Rebates and Incentives
Heat pump incentives in Colorado changed a lot in 2025 and 2026. Some programs closed, one federal credit ended, and others changed their terms. This Colorado heat pump rebate guide explains which programs Parker homeowners can still look into, what each one is, and why you should confirm eligibility with the program before you buy. If your current system needs a repair first, call and we connect you with a local contractor.
Call (303) 647‑3227 →Heat pump incentives come from three places: your utility, the State of Colorado and the federal government. Each sets its own rules, budgets and deadlines, and each can change them during the year. A program a neighbor used last winter may be closed now, and a program you read about online may never have opened in your area.
This page does not list amounts. They change too often, and the right figure depends on your equipment, your home and sometimes your income. Use it to learn which programs exist and their status as of the date at the bottom, then check the details with each program directly.
Many incentives can be combined, but not all of them, and some reduce what another will pay. The order you apply in and the paperwork your installer files can matter. Ask each program how it treats other incentives before you count on a total.
Almost every incentive below is for installing qualifying new equipment. A repair to an existing heat pump, such as a new capacitor, fan motor or refrigerant leak fix, does not usually qualify. That matters if you are deciding whether to fix your system or replace it. Our repair or replacement guide covers the other factors.
Most Parker homes get electricity from Xcel Energy. Xcel offers rebates on qualifying heat pumps installed in Colorado homes, including cold climate air-source models and heat pump water heaters. Rebates generally require a qualifying system and an installer who takes part in the program.
✓
Status: active as of November 2026.
✓
Terms have changed more than once. Xcel ended some bonus rebates in late 2025 for homes switching from existing electric heat, and rebate levels have been adjusted during 2026.
✓
Equipment must meet the program's efficiency requirements, and paperwork deadlines apply.
✓
Program budgets are set for each year, so timing can affect when a rebate is paid. Ask Xcel or your installer how the current year is running.
If CORE Electric Cooperative serves your home instead, ask CORE directly about any heat pump programs it runs, since Xcel programs only apply to Xcel customers.
Colorado has a state tax credit for installing qualifying heat pumps, run by the Colorado Energy Office with the Colorado Department of Revenue. You do not claim this one yourself. A contractor registered with the state claims it and must pass part of its value on to you as a reduction in your price, listed as its own state line on the invoice.
✓
Status: active for qualifying installations in 2026.
✓
The credit amount stepped down at the start of 2026, and the state has said it will decrease again in a later tax year.
✓
It applies only when the installing contractor is on the state's registered list, and the equipment must meet the program's requirements.
The federal Inflation Reduction Act funded two state-run rebate programs. Colorado runs them as the Colorado Home Energy Rebate Program, through the Colorado Energy Office.
The Home Electrification and Appliance Rebates program supported heat pumps and other electric upgrades for low- and moderate-income households. The Colorado Energy Office accepted single-family applications from November 13, 2025 to August 1, 2026. Status: closed. Douglas County was part of the program's Front Range region.
Home Efficiency Rebates, Colorado's version of the federal HOMES program, will cover whole-home efficiency work for manufactured and mobile homes and large multifamily buildings. HEAR for small multifamily buildings is also planned. Status: coming soon, not yet open as of the date below. These programs have income and building-type rules, so check them before planning around a rebate.
The federal Energy Efficient Home Improvement Credit, often called 25C, used to cover qualifying air-source heat pumps. A 2025 federal law ended it early. The IRS states that the credit is not allowed for property placed in service after December 31, 2025. The Residential Clean Energy Credit, 25D, which covered geothermal heat pumps, also ended for expenditures made after that date.
✓
Status: ended for heat pumps installed in 2026 or later.
✓
If your system was placed in service by the end of 2025, a tax professional can tell you whether you can still claim it for that year.
1.
Go to each program's own website or call it, and confirm it is open and that your home qualifies.
2.
Ask the installing contractor whether they take part in the Xcel program and are registered for the state tax credit.
3.
Confirm the exact equipment model qualifies before you sign.
4.
Keep the invoice, model numbers and any rebate paperwork, and note each deadline.
Incentive status in Parker can change after this page was written. Treat it as a starting point, not a promise that any program will pay. If a contractor or salesperson tells you a program will cover your project, ask which program it is and check that program yourself before you sign anything.
✓
Xcel Energy Colorado residential heat pump and heating equipment rebates
✓
Colorado Energy Office: Colorado Heat Pump Tax Credits
✓
Colorado Energy Office: Colorado Home Energy Rebate Program (HEAR and HER)
✓
Internal Revenue Service: FAQs on the modification of sections 25C and 25D under Public Law 119-21
✓
Checked November 2026
Next Step
One call connects you with an independent local contractor who works on heat pumps in Parker and nearby towns.
Call (303) 647‑3227Related Pages
FAQ
Yes, some incentives remain. Xcel Energy offers heat pump rebates to its Colorado customers, and the state heat pump tax credit applies to qualifying 2026 installs through registered contractors. The state HEAR program for single-family homes has closed. Confirm each with the program before you buy.
No, not for new installs. The IRS says the 25C credit is not allowed for property placed in service after December 31, 2025. Systems placed in service by then may still be claimed for that tax year, so ask a tax professional.
A contractor registered with the Colorado Energy Office claims the credit from the state and must pass part of its value on to you as a separate reduction on your invoice. You do not file for it yourself. Ask whether your installer is registered before you sign.
Generally no. Utility rebates and state incentives are for installing qualifying new equipment. A repair to your current system usually does not qualify, which is one factor when weighing repair against replacement.
Not for a single-family home. The Colorado Energy Office closed single-family HEAR applications on August 1, 2026. Programs for manufactured homes and multifamily buildings are listed as coming soon. Check the Colorado Energy Office for updates.
Start Here
If your heat pump needs a repair while you weigh your options, call the line and we connect you with an independent local contractor near Parker. Call (303) 647-3227.
Call (303) 647‑3227 →