Heat pumps heat and cool your home from one efficient system, and 2026 is one of the best years yet to install one in Colorado thanks to rebates that stack. Here is a plain-English look at what is available.
Xcel Energy rebates
Xcel offers tiered rebates on qualifying cold-climate heat pumps, currently up to $2,800 per system depending on the equipment efficiency and configuration. Ductless mini-split systems and whole-home ducted systems both qualify at different levels.
Federal tax credit
The federal Inflation Reduction Act provides a 30% tax credit on qualifying heat pump equipment and installation labor, capped at $2,000 per year. This is a credit against your federal taxes, separate from the Xcel rebate, so the two stack.
Income-qualified programs
Households that meet income guidelines may also qualify for the HOMES and HEEHRA rebate programs, which can cover a substantial share of the project cost on top of the credits above. Eligibility and amounts depend on household income relative to the area median.
What it means for your net cost
A whole-home ducted cold-climate heat pump typically runs $14,000 to $22,000 installed before incentives. After the Xcel rebate and federal credit, many homeowners net out closer to $10,000 to $17,000, and income-qualified households can land lower still. A single-zone ductless mini-split starts around $5,500 installed before incentives.
How to actually claim them
The paperwork is the part most people dread. A good installer confirms what you qualify for before any equipment is ordered and files the rebate paperwork as part of the job. See our heat pump installation service or call (303) 699-1417 and we will run the numbers for your specific home.