Colorado Home Energy Rebates 2026: HEAR After August, the $1,000 Heat Pump Credit, Xcel, Power Ahead, and What Stacks

Colorado Home Energy Rebates 2026: HEAR After August, the $1,000 Heat Pump Credit, Xcel, Power Ahead, and What Stacks

By EnergyBS Editorial Team | November 13, 2026

The Short Answer

Short Answer: A Colorado household installing a cold-climate heat pump in late 2026 can usually count on three things: a utility rebate (Xcel Energy says its heat pump rebates average about $5,000 and reach $8,000), the Colorado Heat Pump Tax Credit of $1,000, of which the contractor must pass at least $333 to you on the invoice, and, inside the Denver region, $1,500 from Power Ahead Colorado. The state's federally funded HEAR program, worth up to $14,000 per household, closed to new single-family applications on August 1, 2026. The federal 25C and 25D credits ended for anything placed in service after December 31, 2025.

So the realistic total for a Front Range single-family heat pump is now somewhere around $6,800 to $10,500 in direct help, not the $20,000-plus that circulated in 2025. The rest of this page shows where each dollar comes from, what has ended, and two worked examples.

Every program figure here was read from the Colorado Energy Office, Power Ahead Colorado or the source named beside it on November 13, 2026. Utility amounts that we could only confirm through a news report are marked that way.

What Changed in Colorado This Year

Three changes stacked up in 2026, and any quote written before them may overstate your help.

The state credit stepped down on January 1. The Colorado Heat Pump Tax Credit paid $1,500 for an air-source heat pump in 2024 and 2025. For installs on or after January 1, 2026 it pays $1,000. Ground-source fell from $3,000 to $2,000 and heat pump water heaters from $500 to $250. The Colorado Energy Office says the amounts drop again in tax year 2029 and that it reviews the split between contractor and customer every year.

The federal credits ended. Section 25C (30% of a heat pump's cost, up to $2,000) and 25D (30% of solar, battery and geothermal cost) do not apply to property placed in service after December 31, 2025. A ground-source system that would have earned 25D in 2025 earns nothing federal in 2026.

HEAR closed for single-family homes. Colorado launched single-family HEAR statewide on November 13, 2025. The CEO's FAQ now says applications were accepted through August 1, 2026, that the program "closed for Region 1 and 2" on that date, and that rebates are no longer available except for existing contractor reservations. A contractor with a reservation has 120 days to buy and install the work.

A fourth, federal change narrows HEAR even where it is still open. DOE Program Notice 26-2, effective May 29, 2026, limits HEAR heat pump rebates to upgrades from existing electric equipment and to new construction. The CEO's FAQ does not mention the notice. If you hold a reservation for replacing a gas or propane furnace, ask the contractor and the Colorado Energy Office whether it is still honored as written. Our heat pump rebates by state guide explains the notice.

The Colorado Heat Pump Tax Credit, Line by Line

This credit works differently from most. You do not claim it on your return. The registered contractor claims it from the Department of Revenue and must pass part of it to you as a discount, printed on the invoice as the "State of Colorado Heat Pump Discount." The contractor may keep up to two-thirds.

Three details matter in practice.

• The minimum is a floor, not the norm. A contractor can pass more than a third. When two quotes are close, ask each how much of the credit it is passing through. On an air-source job the spread is $333 to $1,000.
• Registration is the gate. Only contractors registered with the Colorado Energy Office can claim the credit, registered contractors must complete quarterly training from April 2026, and the CEO lists December 31, 2026 as the last date to register to claim credits for 2026 installs.
• Multifamily is per unit. A contractor may claim one credit per unit served. The CEO's own example is one 2026 air-source system serving a triplex, which qualifies for $3,000 before the discount.

HEAR and HER: What Colorado Launched and What Is Left

The Colorado Energy Office runs both federal Home Energy Rebate programs. Our Colorado HEAR + HER program entry covers the full application sequence; this section is about what you can still count on.

The CEO's FAQ does not print per-measure HEAR amounts. The federal statute sets the ceilings any state program works under:

Low-income households (below 80% of county AMI) can receive up to 100% of the cost, and moderate-income households (80% to 150%) up to 50%, within those ceilings. Colorado measures income as Adjusted Gross Income against the county's AMI, so the same household can be low-income in one county and moderate-income in the next. The HEEHR income limits guide works through that test.

NASEO's launch tracker, updated September 30, 2026, lists Colorado's HEAR as launched in October 2024 and does not list a Colorado HOMES launch, which matches the CEO's statement that HER is still to come.

Utility, Regional and Local Rebates: The Table

With HEAR closed for houses, this is the table that decides most Colorado projects. Utility programs set their own amounts and change them often, so the right column tells you how firm each figure is.

Xcel's scale explains why it leads the table. According to The Colorado Sun, Xcel issued 10,640 heat pump rebates worth $57 million in 2025 and planned to keep those levels in 2026. Its average of about $5,000 per installation is a mix of system sizes and income tiers, not a promise for your home. In July 2026, Power Ahead's program manager told Colorado Public Radio the Xcel program "typically provides between $6,000 to $10,000" per installation and that it expires this year but may be extended. That timing matters more than the exact figure: if you are close to signing, ask Xcel or the contractor whether the amount on your quote is guaranteed for an install completed after December 31, 2026, and get the answer in writing.

Denver. Denver has run its own Climate Action Rebates for heat pumps in past years. We could not confirm a current residential amount or whether new applications are open, so this page does not count Denver money. Check Denver's rebates and grants page before your contractor prices the job, and ask whether the city rebate can be combined with Power Ahead, which says it may be combined with utility or local government rebates.

Install Now or Wait? A Timing Table

Several Colorado deadlines land at the turn of the year, so the date the system is installed can move the net price by thousands of dollars.

Two rules keep this from going wrong. First, every program on this page that requires pre-approval (Power Ahead, HEAR reservations, many utility programs) needs it before the work starts, so rushing an install to beat a date can cost more than it saves if the paperwork is skipped. Second, "installed" means placed in service, not ordered or paid for. A deposit in December on a system installed in January is a January install for every program that uses the install date.

Stacking Table: What Combines in Colorado

Two general rules from the state energy rebate stacking guide apply: the same dollar of cost cannot be reimbursed twice, and many programs require their paperwork to be filed before any work starts. Power Ahead says that plainly: the approved contractor submits the project for review before work begins.

Worked Example 1: Front Range Gas Home

A 2,000-square-foot single-family house in Lakewood (Jefferson County, a DRCOG member) heats with a 20-year-old gas furnace and has a central air conditioner near the end of its life. Xcel supplies electricity and gas. Household income is above 150% of county AMI, so HEAR would not apply even if it were open.

The installer's price is $25,000 for a ducted cold-climate heat pump, which matches the average one Colorado installer gave The Colorado Sun for a 2,000-square-foot home. We use $5,000 for Xcel because that is the average Xcel reported; your quote should show the exact figure.

The direct help comes to $6,833 to $7,500, about 27% to 30% of the price. The same installer told The Colorado Sun that customers typically see about $10,000 in rebates and incentives; the gap is mostly Xcel's amount for the specific equipment, so this example is deliberately conservative.

What to do with the result. A furnace plus new central AC is the real alternative here, and gas is cheap in Colorado: EIA's October 2026 outlook puts average winter spending for gas-heated households at about $640, against about $1,196 for electrically heated ones. Those are national averages across different homes, not this house, but they mean the case for the heat pump rests on replacing the air conditioner at the same time and on the rebates, not on large fuel savings. The heat pump vs gas furnace true cost comparison runs that decision in full.

Worked Example 2: Mountain Propane Home, Income-Qualified

A 1,600-square-foot house near Glenwood Springs heats with propane. Holy Cross Energy supplies electricity, and the household qualifies for Holy Cross's income-qualified rebate. Its income is below 80% of Garfield County AMI, but it did not get a HEAR reservation before August 1.

The installer's price is $22,000 for a cold-climate ducted system sized for the altitude and design temperature, with the propane furnace removed.

Now the counterfactual, to show what the August closure cost this household. Had it secured a HEAR reservation in time, a low-income household could receive up to 100% of cost within the federal ceilings: up to $8,000 for the heat pump, which the CEO says can be combined with the state credit when the contractor is registered with both programs. That would have cut the net to about $6,667. Since Program Notice 26-2, though, a propane-to-heat-pump swap no longer fits the federal HEAR heat pump rule, so even a household on a future waitlist should not count on it.

Propane homes have more to gain than gas homes. EIA's October 2026 outlook puts average winter spending for propane-heated households at about $1,246, close to double the roughly $640 for gas-heated ones, so the running-cost case is far stronger here than in Example 1. At mountain altitudes and design temperatures, the heat pump's cold-weather capacity matters more than the rebate; check the model against the cold climate heat pump performance data before you sign.

Income-qualified households in this position should also apply to the Colorado Weatherization Assistance Program, which delivered the first phase of HEAR and funds insulation and air sealing at no cost to eligible households. Our Weatherization Assistance Program entry and LIHEAP entry explain how those federal programs work.

Income-Qualified Help in Colorado, in One Place

Edge Cases Worth Checking Before You Sign

• Dual-fuel systems. Keeping the gas furnace as backup changes which rebates apply. Ask Xcel and the contractor whether a dual-fuel system qualifies for the amount on your quote, and remember that the state credit is per heat pump installed.
• Ductless heads. Partial systems often earn less from utilities than whole-home systems. Get the sizing worksheet and confirm the program category before work starts.
• Renters. HEAR allowed renters with landlord permission and based eligibility on the tenant's income. Utility programs usually pay the account holder or the owner; ask who signs.
• Unregistered contractors. No CEO registration means no state credit discount. No approved Power Ahead contractor means no $1,500. Check both lists before getting quotes.
• Scams. No state program sells door to door. See how to avoid heat pump installation scams and compare bids with the heat pump quote comparison worksheet.
• Solar. With 25D gone, a 2026 solar system in Colorado earns no federal credit. Check your utility's solar and battery programs directly; our solar cost by state page has installed prices.

Frequently Asked Questions

Is the Colorado HEAR rebate still available?

Not for new single-family applications. The Colorado Energy Office says single-family HEAR closed for Regions 1 and 2 on August 1, 2026 and rebates are now available only for existing contractor reservations. Multifamily HEAR and the HER whole-home program are listed for 2026.

How much is the Colorado heat pump tax credit in 2026?

$1,000 for an air-source heat pump, $2,000 for ground-, water- or combined-source, and $250 for a heat pump water heater, for installs on or after January 1, 2026. The registered contractor claims it and must give you at least $333, $667 or $83 as an invoice discount.

Do I file anything to get the state heat pump credit?

No. The Colorado Energy Office says customers do not need to file paperwork. Look for the "State of Colorado Heat Pump Discount" line on the invoice.

How much does Xcel pay for a heat pump in Colorado?

Xcel told The Colorado Sun in early 2026 that its rebates average about $5,000 per installation and can reach $8,000, and DRCOG's program manager told Colorado Public Radio in July 2026 that they typically run $6,000 to $10,000. He also said the program expires this year but may be extended. The amount depends on the equipment and your tier, so ask for the exact figure on the quote.

What is Power Ahead Colorado?

A Denver Regional Council of Governments program funded by a $200 million federal grant. It pays $1,500 toward a cold-climate air-source heat pump in an existing building in a DRCOG-participating city or county, through an approved contractor who submits before work begins.

Can I still claim the federal heat pump tax credit?

Not for a 2026 install. Section 25C ended for property placed in service after December 31, 2025. A heat pump installed in 2025 is still claimed on the 2025 return with Form 5695; see the 25C vs 25D guide.

Can HEAR be combined with the state credit?

Yes. The CEO says HEAR or HER can be combined with the Colorado Heat Pump Tax Credit when the contractor is registered with both programs, but not with another federal grant or rebate for the same upgrade.

Related Reading

• Home energy rebates by province and state, 2026
• Colorado Home Energy Rebate Program (HEAR + HER)
• HEEHRA home electrification rebates
• HOMES rebate program
• Weatherization Assistance Program
• Heat Pump Rebates by State 2026
• HEEHR Income Limits 2026
• State Energy Rebate Stacking Guide
• Winter Heating Costs 2026-27 by Fuel