Rebates are pushing some Coloradans to switch to heat pumps
As temperatures rise and energy efficiency becomes more essential, new incentives are giving Coloradans a nudge toward cleaner and cooler homes.
In a push to cut carbon emissions, Xcel Energy has increased its 2025 rebate program for homeowners. The changes are part of the Clean Heat Plan, which encourages the adoption of electric heat pump systems over traditional HVAC units.
"Most of the systems we're replacing are 15 to 20 years old, using outdated refrigerants that have been banned by the EPA," said Terry Hartzell, owner of Hartzell Heating and Air Conditioning. "We're upgrading people to smaller, more eco-friendly systems that are dramatically more efficient."
At first glance, it might seem counterintuitive for a utility company to encourage customers to reduce energy consumption. But Xcel has a financial incentive, too. The Colorado Public Utilities Commission reimburses the company for lost revenue, but only if Xcel meets state-mandated energy savings goals.
Under the rebate structure, qualified homeowners can receive $2,250 per ton of cooling capacity if they install a cold-climate air-source heat pump. To qualify, systems must meet strict guidelines, including proper installation, commissioning, and verified energy efficiency ratings.
"These new systems are removing heat from the air twice as fast as the old ones, and they're whisper quiet," Hartzell said. "They're inverter-driven, so they don't run full blast all the time. They adjust as needed, which saves a ton on your electricity bill."
Greg Hightshoe recently took advantage of the rebate after his two-decade-old HVAC system finally gave out.
"We moved in 12 years ago, and the system was already 10 years old," Hightshoe said. "It started giving out a couple of weeks ago. We were opening windows and running fans just to get through the afternoons."
He called around for quotes and learned about heat pumps.
"I had no idea about the rebate program until Hartzell told me," Hightshoe said. "The final price came in less than a lot of the mid-range replacements I was considering."
A heat pump is a dual-function system that provides both cooling in the summer and heating in the winter. Many homeowners opt for hybrid systems that include a traditional gas furnace as a backup for Colorado's colder months.
According to Hartzell, heat pumps are becoming the majority of his business, making up about 80% of new installs.
"They've been around for decades, but only in the last few years have we really seen them take off in Colorado," he said. "The only real downside right now is wait time. We're booked two to three weeks out."
Interested homeowners can learn more about eligibility and rebates by visiting Xcel Energy's rebate portal.
