A new heat pump costs less than most Northern Colorado homeowners expect once rebates are factored in. If your home gets natural gas from Xcel Energy, a cold-climate heat pump can qualify for up to $1,500 per heating ton under Xcel’s current program. A system rated at 3 heating tons works out to $4,500 from Xcel alone, before the Colorado heat pump tax credit.
IMS Heating & Air has kept Berthoud and the surrounding communities comfortable since 1999. As a Carrier Factory Authorized Dealer, we size and select equipment to reach the highest rebate tier your home qualifies for, then walk you through every rebate on your project before you sign.
Xcel Energy Heat Pump Rebates
Who qualifies
The full Xcel rebate goes to homes that buy natural gas from Xcel Energy, whether you have gas service only or both gas and electric. In Berthoud, Loveland and Longmont, many homes buy gas from Xcel even when a city utility supplies the electricity, so a lot of local households qualify for the top amount.
- Xcel gas customers (gas only, or gas and electric): eligible for the full current rebate, including Xcel’s bonus.
- Xcel electric customers without Xcel gas: eligible for the standard rebate, without the bonus.
- Homes that already heat with electricity (baseboard or an existing heat pump): eligible for the standard rebate only.
- Home type: single-family homes, duplexes and small multifamily buildings.
Current rebate amounts
These amounts took effect October 1, 2026.
| Equipment | How Xcel measures it | Xcel gas customers | Xcel electric-only customers |
| Cold-climate ducted heat pump | Per heating ton at 5°F | $1,500 | $750 |
| Cold-climate ductless mini-split | Per heating ton at 5°F | $1,500 | $750 |
| Standard ducted heat pump | Per cooling ton at 95°F | $600 | $300 |
| Standard ductless mini-split | Per cooling ton at 95°F | $600 | $300 |
| ENERGY STAR heat pump water heater | Flat amount | $1,500 | $750 |
Xcel sets these amounts and can change them. We confirm the current amount for your project on your written estimate before you sign.
Why cold-climate equipment earns a bigger rebate
Xcel rates the two types of heat pumps at very different temperatures. A standard heat pump is rated by its cooling output on a 95°F summer day. A cold-climate heat pump is rated by how much heat it still delivers at 5°F, the kind of night Northern Colorado sees every winter.
Xcel pays more per ton for that cold-weather capacity, and it pays on a different scale. A cold-climate system that holds 4 tons of heating at 5°F can earn up to $6,000. A standard 4-ton system earns up to $2,400. On most projects, equipment choice moves the rebate more than anything else, which is why we check each model’s published 5°F rating before we quote.
How you receive the rebate
Your written estimate shows each rebate your project qualifies for, the amount you can expect, and how it will be applied. We’ll go over it with you before you sign, so there are no surprises.
Rebate amounts change by program cycle
Xcel funds its rebates from a fixed budget and adjusts amounts in cycles, sometimes with little notice. The amounts above reflect Xcel’s current cycle, which began October 1, 2026. Treat any figure online, including this page, as a starting point, and confirm current amounts before signing. We’ll put yours in writing.
Stack Xcel Rebates With the Colorado Heat Pump Tax Credit
The Xcel rebate is usually the biggest piece, but you can combine it with Colorado’s state heat pump tax credit.
Colorado Heat Pump Tax Credit
Colorado offers a state tax credit on heat pumps installed by a state-registered contractor, and it’s open to every Colorado resident regardless of utility. For 2026 installations, the credit is $1,000 for an air-source heat pump and $250 for a heat pump water heater. The registered contractor claims the credit and must pass at least one-third of it to you as an upfront discount: at least $333 on an air-source system and $83 on a water heater.
The credit stepped down from its 2024 and 2025 levels and is scheduled to step down again in 2029. To qualify, the heat pump generally needs to serve as your home’s primary heat source.
What a stacked project can look like
For an Xcel gas customer in Berthoud installing a cold-climate system rated at 3 heating tons at 5°F, current incentives add up to about $4,833: $4,500 from Xcel plus at least $333 from the state credit. Your exact total depends on the equipment, your utility and current program funding.
Financing the Rest of Your Project
Rebates and the state tax credit reduce your cost, and financing can help with the rest. IMS works with trusted lenders, including Wells Fargo and Synchrony, to offer flexible payment plans on qualifying HVAC equipment with approved credit. During your free estimate, we’ll show your price after rebates and walk you through the financing options that fit your budget.
How the Rebate Process Works
- Get a free estimate. We confirm your gas and electric utility, recommend equipment that qualifies, and list every rebate and credit on your written estimate.
- Review your savings. Before you sign, we go over each rebate, the expected amount, and how it will be applied to your project.
- Get help with the paperwork. We take care of the documentation our side requires and tell you if a program needs anything from you, like a signature.
- The rebates are processed. Each program reviews and pays out under its own terms, and we’ll tell you what to expect along the way.
Rebate Eligibility at a Glance
| Program | Who Qualifies | Rebate Amount | Notes |
| Xcel Energy Heat Pump Rebate | Xcel gas customers (gas only, or gas and electric); electric-only customers get the standard amount | Up to $1,500 per heating ton (cold-climate), $600 per cooling ton (standard), $1,500 heat pump water heater | Current cycle since October 1, 2026; amounts can change |
| Colorado Heat Pump Tax Credit | All Colorado residents, installed by a state-registered contractor | $1,000 credit (air-source) or $250 (water heater); at least $333 or $83 off your invoice | 2026 amounts; scheduled to step down again in 2029 |
FAQ
My city provides my electricity. Can I still get the Xcel rebate?
Yes, if your home buys natural gas from Xcel Energy. The full rebate is tied to your Xcel gas service, not your electric provider. We’ll confirm your utilities during your estimate.
Do I need to be an Xcel customer to save on a heat pump?
Only for the Xcel rebate. The Colorado heat pump tax credit is open to any Colorado resident who installs a qualifying system through a state-registered contractor.
Are there rebates for a new furnace or air conditioner?
The largest incentives in Colorado right now go to heat pumps and heat pump water heaters. If you’re planning a furnace or AC replacement, ask us to price a heat pump option alongside it so you can compare the cost after rebates.
Is the federal heat pump tax credit still available?
No. The federal credit ended for equipment installed after December 31, 2025. State and utility incentives are still available.
Will my rebate amount change before my install?
It can. Xcel adjusts amounts by program cycle, sometimes with little notice. We list the current amount on your written estimate and confirm it before you sign, so you know what to expect.
Find Out What Your Home Qualifies For
Book a free estimate and we’ll check your utilities, size the right system for your home, and show every rebate and credit on your written quote. IMS serves Berthoud, Loveland, Longmont, Johnstown, Mead and nearby Northern Colorado communities.
