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(2025 UPDATE) Colorado Heat Pump Rebates

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With the current federal and Colorado State incentives and rebates available, now is a great time to swap your furnace (and AC) for a dual-purpose heat pump.

The Federal Inflation Reduction Act (IRA) and state and local programs encourage the adoption of energy-efficient heat pumps.

The Xcel Colorado Rebates are changing for the better in 2025! (Yeah, we know; that’s not what we normally hear.) The Xcel rebates below are updated and take effect on January 1, 2025.

The Federal IRA Tax Credit

Coloradans and all American taxpayers are currently eligible for the heat pump incentives available through the Inflation Reduction Act.

  • Any home can claim a 30% tax credit, up to $2,000, to install an air-source heat pump. You claim the tax credit with tax form 5695, the same form you would use for a solar tax credit.

Statewide Tax Incentives

As of January 1, 2024, a law was enacted that makes Energy Star-certified air-source heat pumps eligible for a $1,500 tax credit.

The Colorado Energy Office has guidelines on obtaining the tax credit. Here are a few key guidelines:

  • Must be installed by a registered contractor (Independent Power is registered!)
  • Registered contractors are required to provide customers with tax credits as a discount on installation costs.
  • Registered contractors complete and submit the necessary paperwork to the Department of Revenue for the installed equipment.
  • You don’t need to file any paperwork to receive the discount.

Utility Company Incentives

Xcel Energy, the main electrical utility in the Denver and Boulder metro areas, offers heat pump rebates if you work with a qualified contractor

Xcel 2024 Heat Pump Rebates

  • Non-Cold Climate Air Source Heat Pump (ASHP) – $300/cooling ton
  • Cold Climate ASHP – $750/heating ton

New! Xcel Energy January 1, 2025 Heat Pump Rebates

  • Non-Cold Climate Air Source Heat Pump (ASHP) – $900/cooling ton
  • Cold Climate ASHP – $2,150/heating ton

To put this into numbers, most heat pumps Independent Power has been selling are between 2.5 and 4 tons. This means the rebate amount goes from $1,875 – $3000 to $5,375 – $8,600 in rebates.

Different utility company? They probably have a rebate, too. Check DSIRE, a database for incentives in Colorado and America.

Boulder County Rebates

Boulder County offers additional rebates that can be stacked on the utility and state rebates.

  • 25% of project cost, up to $300
  • Must be installed by a registered contractor (Independent Power is registered!)

City Of Boulder Rebates

The City of Boulder offers additional rebates:

Town of Erie Rebates

The Town of Erie added additonal rebates in 2024, including heat pumps:

  • Up to $400 on cold climate heat pumps
  • Check out other rebate offers on the link above

City of Longmont, Ft. Collins, Town of Lyons (and more cities) Rebates

Head to Energy Smart to learn more about rebates available in your city or town. You can also search online with your “Town’s Name” and “Heat Pump Rebates”.

 

We Can Install Your Heat Pump System In 2025

Federal and State governments can remove programs for a variety of reasons. So, there’s never been a better time to upgrade your old HVAC system! Contact us for a free quote to get a custom design. We’ll help you understand all of the benefits available to you.

Request Your Free Quote

Read What People Have To Say About Us!

Independent Power
Excellent
Independent Power
4.8
Based on 33 reviews
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M F
M F
Highly recommended. Here are the details:When I decided to install a rooftop solar system on my Helena home, I sought references on quality companies (and ignored all the door-knockers). About a quarter of the homes in my subdivision have panels, and my neighbors named three companies. My cousin who works in the industry then mentioned Independent Power as a solid provider.I developed a list of questions and called all four. They all made it to the next phase of submitting a preliminary proposal and price. At that point I eliminated one of the Helena companies due to second-tier or lower equipment.The proposals from the remaining three companies – one in Helena, one in Missoula and Independent Power in Bozeman – were all solid. All Enphase inverters, with Tier-1 panels and good warranties. They then all took time to go through the list of follow-up questions I had developed and gave what I believe were accurate and thorough answers. All sent me spec sheets and warranty info on the equipment they proposed. All offered on-staff qualified electricians on their teams.Independent was not the cheapest in $/Watt or $/kWh, but was competitive. In the end, I chose them because they offered the highest-watt panels – their 430W Q Cells took around 15% less roof space for the same production. So some day if I need to expand, I’ll still have some room.Their on-site people seem outstanding, from the drone and attic visit to get exact measurements for design finalization, to their install team which included their master electrician who has been with IP for 16 years. I had a minor problem with the metering system on startup, which worried me since they are not a local company. They immediately dug in to it remotely, consulted Enphase, and when they could not resolve it from a distance sent the electrician back timely to work everything out.
Response from the owner: Thank you for the thoughtful and detailed 5-star review! We are grateful you chose to work with our team, as we know you have many options. Your trust in us is the reason our team works hard to earn and keep it. Please let us know if we can be of service in the future.
Mark G.
Mark G.
Excellent service and craftsmanship. Sales was patient and answered all my questions, never pushy, it always felt like a casual conversation with a friend. The install team was friendly, skilled and efficient. Overall very happy with the process and product from start to finish.
Response from the owner: Thank you for the 5-star review, Mark! I know Avery and the team enjoyed working with you. We consider ourselves lucky to be a part of the Bozeman community. Please let us know if we can be of service in the future.
Eric R.
Eric R.
Independent Power was great to work with. They always responded quickly to my questions before, during and after the installation of my rooftop solar panels. They always showed up on time and kept me up to date on the progress of getting the system approved. Sean even made a stop at my house out of his way one day when the Enphase app wasnt working correctly, and quickly fixed the problem.
Response from the owner: Thank you for the 5-star review, Eric! We know you had options on solar companies in Helena, and we are grateful you chose to work with us. Our expert team is dedicated to helping you have the best experience during your project. And Sean is the best! He always makes sure our customers are taken care of. Please let us know if we can be of service in the future.
matthew A.
matthew A.
Being new to off grid life was pretty challenging and exciting and Independent power made the experience a breeze. My experience with these guys was awesome. From beginning to end, their sales, engineers,electricians, technicians ,Installers knowledge,professionalism, craftsmanship the whole team, and their enthusiasm of dedication to solar is incredible.The project was finished by the way before the finish date !!!
Response from the owner: Thank you, Matthew, for this great review! Our team works tirelessly to provide the best service possible, and receiving your 5-star review is an honor. We are excited that you've chosen to go off-grid and that you trusted us to partner with you to make it happen. Your detailed review will help your neighbors when they decide to go solar, add battery storage, or go fully off-grid. We appreciate you and hope we can be of service in the future.
Kay D.
Kay D.
Half of the time there was good communication and cooperation. However, turning on the system was delayed by well over a month because a new hire who took over my account did not file local permits and get inspections passed in a timely manner. To their credit I was given a rebate for the lost time.
Response from the owner: Thank you for the 4-star review, Kay! We appreciate the detailed feedback. It not only helps your neighbors make an informed decision on who to choose for solar, but it also helps us improve the experience for our customers. Sorry for our error with the paperwork. We appreciate your kindness as we worked to correct our mistake. Thank you for working with us!
Rob N.
Rob N.
IPS was responsive, professional, and extremely easy to work with. Would not hesitate for a second to recommend them to anyone thinking about solar!
Response from the owner: Wow, Rob, thank you for this great review! We appreciate your trust in us for your solar installation. We hope you're enjoying your system. Please let us know if we can be of service in the future.
David D.
David D.
Great experience with Independent Power! Excellent communication throughout each phase of the project, both with the project management team and the on-site installers. Very pleased, and would recommend Independent Power to my Bozeman neighbors.
Response from the owner: Thank you, David! We appreciate you taking the time to write a 5-star review for us. We love serving our Bozeman community, and when you take a moment to give us a review, it helps your neighbors know what to expect when working with our team. Thank you again! Please let us know if we can be of service in the future.
Brian B.
Brian B.
Very professional, with prompt response to calls and email. Some slight scheduling miscommunication, but overall a very good experience. I will most likely be using this company again for another home I own. I would have given 5 stars, but when asked to give a review before the system commissioning occurred is like asking for payment prior to services rendered.
Response from the owner: Thank you for the great review, Brian! And thank you for pointing out my mistake of asking for a review too early. I will be sure to give some time in the future. We always appreciate feedback; it helps us improve your experience and the level of service we provide. We do hope we can help out in the future!
Ramona R.
Ramona R.
The cost of unit and installation was thousands less than other companies. From beginning to end, everyone involved was friendly, prompt and professional. Thanks especially to Emily who stayed in touch with me the entire project. I could not have asked for a better experience. Thank you.
Response from the owner: Wow! Thank you, Ramona, for the wonderful 5-star review! We are thrilled to hear you had a good experience with us and that Emily took great care to keep you up to date on your project. We appreciate you choosing to work with us; it means so much to our team. Please reach out in the future if we can be of service again.
Jeff D.
Jeff D.
Quick quality install and very professional group. A little wait time, mostly paperwork but system is up and running saving us $$.
Response from the owner: Thank you for the 5-star review, Jeff. We're happy to hear you're up and running with your solar and that you're satisfied with our team. As a small business, we are grateful for your review; it helps your neighbors decide who to work with when they're ready to go solar. Let us know if we can be of service in the future!
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Independent Power
4.8
Based on 261 reviews
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