of heat pumps in the City of Boulder, CO:
| Project Type | Rebate Replacing Gas Appliances | Rebate Replacing Electric Appliances | Requirements |
|---|---|---|---|
| Cold Climate Air Source Heat Pump Including Mini-Split Heat Pumps | $400 | $300 | • HSPF2 ≥ 8.1 • Must be ENERGY STAR Cold Climate certified OR COP ≥ 1.75@5°F OR capacity @ 5°F at least 70% of BTU @ 47°F |
| Non-Cold Climate Air Source Heat Pump Including Mini-Split Heat Pumps | $200 | $100 | HSPF2 ≥ 7.8 |
| Ground Source Heat Pump | $400 | $300 | • 5.5 tons or smaller, 14.1 EER • Must be ENERGY STAR certified |
| Air to Water Heat Pump | $400 | $300 | Must have a COP of 1.75 or higher |
| Heat Pump Water Heater | $200 | $100 | Must be ENERGY STAR certified with a minimum Energy Factor of 2.0 |
This table can be found on Boulder’s EnergySmart website, which outlines the program, FAQ, and how to apply as well.
You can see the list of the technical requirements of the equipment that the heat pump equipment has to exceed in order to qualify for the rebates. The different incentives programs all may or may not have different requirements of the equipment, so you have to be really careful.
For instance, we have a process internally that checks every single rebate down the list for for every single project as we start a heat pump installation for our customers. It takes a long time, but it’s totally worth it.
Be sure to check out EnergySmart’s Heat Pump Rebate FAQ for details as well.
You apply for this rebate after the project is complete. Be sure to scan through all the steps on EnergySmart’s Rebate Application page to see what will be needed by your approved heat pump contractor as well.
Boulder County – Income Qualified Heat Pump Rebates
Funded by the County’s Sustainability Tax, Boulder County offers even higher rebates. Specifically they offer 70% of project costs for energy efficiency or home electrification upgrades up to $4,000 per year.
To qualify for this higher incentive, your household must make at or below the Area Medium Income (AMI) listed here (the 100% number or less):
| Household Size | 80% AMI* | 100% AMI |
|---|---|---|
| 1 | $81,760 | $102,200 |
| 2 | $93,440 | $116,800 |
| 3 | $105,120 | $131,400 |
| 4 | $116,800 | $146,000 |
| 5 | $126,160 | $157,700 |
| 6 | $135,520 | $169,400 |
| 7 | 144,880 | $181,100 |
| 8 | $154,240 | $192,800 |
Per their website, if you’re below the 80% figure, you may be eligible for even more financial assistance for your home upgrades.
To meet this eligibility for the higher AMI-based rebates, you must pre-qualify by submitting this form here before anything gets installed.
Also, things change all the time in this crazy heat pump world, so please be sure to review their entire site for any instructions or requirements that might change.
City of Boulder Heat Pump Rebates
The City of Boulder are separate and stackable heat pump rebates offered to homeowners who live within the City itself. Rebates are available on a first-come first-serve basis, and their website confirms that they can be combined with any other eligible municipality or utility incentive.
Like the County’s rebates, here are (even bigger) rebates if you live within the City of Boulder, which is funded by the city’s Climate Action Plan (CAP) Tax:
| Project Type | Rebate Replacing Gas Appliances | Rebate Replacing Electric Appliances | Requirements |
|---|---|---|---|
| Cold Climate Air Source Heat Pump Including Mini-Split Heat Pumps | $900 | $400 | • HSPF2 ≥ 8.1 • Must be ENERGY STAR Cold Climate certified OR COP ≥ 1.75@5°F OR capacity @ 5°F at least 70% of BTU @ 47°F |
| Non-Cold Climate Air Source Heat Pump Including Mini-Split Heat Pumps | $750 | $250 | HSPF2 ≥ 7.8 |
| Ground Source Heat Pump | $900 | $400 | • 5.5 tons or smaller, 14.1 EER • Must be ENERGY STAR certified |
| Air to Water Heat Pump | $900 | $400 | Must have a COP of 1.75 or higher |
| Heat Pump Water Heater | $750 | $250 | Must be ENERGY STAR certified with a minimum Energy Factor of 2.0 |
Again, be sure to read through their entire City of Boulder Rebates page (towards the bottom) for clarification on the current conditions you must meet.
This is their FAQ here, and their application page here.
If you’re income qualified, please refer back up to that section, as it’s the same program for both the City and County of Boulder.
Federal, State, and Xcel Energy’s Heat Pump Rebates
To prevent this article from getting too long, I’ll quickly outline the other stackable incentives you can get if all rebate requirements are followed for these cold climate heat pump installations.
Be sure to check out each one of them individually, as we’ve written more extensive articles on them as well.
Federal Heat Pump Tax Credit
Through this tax credit known as the 25C, you can take up to $2,000 per year through 2032 on eligible cold heat pump installations on your federal taxes.
This includes both heat pump HVAC systems and heat pump water heaters as well, since they are the same technology and bundled in there together.
Check out our in-depth article here for more information on this one.
I like to mention also – if you’re looking to replace both your gas water heaters and gas-firing heating equipment with heat pumps, perhaps it could make sense to split them in different years, so that you can maximize for the $2,000 for each installation. Sometimes this makes sense for homeowners, so I wanted to mention it.
State of Colorado Heat Pump Tax Credit
This is another great one where you can receive up to $1,500 for an eligible cold climate heat pump installation if all requirements are met.
This is provided to you by a registered/approved heat pump contractor within the State program, and it’s an up-front discount listed on your invoice for the install.
Please see our in-depth article here on details for this one!
Xcel Energy’s (New for 2025) Amazing Heat Pump Rebate
In short – Xcel Energy just tripled their rebates for 2025 for cold climate heat pumps! It’s part of their new Clean Heat Plan, where over $300M is being injected into their goal of electrifying 200,000 homes throughout Colorado in the next few years.
Here is what their rebates were just increased to:
As of January 1, 2025:
- Non-Cold Climate ASHP – $900 / cooling ton
- Cold Climate ASHP – $2,150 / heating ton
- Ground Source Heat Pump – $3,300 / heating ton
- HeatPumpWaterHeater – $2,250
Xcel Energy’s rebate calculations can not only be confusing, but are the most strict of anyone’s with their new program rollout recently. This includes design documentation, correct installation, equipment requirements, duct sealing, and much more. If not done absolutely to their program, you may not get this rebate.
Check out our in-depth article here for how these rebates work, the requirements, and some examples as well.
Wrapping it Up
This again can get pretty confusing, but with a little bit of research you can become empowered with all the steps and requirements needed to take advantage of these incredible rebates in not only the City and County of Boulder, but the others too.
If you’re looking into heat pumps, need help with rebates, or just have some general questions about heat pumps, please contact us here.
Thank you for your time and I hope this article helped. We will continually update these as the rebate programs change to keep you informed. Stay tuned!
