Can I claim the federal tax credit AND state rebates?

Yes. The federal §25C tax credit is independent of state and utility rebates and stacks on top. Note: state and utility rebates may reduce the project cost basis used to calculate the 30% federal credit.

Do I have to itemize my taxes to get the $2,000 credit?

No. The Energy Efficient Home Improvement Credit (§25C) is a non-refundable tax credit claimed on Form 5695 — works whether you itemize or take the standard deduction. You do need sufficient federal tax liability to use it.

When do I receive the rebate money?

Utility rebates are typically mailed as a check 6–10 weeks after install, after submitting your invoice. The federal tax credit is claimed on the tax year you installed the system. HEEHRA rebates are point-of-sale (instant) where active.

Are these rebates going away?

Federal §25C is locked in through 2032. HEEHRA funding is finite per state — once a state exhausts its allocation, the program closes. We update this page monthly with current funding status.

Colorado Heat Pump Rebates (2026) — Federal + State Stack

What's available in Colorado

Colorado stacks utility rebates (Xcel) on top of a statewide income tax credit. Cold-climate certification is required for the maximum Xcel tier.

Federal §25C tax credit

$2,000

30% of project, capped

Federal HEEHRA rebate

$8,000

Income-qualified only (≤80% AMI)

Colorado non-income-qualified

$5,000

2 programs

Colorado income-qualified

$8,000

1 programs

Federal incentives

§25C tax credit: 30% of project cost up to $2,000, claimed via IRS Form 5695 for the tax year the system was installed. Locked in through 2032 by the Inflation Reduction Act.

HEEHRA rebate: Point-of-sale rebate up to $8,000 for households at or below 80% of area median income. Funded by the IRA, administered by each state. Colorado is currently accepting applications.

Colorado rebate programs

Xcel Energy Heat Pump Rebate

$3,500

rebate

Tiered by HSPF2 rating; max $3,500 for cold-climate-certified systems.

Source: xcelenergy.com

Colorado Heat Pump Tax Credit

$1,500

tax credit

Statewide income tax credit, stackable with federal §25C.

Source: energyoffice.colorado.gov

CO HEEHRA (income-qualified)

$8,000

rebateIncome-qualified ≤80% AMI

Administered by Colorado Energy Office. Combined cap with state tax credit.

Source: energyoffice.colorado.gov

6 utility-specific programs not shown here. Enter your ZIP in the calculator to filter to just your utility.

Estimate your net cost

Your state

System type

Household income

Used to determine HEEHRA eligibility (under 80% area median income).

Average installed cost

$12,500

Incentives offset 43% of the install−$5,400

Federal §25C tax credit−$2,000
Oncor Take A Look program−$1,200
CenterPoint Energy SCORE−$800
Austin Energy Heat Pump Rebate−$1,400

Estimated out-of-pocket$7,100

Estimate only. Tax credits require sufficient federal tax liability. Rebate stacking rules vary — confirm with your installer and utility before signing.

How to claim each rebate

Get pre-approved (where required). Some utility programs require approval before install. Check program details before signing a contract.
Use a participating contractor. Many programs require a licensed installer from an approved contractor list.
Save documentation. AHRI certificate, model numbers, and itemized invoice are required for most utility rebates and the federal §25C credit.
Submit utility rebate within 60–90 days of install. Some programs are first-come first-served and close mid-year.
Claim federal credit at tax time using Form 5695 for the year you placed the system in service.

FAQ

Most Colorado households can stack the federal $2,000 tax credit with up to $5,000 in state and utility rebates. Income-qualified households (under 80% AMI) may also access the $8,000 HEEHRA rebate plus an additional $8,000 in income-qualified state programs.

Cost guides for Colorado cities

Denver, CO