Rebates and tax credits
HVAC rebates and tax credits in Colorado for 2026
What Colorado homeowners can still get on a new furnace, air conditioner, heat pump or swamp cooler, and what went away at the start of 2026.
Last checked October 28, 2026. Rebate programs change during the year, and funding is often first come, first served. Every figure below links to its source. This page covers the programs available in Colorado in general. When we write your estimate, we will tell you which rebates apply to the work we do, and Shannon handles the Xcel and Power Ahead applications for our customers.
What changed for 2026
- The federal tax credits ended. The 25C credit for heat pumps, central air, furnaces, boilers and water heaters, and the 25D credit that covered geothermal heat pumps, do not apply to equipment placed in service after December 31, 2025 (IRS).
- Xcel Energy stopped rebating gas furnaces and boilers for installs from January 1, 2026, according to Xcel’s 2025–2026 rebate summary. Its rebates now go mainly to heat pumps.
- The Colorado heat pump tax credit got smaller and now comes off the invoice through a state-registered contractor instead of on your tax return.
- The state’s HEAR rebates for single-family homes closed on August 1, 2026 (Colorado Energy Office).
- A new regional rebate opened: Power Ahead Colorado pays $1,500 toward a cold-climate heat pump in the Denver metro.
Xcel Energy rebates
These come from Xcel’s Colorado 2025–2026 Rebate Summary (form 25-10-417, effective November 16, 2025). They are for single-family homes, duplexes and fourplexes with Xcel electric or gas service, and funding is limited.
| Equipment | Xcel rebate |
|---|---|
| Air-source, cold-climate and ground-source heat pumps; heat pump water heaters | Paid per ton, with a larger bonus for homes heated with gas. Xcel changed these amounts on October 1, 2026, so we confirm the current figure on your estimate. |
| Evaporative (swamp) cooler, standard | $300 |
| Evaporative cooler, premium | $675 |
| Evaporative cooler, multi-ducted premium | $1,200 |
| Smart thermostat that works with AC Rewards | $50, plus a $100 credit for enrolling in AC Rewards and $25 a year after that |
| Attic insulation, wall insulation, air sealing | 30% of the cost, up to $500, $350 and $400 |
| High-efficiency gas furnace or boiler | None for 2026 installs |
| Central air conditioner | Not on the 2025–2026 summary |
Xcel also runs Home Energy Squad visits. The standard visit is free for a limited time and can include a smart thermostat if you have central air and join AC Rewards. Income-qualified customers get every visit free.
Colorado heat pump tax credit
For systems installed on or after January 1, 2026, a Colorado-registered contractor claims the credit and must give you at least the discount below, shown on the invoice as the “State of Colorado Heat Pump Discount.” The equipment has to be ENERGY STAR certified and sized for at least 80% of the home’s yearly heating load (Colorado Energy Office).
Aspen Creek does not take part in this state program, so this discount is not part of our estimates or invoices. The Xcel and Power Ahead rebates on this page are, and we apply for those for you.
| Equipment | Contractor’s credit | Your minimum discount |
|---|---|---|
| Air-source heat pump | $1,000 | $333 |
| Ground-, water- or combined-source heat pump | $2,000 | $667 |
| Heat pump water heater | $250 | $83 |
Power Ahead Colorado: $1,500 off a cold-climate heat pump
Power Ahead Colorado, run by the Denver Regional Council of Governments, pays $1,500 per qualifying cold-climate air-source heat pump system in existing homes, with no income limit. Ducted, ductless and dual-fuel systems all qualify. Lafayette and Boulder County are both DRCOG members. A participating contractor has to get pre-approval before the work starts. We offer Power Ahead on qualifying installs, and Shannon takes care of the pre-approval and the application. It can be combined with utility, city and state incentives, but not with the federally funded HEAR or HER rebates.
Help for income-qualified households
- Boulder County EnergySmart income-qualified rebates cover 50% of a project, up to $2,000 a year, for households at or below 100% of area median income.
- The Weatherization Assistance Program and CARE offer free efficiency upgrades for qualifying households.
- Xcel’s income-qualified Home Energy Squad visits are free, and upgrade costs may be partly or fully covered.
What this means if your furnace dies this winter
You have two honest paths. A like-for-like gas furnace replacement is still allowed everywhere we work and is usually the simplest, but it no longer earns an Xcel or federal rebate. A heat pump, on its own or paired with a gas furnace as backup, can qualify for Xcel’s heat pump rebate and Power Ahead’s $1,500 when we install it, and Shannon applies for both for you. We will price both paths so you can compare the real numbers. Read repair or replace? first, and see our heat pump and furnace pages.
Sources
- IRS: FAQs on the 2025 changes to 25C and 25D
- IRS: Energy Efficient Home Improvement Credit
- Xcel Energy: Colorado 2025–2026 Rebate Summary (form 25-10-417)
- Xcel Energy Home Energy Squad
- Colorado Energy Office: heat pump tax credit
- Colorado Energy Office: home energy rebates
- Power Ahead Colorado: program requirements
- DRCOG: Power Ahead launch (July 2026)
- Boulder County EnergySmart rebates
- Colorado PUC: Clean Heat Plan fact sheet
Rebate questions we hear a lot
Is there still a federal tax credit for a new furnace, AC or heat pump?
No. The federal Energy Efficient Home Improvement Credit (25C) and the Residential Clean Energy Credit (25D) ended for equipment placed in service after December 31, 2025, under the 2025 federal tax law.
Does Xcel Energy still give a rebate for a high-efficiency gas furnace?
Not for 2026 installs. Xcel’s 2025–2026 rebate summary says gas furnace and boiler rebates were removed effective January 1, 2026. Xcel’s rebates now focus on heat pumps.
How does the Colorado heat pump tax credit work now?
For systems installed in 2026, a Colorado-registered contractor claims the credit and must pass at least about a third of it to you as a discount on the invoice: at least $333 on an air-source heat pump, $667 on a ground-source system and $83 on a heat pump water heater. Aspen Creek does not take part in this state program, so the discount is not included on our invoices; the Xcel and Power Ahead rebates are.
Can I combine rebates?
Often. Power Ahead Colorado can be combined with utility, city and state incentives, but not with the federally funded HEAR or HER rebates. Xcel funding is first-come, first-served. When we install the system, Shannon applies for the Xcel and Power Ahead rebates that fit your job.
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