Xcel Energy Heat Pump Rebate
In Colorado, the Xcel Energy heat pump rebate pays no more than $2,200/heating ton, and income-qualified homes can get up to the full cost covered. Qualifying cold-climate units in Minnesota can earn up to $2,000 through this program.
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Who sends your electric bill?
What are you putting in?
- Rebate for a heat pump (any income)
- Up to $2,000 For Combo and Natural Gas Only customers
- Water heater (heat pump)
- $1,500
- Federal 25C tax credit
- Ended No credit for heat pumps installed after 31 December 2025
Apply and check the current rules on the official page: Xcel Energy Colorado Heat Pump Rebates
Xcel Energy Heat Pump Rebate Amounts by State
Your state, the heating fuel you use now, and the heat pump type you install all affect the rebate amount.
| What you install | Rebate | Who | Conditions | State |
|---|---|---|---|---|
| Ducted or mixed ducted Cold Climate Air Source Heat Pump (ccASHP), with the standard rebate plus bonus | $1,500/heating ton at 5 F | Any income | The bonus goes to homes that do not heat with existing electric heat (Xcel gas heat, for example). Required specs: 15.2 SEER2, 10 EER2, 8.1 HSPF2, COP >= 1.75 at 5 F; use a Trade Partner Network contractor; invoice dated 2026 | Colorado |
| Ducted Cold Climate ASHP with the standard rebate, for homes with existing electric heat | $750/heating ton at 5 F | Any income | If your home already heats with electricity (e.g., baseboard), you receive the standard rebate with no bonus | Colorado |
| Ducted or mixed ducted Air Source Heat Pump (ASHP), with the standard rebate plus bonus | $600/cooling ton at 95 F | Any income | 15.2 SEER2, 11.7 EER2, 7.8 HSPF2; standard rebate alone $300/cooling ton | Colorado |
| Non-ducted Cold Climate ASHP that heats at least 50% of the home, with the standard rebate plus bonus | $1,500/heating ton at 5 F | Any income | 16 SEER2, 9 EER2, 9.5 HSPF2; the contractor must attest that the unit is sized so it can heat at least 50% of the home; on its own the standard rebate is $750/heating ton | Colorado |
| Supplemental non-ducted ASHP/ccASHP (garage, addition, single room) | $500 | Any income | Self-install allowed; no bonus | Colorado |
| Ground Source Heat Pump (GSHP), with the standard rebate plus bonus | $2,200/heating ton | Any income | 16 EER2, 3.3 COP, and a closed ground loop are required; the standard rebate alone is $1,100/heating ton | Colorado |
| Heat Pump Water Heater - standard plus bonus | $1,500 | Any income | ENERGY STAR, 3.3 UEF; the standard rebate alone is $750; self-install or any contractor is fine | Colorado |
| Income-qualified heat pump rebates | Pays up to the full amount for a heat pump and installing it | Income-qualified | Check that you qualify through the Income Qualified Home Energy Squad (Plus visit); the test uses Area Median Income | Colorado |
| Cold climate air source heat pump (ccASHP) | Combo or Natural Gas Only customers get $2,000; Electric Only customers get $1,500 | Any income | 15.2 SEER2, 10.0 EER2, 8.1 HSPF2, COP at 5F >= 1.75, on ashp.neep.org; Quality Installation | Minnesota |
| Air source heat pump (ASHP) | Combo or Natural Gas Only customers get $1,600; Electric Only customers get $1,100 | Any income | 15.2 SEER2, 9.6 EER2, 7.8 HSPF2 with Quality Installation | Minnesota |
| Cold climate mini-split heat pump (ccMSHP) | $2,000 | Any income | 9.0 EER2, 16.0 SEER2, 9.5 HSPF2, cold-climate COP rule; one payment per condensing (outdoor) unit; DIY install allowed | Minnesota |
| Mini-split heat pump (MSHP) | $1,600 | Any income | 15.2 SEER2, 9.3 EER2, 8.5 HSPF2; must be used for heating and cooling | Minnesota |
| Ground source heat pump (GSHP) with Quality Installation | $500 per heating ton | Any income | 16 EER2 and 3.3 COP | Minnesota |
| Electric heat pump water heater | $400, or $500 if you are eligible to enroll in Demand Management | Any income | ENERGY STAR rated or AHRI listed | Minnesota |
In Colorado and Minnesota alike, the top rebate tiers go to customers who switch away from natural gas heat.
Eligibility for Heat Pump Rebates in Colorado and Minnesota
Colorado residents need an active residential account, electric or natural gas, with the utility to qualify for Xcel Energy rebates Colorado. Colorado gas-only customers are not eligible when a different electric provider supplies their existing electric heating. Colorado homes heated by electric baseboard get the standard rate alone, since the electric-heat bonus ended Nov. 16, 2025. Once they complete a free Home Energy Squad Plus visit, income-qualified Colorado homes can have up to the full cost paid.
Xcel Energy Minnesota rebates require that you have residential electric service through the utility and buy new equipment. If you install a ductless unit in Minnesota, it must serve both heating and cooling, and backup heat is needed. In either state, the invoice's total installation cost caps your final rebate payment.
Claim Your Rebate: The Steps in Order
Take these steps in the order shown, so you do not miss your Xcel Energy rebate payment:
- Check first that your account qualifies, then book a visit from Home Energy Squad if income-qualified pricing is what you want.
- For whole-home systems, hire a Trade Partner Network contractor; for eligible ductless units and water heaters, you may self-install.
- Finish your installation and receive an invoice dated by Dec. 31, 2026, that shows the rebates you qualify for.
- Have your contractor file the rebate form so you get an upfront discount or a check, or file it yourself online.
Every application has to reach them by Sept. 30, 2027; Minnesota rebate payments can take as long as eight weeks.
Rules for Contractors and Equipment
A heating ton is a standard measure of the heat a unit produces, and most rebates are paid by that measure. A ductless heat pump whose outdoor unit links to one or more indoor wall units is called a mini-split.
A Trade Partner Network contractor must handle installation in Colorado for ducted systems, ground source units, air-to-water models, or a mini-split used for primary heating. Your contractor must verify, for a Colorado primary ductless unit, that it heats at least 50% of the home. You may install your own water heater in Colorado if it holds up to 80 gallons. A self-installed supplemental mini-split earns a $500 rebate.
Ducted systems in Minnesota need a participating contractor, but mini-splits can be self-installed and are paid once per outdoor unit. Both states require cold-climate models to keep at least 70% of rated heating capacity at 5 F. Confirm your model is eligible through the Xcel Energy qualifying equipment list before any work on the installation begins.
Insulation Bonuses, Financing, and Deadlines
Extra savings and financing can be paired with your heat pump, as long as installation happens before the Dec. 31, 2026 deadline:
- Insulation bonus: Complete qualifying insulation and air sealing in the two years before your heat pump, and both states add $600.
- Colorado extras: The Colorado rules offer a 25% three-measure bonus, financing through ClearPath up to $50,000, and an infrared audit covered up to $200.
- Local and water perks in Colorado: Water heater programs add $100, plus another $25 each year; seven mountain towns also get extra rebates for switching from gas.
- Extras in Minnesota: Homeowners can also get free income-qualified visits, a reduced electric heating rate, and as much as $1,500 toward a panel upgrade.
Colorado rebates for gas furnaces and boilers end Jan. 1, 2027; your rebate application is due by Sept. 30, 2027.
Xcel Energy Heat Pump Rebates: Common Questions
Do heat pumps qualify for any federal tax credit in 2026?
The answer is no: heat pumps placed in service later than December 31, 2025 get no federal 25C tax credit. Congress cut the credit short on July 4, 2025, under Public Law 119-21, as IRS fact sheet FS-2025-05 confirms. There are no state HEAR rebates either, since Save Energy Minnesota has not launched and Colorado closed its single-family funding on August 1, 2026.
In Colorado, what special rules cover the Xcel heat pump rebate?
Colorado payment tiers are set by Form 26-09-809, in effect from Oct. 1, 2026, which puts a heat pump water heater at $1,500. The utility's water heater web page, for its part, still promotes a rebate of up to $2,250 that comes with a limited-time bonus. In Breckenridge, Dillon, Frisco, Grand Lake, Leadville, Silverthorne, and Red Cliff, gas customers also receive Mountain Energy Project rebates.
How will Xcel Energy calculate my rebate based on my home size?
Square footage is not how Xcel Energy sets rebates, and no fixed installation prices are published by the program. Instead, Colorado figures payment by heating ton for cold-climate units (measured at 5 F), or by cooling ton at 95 F. For air-source models, Minnesota pays flat amounts ranging from $1,100 up to $2,000; ground-source units receive $500 per heating ton.
Compare Local Installer Quotes With Your Xcel Energy Rebate
Most rebates on this page are paid through the installer or need the installer's paperwork, so the quote is where the money is settled. Tell us the ZIP code and what you want installed, and installers who work with these programs send a written price with the rebates taken off.
Related pages
Every heat pump rebate in Colorado
Utility and state programs in Colorado besides this one, shown side by side.
Every heat pump rebate in Minnesota
Minnesota's other utility and state programs, side by side.
Heat pump cost after rebates
Typical installed prices after the largest rebate is subtracted.