You’re busy enough, and figuring out how to get all the available heat pump incentives and rebates in Colorado can be pretty confusing. There can be a lot of steps involved with qualifying and getting the Xcel rebates, but fear not!
In this article, we want to help by practically and simply explaining how the Colorado Xcel heat pump rebates work, and most importantly, how to get them.
The rebates have recently changed (in an exciting way!), and the rebates listed below are updated and took effect on January 1, 2025.
What Xcel Rebates Are Available In Colorado?
If you’re an Xcel customer, there are rebates for air source heat pumps (ASHP), ground source heat pumps (GSHP), and the popular ductless mini split heat pump systems (MSHP).
Xcel has recently shifted from flat rate amounts to an amount per ton of cooling or heating load depending on the equipment you install.
Starting from January 1, 2025, these rebate amounts are now tripled from 2024.
Read below to check out details on each! And here is a great summary sheet that Xcel has outlining what’s available:

Here is Xcel’s official Colorado heat pump rebate page as well for reference.
Air Source Heat Pump Rebates
Air source heat pumps are built and look much like your regular air conditioning system, except the heat pump both heats and cools. These are usually ducted systems. And when we replace your old air conditioning systems and gas-fired furnaces and boilers, we reuse your existing ductwork.
ASHP Rebate for Non-Cold Climate ASHP: $900 per cooling ton at 95 degrees Fahrenheit
ASHP Rebate for Cold Climate ASHP: $2,250 per heating ton at 5 degrees Fahrenheit
This is the same whether you do a ducted (with ductwork) heat pump, or a ductless/mini split system (no ductwork). Are you confused yet? It’s not very straightforward, but I’ll try to explain.
Cold Climate Heat Pump Rebate Example
We spoke with our Trade Relations Manager at Xcel, Salene Chaves, to confirm how exactly the new heat pump rebates are calculated and here’s what she told us:
The exact formula is: Capacity / 12,000 * $ Rebate, round to the nearest $5
For our example, let’s assume you’re going for a new very efficient cold climate heat pump unit, like the Bosch IDS line (one of our favorites).
If you pull up the part number of the packaged unit on the NEEP Cold Climate Heat Pump List, you’ll see a chart showing the BTU output at different modes (heating and cooling) and what BTU output rating the unit can do at these different modes and temperatures (outdoor temps).
In this case, for the this 5 ton Bosch IDS Premium heat pump specific part number, it shows a rating for 37,800 BTU’s in heating mode when it’s 5 degrees outside. The NEEP listing also shows that it meets the 70% capacity maintenance at 5 degrees Fahrenheit as well.
Xcel is giving $2,250 per heating ton. And a ton equals 12,000 BTU’s. So if you do the math it’s 37,800 BTU’s divided by 12,000 = 3.15 tons at 5 degrees which equals $7,087.50. Rounded to the nearest $5 (we hope up in this case), that’s $7,090.00 as the final rebate.

For another quick example: Their IDS Ultra line shows 55,000 heating BTU’s at 5 degrees out. That’s 55,000 / 12,000 BTU’s = 4.583 * $2,250 per ton = $10,311.75 rebate from Xcel alone. Which is really incredible if you home indeed needs a 5 ton system. Many homes can do with less.
Not only that, you can get a 25% rebate bonus if you do three total efficiency upgrades within a two year time period through Xcel’s Whole Home Efficiency program.
For heat pumps, this adds another $562.50 per heating ton at 5F to your rebate amounts if you do the WHE program, which is really incredible.
This means that if you go through the WHE program, you get $2,812.50 per heating ton for a cold climate heat pump. For most homes, this realistically means somewhere in the range of $6,000 to $11,000+ just to help with this new heat pump equipment upgrade.
As as sidenote – heat pump water heaters also have a rebate now of $2,250 in total. With the WHE program 25% rebate bonus, you’d get $2,812.50 in total to help with that upgrade as well.
These things can get confusing, so feel free to reach out to us if you have further questions. We are a n approved energy audit and heat pump contractor with Xcel’s rebate programs, so we can hopefully have answer for you!
We don’t only install Bosch, but they are good for an example. There are a ton (no pun intended) of good brands to use out there, and we like to remain agnostic so that you can put in the best equipment for your specific home.
This is just one example, and there are literally thousands of part numbers and configurations of heat pumps on the NEEP list. And yes, it’s confusing and not straightforward.
The non-cold climate rebate would work similarly, except that is much lower ($900 per cooling ton instead) and is based on cooling load, not heating load.
You can get a minimum of $900 per cooling ton at 95 degrees if the air source heat pump system meets minimum efficiency specifications. Per Xcel’s own website, these requirements are:
Heat Pump (Non-Cold Climate) Efficiency Minimums:
15.2 SEER2, 11.7 EER2, 7.8 HSPF2, AHRI Database Verification
These efficiency minimums for the cold climate bonus rebate of $2,250 per heating ton at 5 degrees:
Cold Climate Heat Pump Efficiency Minimums For Ducted of Partially Ducted:
15.2 SEER2, 10 EER2, 8.1 HSPR2, 1.75 COP, Capacity Maintenance of 70%, based on capacity at 5 degrees Fahrenheit compared to 47 degrees Fahrenheit, and it must be verified on the NEEP database.
Cold Climate Heat Pump Efficiency Minimums For Non-Ducted or Ductless:
16 SEER2, 9 EER2, 9.5 HSPF, 1.75 COP for 5 degrees Fahrenheit (Coefficient of Performance), Capacity Maintenance of 70%, based on capacity at 5 degrees Fahrenheit compared to 47 degrees Fahrenheit, and it must be verified on the NEEP database.

Benefits of Cold Climate Heat Pumps
In layman’s terms, this means that if you install a slightly higher efficiency unit, you can not only get the higher rebate tier, but possibly eliminate your natural gas heating completely, and stay comfortable through the frigid cold spells we get from time to time in the front range.
As a sidenote – we pretty much only install cold climate heat pumps for our customers. The rebate helps offset the incredible cost increase, and allows us to heat and cool your home more efficiently, along with the above-mentioned benefits.
How Do You Get Air Source Heat Pump Rebates?
This is another critical piece of info in order to qualify. For the ASHP specifically, you must use an Xcel Participating Contractor. These contractors have been vetted and approved by Xcel specifically to be able to install heat pump systems.
If you don’t go through this specific approved contractor list, you cannot get this rebate (we’re on the list as well).
This is because companies like ours have to go through specific heat pump testing, attend Xcel seminars, and meet a list of requirements to be able to not only offer heat pump rebates, but to make sure the heat pump install is of the highest qualify for correct design and long-term reliability.
Your contractor will handle the rebate process. This is due to the specific design and rebate process requirements.
As another sidenote – if you’re having issues with your current heat pump installer or if you hit a snag with processing your own heat pump rebates, feel free to reach out to us for help.
Ductless Mini Split Heat Pump Rebates
How Ductless Mini Splits Work
Mini splits use pretty much the same exact technology as the air source heat pumps mentioned above.
But mini splits (also known as ductless mini splits) specifically do not use ducts, and you’ll most easily recognize them as the inside wall-mount units. They also now have ceiling mount and floor mount units (or air handlers).
The power and refrigerant runs directly to these inside units without ductwork, which heat and cool the air in that room directly. This is also the most efficient way to heat and cool a space, due to no heat loss through (leaky) ducts.
Whether we would install a ductless or ducted system totally depends on your own home’s characteristics combined with your goals. Contact us to get a quote or if you’d like to chat through heat pump options.

How Do You Get Mini Split Heat Pump Rebates?
The great news with mini split rebates is that you can use any HVAC contractor, not just the ones listed on the official Xcel participating contractors list.
This then shifts the focus on 1) the correct equipment in order to qualify and 2) a correct install, paperwork, and rebate process itself.
You can see a preview of this heat pump rebate application itself to get an idea of what you need to have ready. In addition to basic home and installer information, you’ll need things like:
- Installation date
- Manufacturer and model numbers
- SEER2, EER2, HSPF2, and other technical information to prove its efficiency
- Number of indoor units
- Verification of cold climate technical specs (if applicable)
- Heating and cooling BTU’s
- Any back up heat source info
- *You might need Manual J design specs, invoices, and other information in order for Xcel to verify the installation.
This can be a lot, but feel free again to reach out if you need help with either installation, design, or rebate processing.
Ground Source Heat Pump Rebates
GSHP systems are the least popular currently, and often the most expensive type of heat pump HVAC system. However, they are indeed the most energy efficient.
This is because they use the stable temperature of the earth below the surface level on your property. You run a continuous loop of liquid refrigerant or mixture through these pipes which have contact with the earth, and you can very efficiently regular heating and cooling with this method.
But with this, it’s also the most expensive and is the most involved install process.
Xcel currently offers $3,300 per heating ton on ground source heat pumps. This is triple their old ground source rebate levels, so this is great!
The efficiency minimums for ground source heat pumps are: 16 EER2, 3.3 COP
You also must use an Xcel approved contractor for this type of rebate with ground source heat pumps.
When Will I get My Xcel Energy Rebate?
The short answer is you’ll get it 1) after the installation of the heat pump system and 2) after 6-8 weeks currently. That’s about the timeframe that we see rebate checks from Xcel right now.
Your HVAC contractor may decide or be able to discount it on the invoice up front, but that’s really up to them and the agreement between you both.
Contractors effectively take a risk by fronting rebates for customers, but many do it in order to make the project more affordable and equitable for you.
Can You Get Xcel Heat Pump Rebates For Rental And Investment Properties?
Short answer: Yes! Rental and investment property qualifies. Just follow the same process and procedure above to make sure you do everything correctly.
What Other Rebates or Incentives Are Available For Heat Pumps?
The Xcel heat pump rebate might only be one of two or three total available rebates out there. Here are just a few others that we help customers get as well:
Colorado State Shared Tax Credit – This is a total of $1,500 shared between the heat pump installer and the customer. The minimum to the customer is $499.95 discounted on the invoice itself.
Federal IRA Heat Pump Tax Credit – This can be taken yearly and includes a 30% tax credit up to $2,000 on your Federal taxes for heat pumps. It’s great because it resets yearly so you can use it again if you move.
Your specific city, county, or even neighborhood might have even more incentives. For example, Denver offers another $3,500 heat pump rebate.
And Boulder has even more (click here).
These rebates and tax credits can stack on top of each other, often adding up to thousands of dollars and a big discount of the heat pump installation cost.
This again can get pretty confusing, but we work to 1) make sure the equipment is efficient and eligible and 2) make sure to follow all the rules and incentive instructions in order to maximize everything being offered.
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 to demystify at least some of how Xcel heat pump rebates work!
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