Colorado Heat Pump Tax Credit
Beginning January 1, 2024, residents of Colorado became eligible for tax credits to install heat pumps for both space and water heating. For 2026 through 2028 the credit is $1,000 for heat pumps, dropping to $500 in 2029. UniColorado is a registered contractor.
Updated October 13, 2026•By Editorial Staff
Minimum Discounts by System Type
The contractor provides at least these amounts as upfront discounts. Many contractors offer more.
You qualify if
Air-source heat pump
Ground-source heat pump
Water-source heat pump
Combined-source heat pump
Heat pump water heater
VRF heat pump system
Not eligible if
Systems covering less than 80% of heating needs
DIY installations (must use registered contractor)
Equipment Requirements
- System Type
- Air-source heat pump
- Minimum Discount
- $333
- System Type
- Ground, water, or combined-source heat pump
- Minimum Discount
- $667
- System Type
- Heat pump water heater
- Minimum Discount
- $83
How does the Colorado heat pump tax credit work?
Colorado's heat pump tax credit gives all residents an upfront discount when they install a qualifying heat pump through a registered contractor. For 2026, the total credit is $1,000, and it can be claimed once per address, no matter how many heat pump systems are installed. An address that has already used the credit cannot claim it again. There is no income requirement.
It was $1,500 in 2024 and 2025. It is $1,000 for heat pumps installed from 2026 through 2028 and drops to $500 in 2029 (C.R.S. 39-22-554). Heat pump water heaters get $250.
This is a state-level incentive administered by the Colorado Energy Office and Department of Revenue. It is separate from the federal 25C tax credit, which ended December 2025. The Colorado credit continues regardless of federal policy changes.
The contractor receives the full credit from the state and passes a portion to you as an upfront discount on your invoice. The minimum discount varies by system type (see table below). Many contractors, including UniColorado, offer more than the required minimum. This credit stacks with Xcel Energy rebates and Power Ahead Colorado for even greater savings. It also stacked with HEAR, which no longer applies: HEAR closed statewide (Front Range April 28, 2026; rest of the state August 1, 2026).
How do I claim the Colorado heat pump tax credit?
Work With Registered Contractor
UniColorado is a registered contractor
Receive Discount at Install
Credit applied directly to your invoice
Contractor Handles Paperwork
We submit to Department of Revenue
State Reimburses Contractor
You're done - no further action needed
You don't file any paperwork. The contractor manages the entire process from quote to state reimbursement. You receive the discount directly at installation.
Why UniColorado for the Colorado Tax Credit
UniColorado is a registered contractor with the Colorado Department of Revenue for the heat pump tax credit program. We pass the full $1,000discount to our customers on every qualifying installation. Some contractors retain a larger portion of the credit. We don't.
We handle the entire process: Manual J load calculation to confirm your system covers 80%+ of annual heating needs (the threshold for eligibility), equipment selection from Mitsubishi, Bosch, or Carrier, permitting, installation, and all Department of Revenue paperwork. Your discount appears on your invoice at installation. You don't file anything.
The state credit stacks with Xcel Energy rebates, Power Ahead Colorado ($1,500, no income limit). It also stacked with HEAR until HEAR closed statewide on August 1, 2026. We apply all qualifying programs as upfront discounts on one invoice. See our full rebate guide for all available incentives.
Get the Full Colorado Tax Credit on Your Install
Registered contractor. Full discount passed to you. We handle the state paperwork.
Stack With Other Programs
Up to $1,500/ton for cold-climate heat pumps. Stacks directly with the state credit.
$1,500 heat pump rebate. No income limit. Stacks with the state credit. The fallback for Front Range customers post-HEAR.
Up to $8,000 for income-qualified households (under 150% AMI). Closed statewide: Front Range funds ran out April 28, 2026, and the rest of the state closed August 1, 2026.
See every active program and what you can stack for maximum savings.
The federal credit ended December 2025. Colorado programs remain active.
Stack With Other Programs
Combine the Colorado tax credit with utility rebates and federal programs for maximum savings.
RebateStacking
Stack Your Savings
The Colorado state credit stacks with utility rebates and Power Ahead Colorado. HEAR is closed statewide (Front Range April 28, 2026; rest of the state August 1, 2026).
Xcel Customer, Outside Denver Metro
Xcel gas customers outside the DRCOG region. No income limit.
Up to Total Savings
$5,500
Xcel Customer, Denver Metro
Xcel gas customers in the DRCOG region. No income limit.
Up to Total Savings
$7,000
Any Income, Non-Xcel
Colorado residents without Xcel service.
Up to Total Savings
$1,000
Based on cold climate heat pumps (ccASHP/ccMSHP) at $1,500/heating ton for Xcel gas customers. Power Ahead Colorado applies in the DRCOG region only.
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