Xcel Energy Rebates for Heating and Cooling
Xcel Energy's heat pump rebate in Colorado pays by the ton in 2026, up to $1,500 per heating ton for a cold-climate model at the bonus rate. Installs must be finished by Dec. 31, 2026. Checked October 31, 2026.
By the editors of Heating & Cooling the Front Range · Sources checked
Most Front Range houses feel Xcel Energy twice a year: in January, when a cold snap swells the gas bill, and in July, when an air conditioner or a rooftop swamp cooler works through afternoons near 90°F. So when a furnace cracks or a condenser gives out, the utility's rebate list is usually the first piece of paper worth reading.
The short version for 2026: Xcel pays heat pump rebates by the ton, with a higher "bonus" rate for homes moving off gas heat and a lower "standard" rate for everyone else. Swamp coolers, smart thermostats and high-efficiency gas furnaces get flat amounts. There is no rebate row for a stand-alone central air conditioner, and the furnace and boiler rebates disappear on Jan. 1, 2027. Every job has to be installed and invoiced by Dec. 31, 2026.
Everything below comes from Xcel's Colorado heat pump page and the 2026 rebate summary it links, which is marked effective Oct. 1, 2026. We checked both on October 31, 2026. Xcel changes these amounts every year, so confirm the figures with Xcel or your contractor before you sign anything.
Part 1Who qualifies, and who does the work?
The eligibility line is broad. In Xcel's words, "Residential electric and/or natural gas Xcel Energy customers in Colorado are eligible to receive heat pump rebates." If you pay Xcel for either fuel at a house in Denver, Lakewood, Arvada or Boulder, you are in. The swamp cooler rebate is narrower: it goes to Xcel electric customers, which matters if another company supplies your electricity.
The work itself is meant to go through Xcel's Trade Partner Network. Xcel's heat pump page says the installer is a network contractor, with one exception: a mini-split, which some customers may be able to install themselves. The rebate summary flags every measure that needs a participating contractor with a small briefcase icon.
Payment comes one of two ways: the contractor takes the rebate off your invoice, or Xcel mails you a check. Either way, the rebate cannot exceed what the installation cost. If you are still looking for someone to do the work, our guide to choosing a contractor on the Front Range covers licenses, load calculations and written bids.
Part 2How the per-ton heat pump rebates work
Heat pump rebates scale with the size of the equipment, measured differently for each category.
A standard ducted or mixed-ducted air-source heat pump is paid per cooling ton at 95°F: $600 per ton at the bonus rate, $300 at the standard rate. To qualify it needs an efficiency floor of 15.2 SEER2, 7.8 HSPF2 and 11.7 EER2. That is well above the federal minimum for a split heat pump (7.5 HSPF2 and 14.3 SEER2), so a bottom-of-the-range unit will not make the cut.
A cold-climate ducted heat pump is paid per heating ton at 5°F: $1,500 at the bonus rate and $750 at the standard rate. The bar matches the one ENERGY STAR sets for its cold-climate label: the unit must deliver a COP of 1.75 or better at 5°F and keep 70% or more of its 47°F capacity when the outdoor air drops to 5°F. Because the rebate counts tons of heat delivered at 5°F, a unit that holds its output in the cold earns more than one that fades.
The arithmetic is plain. A cold-climate system rated at two heating tons at 5°F would come to $3,000 at the bonus rate, or $1,500 at the standard rate, as long as that is not more than the installed cost.
That cold-weather test fits Denver. The airport's 1991–2020 normals add up to 5,863 heating degree days annually, and the rebate rewards a heat pump sized to carry the house on the coldest mornings. Whether it should replace the furnace or work beside it is its own question, taken up in whether to keep the furnace, switch, or run both.
The less common systems pay more per ton. Ground-source heat pumps earn $2,200 per heating ton at the bonus rate and $1,100 at standard. Air-to-water heat pumps, which suit houses with hot-water radiators, earn $1,900 and $950 per heating ton and must be on Xcel's qualified product list. A heat pump water heater, ENERGY STAR certified with a UEF of at least 3.3, earns a flat $1,500 at the bonus rate or $750 at standard.
Part 3Bonus or standard: the electric-heat catch
The bonus rate is aimed at houses switching off gas. From Nov. 16, 2025, Xcel stopped paying bonus rebates to customers whose main heat is already an electric system, such as baseboard heaters. Those homes still get the standard rate.
For most of the Front Range housing stock this works in the homeowner's favor. A 1950s Aurora ranch with a gas furnace in the basement, or a 1990s Westminster two-story with gas forced air, is the target. A condo heated by electric baseboards is not, and its owner should expect the standard figure.
Ask for the rate in writing on the quote. A bonus figure on a quote for a baseboard-heated house is a mistake, and the gap is big enough to change the decision.
Part 4Mini-splits: whole house or one room?
Ductless mini-splits get two very different treatments. When the equipment heats at least 50% of the home, it earns the same per-ton rates as ducted systems: $600 bonus or $300 standard per cooling ton for an air-source unit, and $1,500 bonus or $750 standard per heating ton for a cold-climate one.
When the mini-split is supplemental, the rebate drops to a flat $500 at the standard rate only. Xcel's examples are garages, additions and single rooms, and the summary describes it as equipment that is not reducing gas use. A single head in the finished attic of a Denver square, with the old boiler still heating the rest of the house, will usually land here.
For brick bungalows and foursquares that never had ducts, the whole-house route avoids tearing into plaster; see ductless heat pumps for older Denver houses.
Part 5Swamp coolers, thermostats and the furnace deadline
Evaporative coolers still earn money. A great many 1960s and 1970s ranches still carry a cooler on the roof, and the Department of Energy says these units use about a quarter of the energy of central air. Xcel's electric customers get $300 for a standard cooler moving at least 2,500 CFM. A premium cooler, one with a purge pump, a thermostat and media rated at 85% saturation, earns $675. Run three or more ducts from a premium unit, at least one of them new, and the figure rises to $1,200. If you are weighing a cooler against a compressor, start with swamp cooler or central air.
There is no row in the 2026 summary for a stand-alone central air conditioner. If the condenser on a 1990s two-story fails this summer, the like-for-like swap carries no Xcel rebate of its own. A heat pump in the same spot cools just the same and does qualify, which is a good reason to ask for a quote on both.
A smart thermostat earns $50 if it is ENERGY STAR rated. Enroll it in Xcel's AC Rewards program and you also get a $100 bill credit for signing up and $25 a year after that. On a chinook day, when the morning is bitter and the afternoon feels like spring, the settings matter as much as the hardware; see thermostats for a place where weather swings.
Gas furnaces are on the way out of the program. A furnace of 95% AFUE or better that replaces a non-condensing furnace earns $225 in 2026. From Jan. 1, 2027, Xcel drops its gas furnace and boiler rebates. Paperwork for a furnace or boiler invoiced in 2026 is accepted through Sept. 30, 2027, but a job that slips into the new year gets nothing.
Part 6Stacking Xcel with state and regional money
Xcel's rebate is one of three sources a Denver-area heat pump job can draw on in 2026.
The second is the state. Under Colorado's heat pump tax credit, a registered contractor claims the credit and passes part of it to you as a discount. On a 2026 air-source install the credit is $1,000, at least $333 must reach the customer, and the invoice line has to read "State of Colorado Heat Pump Discount." You file nothing. The details are in heat pump tax credits, state and federal.
The third is regional. The Denver Regional Council of Governments launched Power Ahead Colorado in July 2026. It pays $1,500 for each cold-climate heat pump carrying the ENERGY STAR label, when one of its verified contractors does the install, and DRCOG says it can be combined with other incentives. Not every Xcel trade partner is a Power Ahead contractor, so ask about both.
What is gone matters too. The federal 25C credit does not apply to equipment placed in service after Dec. 31, 2025, according to the IRS. The state's HEAR rebates for single-family homes closed on Aug. 1, 2026. And the City of Denver offers homeowners no cash heat pump rebate right now; what Denver requires when you replace explains what the city does offer.
Income-qualified customers have a separate track. Xcel says those offers can cover "up to the full cost of a heat pump and its installation," plus free insulation. For everyone else, Xcel's ClearPath on-bill repayment can finance up to $50,000 of eligible upgrades with no upfront payment.
Xcel 2026 heat pump rebates, bonus vs standard
dollars per ton
Part 7What to check on the quote before you sign
A good bid answers these on paper without being asked.
The category and the rate: a standard air-source unit paid per cooling ton, or a cold-climate unit paid per heating ton? Bonus or standard, and why?
The capacity behind the number: the tonnage at 95°F or at 5°F should come from the product's rated data, with model numbers for the outdoor and indoor units.
Who files: is the rebate already deducted, or will you apply and wait for a check? If you apply, the window closes Sept. 30, 2027.
The dates: a December job that slides into the first week of January misses the 2026 program entirely, and for a gas furnace it misses the rebate for good.
The contractor's status: confirm the company is in Xcel's Trade Partner Network and, if you want the regional rebate too, that it is a verified Power Ahead contractor. Keep the final invoice, the model numbers and the rebate paperwork together.
Mini-splits and refrigerant
Xcel's page says some customers may install a mini-split themselves. Connecting and charging the refrigerant lines is a different matter: federal rules require anyone who services refrigerant equipment to hold EPA Section 608 certification. Leave the line set, the refrigerant and the electrical hookup to a certified, licensed installer, and if you are unsure where the line falls, call a licensed pro.
Common questions
Does Xcel give a rebate for a new central air conditioner in 2026?
No stand-alone central air conditioner appears in Xcel's 2026 Colorado rebate summary. A heat pump that also cools does qualify, at $600 per cooling ton at the bonus rate or $300 at standard for a ducted unit that meets the efficiency minimums.
Is there still time to get Xcel's gas furnace rebate?
Only for a furnace installed and invoiced in 2026. The $225 rebate for a 95% AFUE furnace replacing a non-condensing one ends on Jan. 1, 2027, although 2026 jobs can still be submitted until Sept. 30, 2027.
Will a house heated by electric baseboards get the bonus rate?
No. Since Nov. 16, 2025, Xcel has paid only the standard rate when the existing primary heat is electric. The bonus is meant for homes moving off gas.
How does Xcel treat a single mini-split head in a garage or bonus room?
It counts as supplemental use and earns a flat $500 at the standard rate. Only equipment that heats at least 50% of the home earns the per-ton rates.
Can Xcel's rebate be combined with the Colorado heat pump discount?
Yes, the two are separate. Xcel's rebate comes off the invoice or arrives as a check, while the state discount is passed through by a registered contractor. DRCOG says its Power Ahead rebate can be combined with other incentives too.
Sources
- Xcel Energy — Heat pumps, Colorado residential — eligibility, trade partners, payment, Dec. 31, 2026 and Sept. 30, 2027 dates, income-qualified offers, ClearPath financing
- Xcel Energy — Rebate Summary Sheet for Colorado homes, 2026, effective Oct. 1 — per-ton rates, mini-split rules, cooler, thermostat and furnace rebates, electric-heat bonus rule
- ENERGY STAR — Key product criteria for air-source heat pumps — cold-climate COP and 5°F capacity tests
- U.S. Code of Federal Regulations, title 10, section 430.32, via govinfo — federal efficiency floor for split heat pumps
- NOAA NCEI — Local Climatological Data, Denver 2023 — heating degree day normal
- U.S. Department of Energy — Evaporative coolers, archived copy — energy use compared with central air
- Colorado Energy Office — HPTC program page — the 2026 contractor credit and customer discount
- DRCOG — Power Ahead Colorado launches heat pump rebate — $1,500 regional rebate
- IRS — FAQs on changes to 25C and 25D — federal credit end date
- Colorado Energy Office — Home Energy Rebates — HEAR single-family rebates closed
- EPA — Section 608 technician certification — refrigerant certification